
In Beijing, it’s often cheaper to have food delivered than to get it yourself - smn1234
https://www.bloomberg.com/features/2019-meituan-china-delivery-empire/
======
duado
One cost advantage to delivery is that you can prepare the food in conditions
so horrifying that nobody would eat it if they saw it in person. Some of the
Deliveroo-exclusive restaurants in London are like this, inside shipping
containers.

~~~
beardog
Such as using Gutter Oil (not limited to delivery), a practice where cooking
oil is retrieved/derived from random unsafe sources such as sewers, a practice
thought to be common in parts of China:

[https://en.wikipedia.org/wiki/Gutter_oil](https://en.wikipedia.org/wiki/Gutter_oil)
[https://www.youtube.com/watch?v=zrv78nG9R04](https://www.youtube.com/watch?v=zrv78nG9R04)

~~~
cstrat
Honestly I had never even thought that this would be a thing. Shocking.

Whenever I have traveled, I always enjoy trying street food but this has put
the fear in me... at least if I travel to China.

edit: slightly disappointed I can't express my feelings by using the vomiting
emoji on HN...

------
rajeshp1986
The reason this would work in Beijing or for that matter anywhere in Asia is
how the delivery itself works. The delivery guys use scooters or motorcycles
in a densely populated area which reduces the cost of delivery. Food delivery
startups are not able to scale up in markets like US where delivery guys are
expected to use their own cars, pay for gas and high insurance while
delivering you $10 dollar food. How are these companies supposed to make
profits?

~~~
jdfellow
Is there some reason that much of the US you couldn't deliver food by bicycle
or a small motorcycle like a Honda Super Cub?

~~~
calvinbhai
population density, speeds (in suburbs near the big metro areas, you are still
going to be at a much higher speed) which mean not so safe riding speeds,
weather (main reason why car is needed for delivery), lack of low cost
2-wheelers are the supporting infra (for maintenance or sales).

I think e-bikes + delivery can make a dent, but only in the super dense cities
where ebikes/escooters are popular/available.

~~~
SilasX
Isn't it also a factor that, in SF, small vehicles need extra time to secure
or they'll be stolen?

~~~
calvinbhai
I think that's true in many places in the US, not just SF. Mostly cities
though.

------
cepp
Just an anecdote on the price and quality of delivery in China -- I've lived
in China for a total of 1.5 years on and off. I've yet, to date, cook a meal
myself. 饿了么 and 美团 are so convenient that you can order just about any meal
and have it delivered in 20 minutes. Unlike the massive fees and wait time in
the US, you'll normally get the meal still hot for less than 5RMB (less than
1USD) for the delivery.

~~~
throwawaybeij
Reasons why these kind of stuff works in China

\- People prefer to stay indoors. Air pollution that reduces your lifespan
exists in cities like Beijing and Hebei - even Shanghai (certain months during
winter time). Extreme heatwaves during summer time that has the city cooking
in 40-50C....it gets so hot that people sleep outdoors on sidewalks! (Shanghai
will supposedly be unlivable in 30 years due to extreme heatwaves)

\- cheap(-ish) labor, although now labor costs matches that of Mexico

\- shitty food sanitary conditions, now with no storefront. Have fun figure
out whether your cheap delivered food was cooked with gutter oil or not.

\- questionable food ingredient quality. tons of fake stuff abounds.

~~~
reaperducer
_it gets so hot that people sleep outdoors on sidewalks_

Off topic, but I find it funny how society has changed so much in so little
time.

When I was growing up in New York, if it was hot, many people in the
neighborhood would sleep outside — especially people in apartment buildings.
You'd see dozens of them snoring away on fire escapes.

Now those same families probably can't imagine living without air
conditioning, even though the city is so much safer today.

~~~
ghaff
The norming of AC in so many places has been quite the shift. I live in an old
house in Central-ish fairly rural Massachusetts and I sometimes get funny
looks from people when I tell them I don't have AC. (I do have a small window
unit I use for sleeping for a week or two in a typical summer when it gets
uncomfortably hot to sleep.)

When I was an undergrad and spent a couple summers in the city in the Boston
area, no AC at all.

