Ele.me – China’s top meal delivery startup

There are a number of online food ordering services in China, but only one stands out for focusing on delivering food to students living on campus. That’s Ele.me – which is Chinese for “Are you hungry?”

Its considered as China’s biggest meal delivery startup. It currently has listings for 50,000 restaurants in 30 Chinese cities, with a strong focus on food outlets around universities and colleges. The startup is getting 100,000 orders per day at the moment.

But what makes Ele.me unique is also a big problem: students don’t have much money to spend. According to the startup, the average food order via the service is a mere RMB 30 – that’s US$4.80. In contrast, China-based Sherpa’s, which focuses on middle-income families and expats in three Chinese cities, has a minimum order of RMB 100 ($16) in the evenings – or double that if it’s raining.

Ele.me makes money from a cut of each order taken from the restaurant (so it’s free for users), as is the case with most other online services. But that means it’s only getting a small cut of a small order each time. Despite these issues, Ele.me has previously raised $25 million from major investors such as Matrix Partners and Sequoia Capital.

The blockbuster investment was led by CITIC Capital and supermarket chain Hualian, reports the Tencent Tech blog. Previous investors Tencent, JD, and Sequoia Capital also threw in some of the cash.

The extra money allows Ele.me – whose blue-uniformed deliverymen on their electric scooters are fast becoming a fixture of major Chinese cities – to keep up the pace as web giants Alibaba and Baidu seek to catch up to local, on-demand web services such as meal delivery. Ele.me, which started up in 2009 in Shanghai, has now raised a total of US$1.09 billion in VC funding, making it China’s third most-funded startup.

Hualian contributed US$90 million of the funding and will form a partnership with Ele.me based around deliveries from its supermarkets across the country, including its higher-end BHG Market Place stores – but it’s not yet clear if that involves just hot meals sold at some of the stores or products from off the shelf.

40 million users

Ele.me now employs 10,000 people – mainly the bikers that do the deliveries from partner restaurants. The service now covers 260 Chinese cities, 300,000 restaurants, and a claimed 40 million users who spend an average of RMB 60 million (US$9.4 million) each day. 98 percent of its turnover is from its mobile apps.

Alibaba last month put an on-demand services marketplace inside its popular mobile wallet app Alipay, a move which came hot on the heels of the ecommerce titan throwing US$1 billion to battle fast-growing startups doing things like home manicures, cleaning, and car maintenance.

Homegrown search engine Baidu is also fighting for this space with its Baidu Takeout Delivery service.


Ref: Tech in Asia

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