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CHINA BRIEF | Meituan looks to mend relationship with dining sector by removing “monopoly clauses” and offering commission rebates

Meituan’s move follows a written complaint by the Guangdong Restaurant Association and other 32 trade associations.

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China’s largest food-delivery company Meituan-Dianping (HKG: 3690) has promised a review of its policies toward restaurant operators, as indicated by a joint statement released by the company and the Guangdong Restaurant Association (GRA) on Saturday.

Meituan said in the letter that it will respect merchants’ right to choose “various platforms” to operate their food delivery business, following a written complaint by the GRA, which together with another 32 trade associations, asked Meituan to remove “monopoly clauses” in its agreements and to lower commission fees by at least 5% for its member companies, KrASIA reported.

Currently, Meituan charges commission rates of up to  26% for new restaurants registered on the platform, according to the GRA. On the other hand, non-exclusive partners pay rates of up to 21%, and operators with exclusive agreements to be listed only on Meituan’s platform enjoy a commission rate of 16%, Zhou Bo, a source close to the hot pot industry in Guangdong, told Chinese media outlet Shidai Caijing.

In response, Meituan did not offer to lower its commission fees, but instead said that it will return between 3% to 6% of the commission fee it collects to “good-quality” merchants in Guangdong, without detailing which companies could benefit. Qualifying companies in the province can also enjoy commission rebates for additional two months compared with dining companies in other regions, said the firm.

Meituan has already promised similar rebates of between 3% to 5%,  to “good-quality” merchants nationwide as of March in a campaign called Chunfeng Xingdong.

Last week, the coalition led by the GRA demanded Meituan to respond to its requests by April 17, adding that they may team up with more restaurants and dining associations nationwide to protect their rights if Meituan would decline to respond or adjust its policies.

This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.