(Yicai Global) April 12 -- The commerce bureau in the eastern Chinese city of Wuxi has called in three meal delivery platforms, Didi Waimai, Meituan Waimai and Ele.me, for an emergency meeting as it looks to end a citywide price war that has seen pieces of fried chicken sell for just CNY0.01.
The assembly concerned extreme marketing campaigns by the three providers, which have escalated since Didi Waimai, run by the world’s largest ride-hailing operator Didi Chuxing Technology Co., entered the local market, an unidentified source told Yicai Global. The newcomer rolled out services and accompanied them with a CNY20 (USD3.2) discount on users’ first orders and CNY18 coupons for any order over CNY20.
Meituan Waimai, run by China’s biggest on-demand services provider Meituan Dianping, struck back by offering CNY15 coupon for orders over the same value, a stark contrast to other regions where meal deliveries have thinned out. Ele.me, which is run by Shanghai Lazhisi Information Technology Co. and is in the midst of being taken over by China’s largest e-commerce firm Alibaba Group Holding Ltd., also began offering discounts on April 9.
Didi Waimai, which formed after Meituan announced plans to compete with Didi Chuxing in passenger transport, claimed on April 10 that it received 334,000 orders the day prior, and was the city’s biggest takeaway platform by market share. However, Meituan alleges Didi allowed merchants and deliverymen to farm clicks (pay for people to use their services) during trial operations and deliberately slacked off in terms of supervision to boost sales data.
Can’t Stand the Heat
The promotions have led to a rapid rise in order numbers, and consumers aren’t happy with how the platforms are handling them. Many have complained about late deliveries, insufficient portion sizes and poor quality of food.
The commerce bureau used the meeting to advise providers’ to step up their game and ixnay the intense marketing campaigns as they battle for market share, which representatives from the firms agreed to do.
It also discussed reports that merchants who had opted to work with Didi Waimai had seen their online restaurants shut down by Meituan and Ele.me, forcing them to pick between the three.
Copy-edited by James Boynton