Takeout is not popular in Hong Kong with its thousands of restaurants of all sizes and cuisines. But just a few days after Meituan advertised for deliverymen in Hong Kong, the application system crashed.
Photo by Kuang Da
By LIU Weiqi
Just a few days after Meituan started advertising for deliverymen in Hong Kong, its application channel was jammed by thousands of candidates. Candidates have been told that they might have to wait for up to two weeks before thei can expect a response, positive or otherwise.
Meituan has had its eye on the Hong Kong market for years, but has so far been thwarted at every turn.
Serious plans to become established in the city first arose in 2018. At that time, e-bikes were not allowed in the city and that was enough for the grand campaign to be abandoned before it had even got underway. Nothing happened, the pandemic came along and expansion was the last thing on anyone’s mind.
All was quiet until October of last year, when the internet’s beady eye was caught by several overseas job posts advertised by Meituan, all of which were in Hong Kong.
Meituan Dianping is China’s leading platform for lifestyle services and products ordered through its all-in-one app. Meituan’s app handles food deliveries, movie tickets, restaurant reviews among other things, for nearly 300 million Chinese customers.
The Beijing-based company, led by WANG Xing, is the product of a 2015 merger between archrivals, Meituan and Dazhong Dianping, were backed respectively by Tencent and Alibaba.
Tencent is now the main backer of the new entity, while Alibaba cut its stake and invested US$1 billion in rival service ele.me. At its core, Meituan remains a food delivery service that has diversified both horizontally and vertically.
Takeout is not a popular way of dining in Hong Kong. The SAR has thousands of restaurants of all sizes and cuisines. Many apartments in Hong Kong do not even have kitchens. From swirling lazy-susans surrounded by groups of hungry friends to stand-up snacks on the ferry, no one takes anything but leftovers away.
So after hundreds of years of a pretty ferocious local food culture – Hong Kong might be the “foodiest” place in the world - tempting residents to eat at home is going to be a hard nut to crack.
Data platform Statista expects the food delivery market of the city to reach HK$7.4 billion (US$950 million, 6.6 billion yuan) with penetration around 3 percent. Penetration rest at more than 30 percent in the mainland. The Hong Kong market maybe more crumbs from the table than the square meal Meituan expected. itself.
But with Douyin and WeChat queuing up for their slice of pie, competition fon the mainland is heating up again. Turning to Hong Kong for new growth seems like it could be quite a wise choice, but the early arrivals in town got there a long time before Meituan, and they are hardly flourishing.
Foodpanda entered Hong Kong nine years ago, followed by Deliveroo in 2015 and UberEats in 2016. By the end of 2021, Foodpanda and Deliveroo controlled over 90 percent of Hong Kongs deliveries, with UberEats a sad, bad, distant memory.
A number of Hong Kong locals interviewed by Jiemian News said deliveries were their least favorite choice when thinking about something to eat. They describe deliveries as expensive and slow, and they might be right. Take Deliveroo for instance, the delivery fee is at least HK$20, that’s more than 18 yuan. In Shanghai, probably the mainland’s most expensive city, the fee is usually 5 yuan.
Hong Kong may seem small in Western perception but distances quickly mount up. A takeout can easily cost one more than HK$100, with a large proportion of that being the delivery fee.
Mainlanders in Hong Kong are keen to have Meituan as an alternative, hoping it copies the cheap model back home. With Deliveroo and FoodPanda occupying more than 13,000 restaurants, it is not going to be easy.
The first step is of course, spend some money. Meituan is offering new riders bonuses in the first two weeks up to US$2,500, a pointless money burn considering the number of applications
A Facebook post revealed the wages of Meituan deliverymen. Apart from an hourly wage of HK$70, the riders get commissions for each order they deliver. If a rider delivers 500 orders a month, he will get HK$35,000. For a foot soldier – those who deliver on foot – the monthly wage can be up to HK$20,000.
That is very tempting. Before 2019, most deliverymen were employed with an hourly wage of HK$50. But riders are now mostly self-employed with no basic salary but only about HK$50 commission (HK$30 for the foot soldiers) for each order. A bit lower than what Meituan has to offer.
The change means delivery guys must take more orders to make more money, which means spending a lot more time hustling up and down the slopes in Hong Kong. In 2021, 300 Foodpanda deliverymen went on strike, demanding the company to make 15 changes, including a better map system and higher commissions. But a year later, many of the issues remained unsolved so the delivery guys went on another strike.
Foodpanda covers more than 500 cities around the world, yet it still struggles to communicate with its Hong Kong deliverymen. For Meituan with little or no experience outside the Chinese mainland, the challenge is not only about money.
