{"id":21385,"date":"2017-11-12T16:11:12","date_gmt":"2017-11-12T21:11:12","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/ele-me-digitizing-the-food-delivery-service-in-china\/"},"modified":"2017-11-13T13:00:13","modified_gmt":"2017-11-13T18:00:13","slug":"ele-me-digitizing-the-food-delivery-service-in-china","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/ele-me-digitizing-the-food-delivery-service-in-china\/","title":{"rendered":"Ele.me, Digitizing the food delivery service in China"},"content":{"rendered":"

Have you ever been hungry in your home at night, unable to order food other than the local pizza? This common occurrence is what led Zhang Xubao, a Shanghai Jiao Tong University student, to start an online food delivery service called Ele.me (Chinese for \u201cAre you hungry.\u201d)<\/p>\n

Ele.me<\/a> is an \u201conline to offline\u201d (O2O) platform for mobile users created in 2008. Their platform provides users the ability to interact with restaurants for food delivery in a way that was previously not available. By the end of Q2 2017, over 130 million users ordered food from 1.3 million restaurants in over 1400 cities, and their system processed more than 9 million orders daily [1].<\/p>\n

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Digitalization and fast expansion<\/strong><\/p>\n

\u00a0<\/strong>With the rapid increase in mobile devise users, Ele.me<\/a> strategically designed their product to be mobile friendly. By doing so 99.5% of orders made are now from a mobile device. In 2014, they were able to work a strategic partnership with Dazhongdianping (China\u2019s Yelp) that provides user dining preference data into their app [2]. This partnership gave them the push they needed to get large numbers of restaurants agreements, and drove a huge influx of new consumers.<\/p>\n

They quickly realized that being able to process orders through an e-payment system was necessary. Their strategic partnership, and investment of USD1.25b in 2016 from Alibaba solved that issue as they incorporated Alipay into their system [3].<\/p>\n

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On-going Digitalization \u00a0<\/strong><\/p>\n

Until recently the company was focused on growth, but with its leading size and market command, it is now moving its focus to profitability. They believe the key to profitability is to continually build and maintain a customer base of middle-high income white collar individuals and households. These people maintain loyalty and spend more on higher end restaurants, hence the ability to turn a profit is greater than focusing on younger, less loyal student customers (See Exhibit 1). In order to provide the required levels of service to maintain \u00a0this consumer base, a certain level of delivery speed and food quality is vital (See Exhibit 2). Ele.me has been looking to better leverage digitalization to reduce cost, increase efficiency and improve the client experience.<\/p>\n

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Some customer experience initiatives include:<\/p>\n