The war that has been raging in the China ride share market is being taken to a new front; food delivery, as the tit for tat between arch rivals Didi Chuxing and Meituan sees the two continue to encroach upon each other .
Earlier in the month, The Nanjinger covered a story regarding the displacement of 3,000 public taxis in Nanjing; the unused vehicles considered to be a direct result of private car hailing companies, as well as an example of how one piece of technology has caused such a drastic ripple of discontent in such an old business.
The Nanjing lifestyle APP Meituan, which, prior to this year, offered services that include the buying of discounted tickets, bookings, and food delivery, recently upped its game and decided to go head-on with China’s answer to Uber, Didi Chuxing, by offering its own car hailing service. Meituan offered incredibly low discounts to newcomers, even going so far as giving rides away for free.
Didi then followed suit and lowered its prices as a means of luring its customer base back, and has now decided to take it one step further and open a food delivery service of its own, operating in Wuxi, Eastern China. The Nanjinger has discovered the company has since expanded the service to Nanjing, Changsha and Fuzhou.
As the scenario plays out as something more akin to an intense tantrum thrown by two children, the Xinhua Silk Road Information Service addresses the situation, reporting, “The companies said they would stop inappropriate acts and cooperate with the government to restore market order”.
For indications as to where this all may be leading, one can look to comparisons in Hong Kong. “Delivery APPs aren’t popular [here]; the average wage in Hong Kong is about $9,000. The cost on delivery would be too high, as they would need to pay the drivers well”, a local Hong Kong businesswoman told The Nanjinger. So if this is true for Hong Kong, then how is it that delivery APPs on the mainland are able to keep the costs so low? How much can the delivery men earn in Wuxi, for example?
According to TechNode, who say they “played around with the hiring page” when Didi was looking for delivery men in for Wuxi, Didi offered “full-time delivery riders, to work at least 48 hours a wee, a minimum monthly salary of ¥10,000 (roughly $1,576)”. Other openings include part-time positions for riders who can take orders freely and earn double compensation.
Regardless, opening day went well for Didi in Wuxi, reportedly reaching 334,000 orders, according to Panda Daily. So what does all of this say about the rise of the hunger service industry in China? Getting quick, cheap and good service in China has never been easier, but it all does make one wonder just how long theses companies can continue to keep up the price and service war.