~~~
Symbiote
I got many funny looks from hotel staff on a recent trip for asking how to
switch off air conditioning, or asking them not to turn it on when they showed
me to my room. Apparently most tourists prefer to sit in a fridge.

If I've been walking round outside at 32–35°C, there's no way I want to be in
a room at 16–18°, let alone sleep in one. I usually set it to 28° and slept
without any bedclothes.

~~~
Aromasin
I'm very much in the same boat as you. It's a pet peeve of mine that every
building now seems to have a completely different climate to the outside
world. I'll never get how people don't understand - or don't want to go
through - the process of acclimatisation. If it's 30C outside, having the AC
on at 20C all day is of course going to make 30C seem unbearably hot!

As a student I lived in the North of England in Newcastle, where temperatures
averaged around 0C in the winter and because we couldn't afford heating the
house was often around -2C. I would still walk around in t-shirt and shorts
without problem. I later moved in with a group of girls who had the heating
knocked up to 25C all year round, and within a week stepping out of the door
felt like jumping into an ice bath. Rapid temperature change mess up so many
of our bodily processes that I'm amazed it's discussed so little. If I don't
sleep with a window wide open I know I'll struggle to get even a single cycle
of REM sleep, and almost all of the people I've convinced to try sleeping with
a window open and the heating off have told me their sleep improved ten-fold
after a couple of weeks.

------
combatentropy
Meituan's head, Wang Xing, "calls Facebook Inc. a copycat for imitating other
online services." But then the article goes through his past work:

1\. "...in 2003, he dropped out, inspired by Friendster, a Facebook precursor,
to create a social network for China."

2\. "Their 2007 effort, a popular Twitter look-alike called Fanfou..."

3\. "In 2010 he created Meituan in the mold of Groupon..."

4\. "...he plans to introduce an Amazon Prime-like subscription service."

I myself don't care if you copy an idea. In fact it seems unavoidable, because
"there is nothing new under the sun," "everything is a remix," and "ideas are
just multipliers." What differentiates your business is your execution. Apple
did not come up with new ideas. They took old ideas and did them really,
really, really well. They didn't invent the graphical user interface. The iPod
was not the first MP3 player. The iPhone was not the first smartphone. The
iPad was not the first tablet computer.

~~~
tapirl
Wang Xing holds the same opinions as you. He doesn't criticize Facebook.

------
b_tterc_p
How does this work? If the food costs 80% less on the app than at the
register, either the restaurant is losing the lion share of its massive
margins (unrealistic) or they’re just subsidizing it with investor money. But
that would seem to be impossibly high subsidizing. Is it simply that in China
you can quadruple down on Amazons strategy of promising profitability later?
The article doesn’t explain this well and even goes to say that this guy is
the conservative spender with founding money. If it is the latter... this
feels like a terrible strategy.

~~~
chewz
Dark kitchens - the quality is shit, that's how. Plus slave work.

[https://www.sustainweb.org/jelliedeel/articles/dark_kitchens...](https://www.sustainweb.org/jelliedeel/articles/dark_kitchens/)

[https://www.theguardian.com/commentisfree/2018/oct/09/dark-k...](https://www.theguardian.com/commentisfree/2018/oct/09/dark-
kitchens-satanic-mills-deliveroo)

~~~
ukoki
I really don't get the whole negativity about "dark kitchens". There is
nothing wrong in theory with a delivery-only restaurant, and there are clear
cost savings that can be passed on to the consumer.

Articles such as the ones you cited talk about the stifling "windowless boxes"
but restaurant kitchens have never been windowed comfortable places. At least
in the UK these kitchens are subject to the same hygiene and labour laws as
any other place where food is prepared. They seem to want to imply that "dark
kitchens" flout these laws but I've yet to see any evidence.

~~~
_nedR
In third countries with lax food safety regulation i feel they matter. When
there are more layers of separation between you and your end customer i think
its human nature that you will be little less vigiliant / anxious about seeing
a cockroach or rat in your kitchen. At some point it isalmost anonymous like
an internet crime.

------
purplezooey
Cooking for yourself is an underrated skill. Many young people can't cook an
ordinary meal. Just think of how many dust bunnies and ass hairs are in the
average take-out.

