China's Eateries Offer Discounts as Online Delivery Platforms Raise Rates
Liao Shumin
DATE:  Feb 26 2019
/ SOURCE:  yicai
China's Eateries Offer Discounts as Online Delivery Platforms Raise Rates China's Eateries Offer Discounts as Online Delivery Platforms Raise Rates

(Yicai Global) Feb. 25 -- Many restaurants have jacked up their prices after China's Lunar New Year holiday to cope with increased commissions for online delivery platforms, and this has led to a price differential for in-restaurant and takeaway food, but some establishments are offsetting these with promotions to keep customers happy.

Delivery platforms quietly raised the service fees they charge restaurant owners around the Chinese New Year, state media Beijing Youth Daily reported today, with the highest rise being up to 3 percent per order. 

Platforms' commissions are now up to 18 to 26 percent in some places.

Different pricing for delivered food and that consumed in eateries rose in about one-third of the over 50 Beijing bistros which Yicai Global's reporters investigated. 

Most restaurants also started promotions simultaneous with the price rises, so that the actual amount consumers pay ordering online is paradoxically slightly lower than that paid when dining out with these discounts, restaurant managers said. 

Restaurateurs believe this method can lure customers and ensure their pocketbooks do not take too big a hit.

The combined market share of mega-platforms Meituan Dianping and Ele.me now tops 90 percent, and their primacy in the sector will only become greater as Didi's food delivery service sets its gaze overseas and Baidu's takeout business undergoes a name change. 

These platforms will thus have an ever greater say even as eatery owners have less and less of a voice in setting prices.

Editor: Ben Armour

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Keywords:   Meituan Dianping,Ele.me,Delivery Platforms