China’s rapidly diversifying Internet giants are taking on Western food chains at their own game—door-to-door delivery—and finding a huge appetite among urban consumers, according to The Wall Street Journal.
Wooing customers with discounted dishes and the choice of thousands of restaurants, startups backed by the likes of Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are enjoying brisk business as more diners opt to order in.
The growing fleet of motorbike couriers on Chinese roads is the latest challenge to long-established but struggling Western companies such as McDonald’s Corp. and Yum Brands Inc., which owns KFC and Pizza Hut outlets. For years, the fast-food chains got a leg up over rivals by speeding hamburgers and fried chicken to buyers’ homes and offices, building their own armies of bike-driving couriers who dash out orders that were phoned in or place online.
The Western chains became popular in China for two main reasons: “Because they were foreign and they delivered,” said Nathan Snyder, a research analyst at brokerage CLSA. “That’s no longer an advantage,” he said, referring to the delivery.
Startup companies Ele.me and Meituan Waimai, which operate via mobile applications and are backed respectively by Tencent and Alibaba, are getting economy of scale by teaming up with tens of thousands of food outlets across China.
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