(Yicai Global) April 15 -- Meituan Dianping will open another fresh grocery delivery outlet in China's eastern hub of Shanghai as part of the lifestyle platform's efforts to rival Alibaba Group Holding's Hema Fresh in the fast-growing high-sector.
Beijing-based Meituan will this week open the 10th location for the service which operates in the capital and Shanghai, Tencent's QQ Finance media outlet reported.
Established in January, the platform named Maicai, meaning "buy vegetables" in English, delivers all kinds of premium-end groceries to surrounding communities where demand is growing. Users in the two first-tier cities have been able to order products on the Meituan Maicai app since January with free 30-minute delivery within two kilometers of the locations.
China's affluent consumers are increasingly rejecting traditional product channels such as local markets and turning to online platforms to fulfill their needs for quality products. Some 81 percent of China's middle-class families singled out quality as the key factor in purchasing decisions when it comes to food, according to a 2017 report from Chinese think tank Pintu360. This marked the first time that consumers in the country had held quality in higher regard than price.
Alibaba's Hema Fresh has already gained a strong foothold in the sector with 64 stores covering 14 Chinese cities as of last July. The Hangzhou-based tech giant set out a goal of opening 100 in total by the end of the year.
Meituan's foray into the so-called new retail sector involves a self-operated model and strict controls on the quality of foods and delivery. The model is different from its meal delivery service Meituan Waimai, which acts as a third-party courier service for restaurants and shops.
Editor: William Clegg