Ele.me to expand into new delivery businesses
Jun 10, 2019 (China Knowledge) - Food-delivery company Ele.me will also be looking to expand into other businesses such as grocery delivery under its own brand name, following in the footsteps of rivals Meituan-Dianping.
The move highlights the need for Chinese food-delivery companies to better utilize their delivery networks to lower costs and boost revenues, especially during the periods right before and after mealtimes when most of their delivery workers stay idle.
While it is difficult to further reduce delivery manpower costs significantly as the Chinese food-delivery sector is still extremely competitive and highly subsidized, the inclusion of new businesses such as fresh foods and medication will help these companies to boost revenues.
Average cost of manpower per delivery is expected to fall to RMB 7 this year from RMB 7.6 in 2017 and remain at there as RMB 7 per delivery is the base level and any further decrease is unlikely.
Currently, Ele.me’s logistics arm, FN Logistics has already signed up vendors such as Starbucks, beauty chain Watsons as well as Alibaba’s Tmall and AliHealth.
Similarly, Meituan’s own delivery brand has secured vendors such as Carrefour, food franchise group CFB Group, fruit distributor Pagoda and online supermarket Dmall.
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