China’s largest food delivery company Meituan-Dianping (HKG: 3690) will expand its grocery retail business, called Meituan Youxuan, to 1,000 cities in 20 provinces across China in three months, and later to smaller cities and counties, according to a press release of the company on Thursday.
Meituan launched its Youxuan segment in July, but was only available in Jinan. The move marked its entry into the neighborhood grocery group-buying business. In the WeChat mini program, a designated group leader, normally a stay-at-home mom or store owner, gathers a group of people living close to each other to order products as a group and picks them up in person the next day.
Now, Meituan Youxuan is available in four cities: Jinan, Wuhan, Guangzhou, and Foshan.
The number of daily orders has exceeded 50,000 in Wuhan, one week after it was unveiled in that city, Meituan revealed in the press release.
Under the 1,000-city expansion plan, Meituan, which is famous for delivering cooked meals from restaurants to homes or offices, is to build a nationwide logistics network with its own capability and franchisees’ resources. This network will comprise large warehouses, smaller warehouses, and physical stores, along with a delivery fleet.
The company is now recruiting suppliers of fresh food and daily necessities suppliers, warehouse and delivery solution providers, human resources management service providers, as well as group leaders, salespersons, operational professionals and R&D talents.
Meituan Youxuan is the company’s second attempt in China’s RMB 5 trillion (USD 733 billion) fresh food retailing industry. The company launched a standalone app called Meituan Maicai, in January 2019. Maituan Maicai is now available in five cities including Beijing and Shanghai, allowing online ordering and home delivery within one hour.
China’s huge fresh food retail sector has attracted e-commerce giants Alibaba (NYSE: BABA), with its online-to-offline grocery chain Hema, and JD.com (NASDAQ: JD), with its on-demand last-last delivery platform JD Daojia, as well as a few startups including Bunny Maicai, which just collected USD 10 million, and neighbourhood group-buying platform Nice Tuan.