Meituan Dianping to Deepen Takeout Fee Cuts in Southern China After Backlash
Zhang Yushuo
DATE:  Apr 20 2020
/ SOURCE:  Yicai
Meituan Dianping to Deepen Takeout Fee Cuts in Southern China After Backlash  Meituan Dianping to Deepen Takeout Fee Cuts in Southern China After Backlash

(Yicai Global) April 20 -- Meituan Dianping will boost its fee cuts for high-quality restaurants in southern China's Guangdong province to ease local takeout outlets' plight amid the Covid-19 epidemic.

The temporary discount increases will go from 3 percent to 6 percent and continue for at least two more months, the Beijing-based company and the Guangdong Restaurant Association said in a joint statement on April 18.

On April 10, the catering alliance warned the regional No. 1 takeout platform that it may face legal action if it doesn't stop limiting restaurants' partnerships with other service providers and cut fees amid the pandemic that has kept many eateries nearly empty for weeks.

Meituan Dianping generally takes commissions that trim new partners' sales by up to 26 percent and makes them sign exclusive partnership deals, according to the GRA.

The company responded on April 13 that it made less than 2 mao (US 3 cents) per delivery order in the fourth quarter and that its fees were already pruned because of the pandemic. That was questioned by the GRA the same day.

Catering alliances in eastern Shandong and northern Hebei provinces, as well as southwest Yunnan and Sichuan provinces and the city of Chongqing, have requested Meituan Dianping to lower its fees amid the epidemic but their Guangdong peer has been the first successful discounting catalyst.

The lifestyle platform has already warned about a shrunken revenue outlook for the first quarter after posting its first profit last year.

Last year, Meituan Dianping’s takeaway revenue jumped 44 percent to CNY54.8 billion (USD7.7 billion) from 2018, accounting for 56 percent of its total, according to the firm’s annual report. Within the tally, income from takeaway commissions was CNY49.7 billion, while the cost of delivery ate up more than four-fifths of that.

Editor: Emmi Laine

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Keywords:   Meituan,takeout,cuisine,Guangdong,delivery