Meituan-Dianping is testing a new Pinduoduo-style group buying feature for its core food delivery services, Chinese media reported.

Why it matters: The Chinese food delivery giant and services platform is taking a leaf out of Pinduoduo’s book by integrating social elements in its platform to boost user engagement for food delivery from restaurants.

  • After five years of fast growth, China’s food delivery industry is losing steam as the market saturates. Transaction volume in the sector expanded at 30% year on year in 2019. While still healthy, it was the slowest growth in four years, according to a report from mobile intelligence platform Trustdata.
  • Meanwhile, Meituan is seeking new ways to maintain growth momentum in the face of competition from old rival Ele.me, as well as new threats like mobile payments platform Alipay, which is exploring local services—Meituan’s home turf.
  • Targeting price-sensitive groups, Meituan’s new group buying feature could help the company consolidate its foothold in lower-tier cities, a major growth engine for the food delivery industry.

Details: Pinhaofan, Meituan’s new social shopping feature for food delivery, is available through its WeChat mini program, National Business Daily reported (in Chinese).

  • The feature encourages users to share food links from Meituan’s WeChat mini-program with their friends and family to earn discounts through group buying, according to the report. The model resembles the “social e-commerce” strategy that underpins the tech giant’s phenomenal growth over the past four years.
  • Currently under early testing, the feature is only available in Wuhu, a third-tier city in eastern China’s Anhui province, another sign that Meituan is targeting lower-tier markets.
  • The company is offering generous subsidies to customers who use the feature and promises free delivery with no packaging fees. Restaurants typically charge customers RMB 1 ($0.14) to RMB 2 per dish for the takeaway packaging.
  • Compared with normal buying, there are limitations on orders made through Pinhaofan. Customers who place orders together are required to order from a limited menu at the same store. In addition, each user can initiate or join up to four orders every day, according to the report.
  • A Meituan spokeswoman declined to comment when reached by TechNode for further details on Friday.

Context: Meituan previously added a group buying feature covering physical products such as beauty products, household appliances, fruits, and snacks to its WeChat mini program in 2018.

  • The company announced an organizational adjustment in early July to launch a premium business division for community group buying services.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.