~~~
foobarbazetc
Cooking for yourself is a good skill but extremely wasteful in terms of lost
time and generated waste products.

~~~
apatters
With good planning and recipe selection this doesn't have to be true. Soups,
stews, pasta, beans, chili etc. can all be cooked in bulk and frozen with no
waste. They can incorporate leftover ingredients from other cooking and can be
quite cheap.

~~~
Spivak
I think the point is that if you the median American and you value your non-
working time at your hourly wage of $27/hr then you're better off not
spending, say 4hr a week, cooking/meal-prepping since you can get a months
worth of food for way less than $432.

You should really only cook your own meals if:

* You enjoy it.

* You value/need your money more than your time.

* It's difficult to meet your dietary goals with purchased food.

~~~
xnyan
My costs are less than 200 a month cooking for myself and family (buy in bulk
friends), also I spend time with my family, listen to podcasts and clean while
cooking, so directly assigning my wage to the cost per hour of cooking does
not tell the whole story.

Another factor is health. Maybe in a large city is there is healthy, cost
effective take-out but where I live the options are pizza and Chinese food
after 8pm.

------
devy
> Alibaba is betting it can undercut Meituan to death. Both companies are
> spending billions in an escalating war of subsidies that might persuade even
> Jeff Bezos to cut his losses.

To me, that's the major reason. Meituan is loosing HUGE each month due to
subsidies. Don't forget the food delivery giants in Chinese markets with
highly concentrated population with billions of subsidies. It only works in
selective Chinese Megacities with very cheap human labor and relative cheap
and convenient of electric vehicles. It won't work in anywhere else in the
world (probably not even in India).

------
roystonvassey
It is the case in India too with a bunch of food-delivery startups that have
mushroomed in the last few years. Lot of discounts, cash-backs and what not.
This will not last long but a great time for consumers, for now.

~~~
grawprog
A friend of mine in Indonesia started something similar. They had 3 people.
Their food delivery business basically existed on instagram. Their menu and
everything was on there, they took orders over the phone or through instagram,
they cooked everything up at home and delivered it themselves by motorcycle.
Apparently they were making decent money, but because of local customs
regarding women working and such, were not able to continue.

~~~
smn1234
they had no issues with food regulations, food safety standards, in this
model?

~~~
grawprog
I'm guessing there were no such things. I asked about rules, my friend was
just kind of confused why there would be rules like that. Apparently it was
fairly common to sell food grown and cooked in your home to people, At least
the town my friend lived in. There was another group of their friends they
competed with that ran a similar business, apparently my friend's chicken was
better though, at least she said so. Their food always looked delicious. She'd
send pictures. It looked better than most takeout or delivery available to me.

~~~
matz1
While you can sell food cooked from your own kitchen, but you can't just do
whatever you want, you will for example get in trouble if you sell something
that make people sick.

------
baybal2
Food is cheap in China to begin with. The place in an underground garage
nearby sells CNY 18 meals - a bow of rice + some stew. Downside? Completely
full during lunch hours.

In a company I worked before, before the food delivery craze, we were
regularly ordering fancy restaurant quality catering into office for like CNY
200 for 20 people. And that in Shanghai.

Nowadays, everybody just orders whatever they want themselves.

------
unlimit
Same thing is happening in India. But I have noticed that sometimes you will
get cheaper food by calling the food joints.

One side affect of this whole food delivery is that we are eating more from
restaurants compared to before when we used to go and eat maybe once in 15
days.

Add to it there are always deals going on from the delivery companies.

Zomato and Swiggy rule here.

------
tantalor
Not surprising. It's also cheaper than growing food for yourself.
Specialization increases efficiency.

------
La-ang
Well, Meituan is still losing money according to this article. I am guessing
they're still branding and building loyalty before they defer to increasing
their costs and generating money through other ventures?

~~~
mrunkel
No need to guess. The article states this explicitly.

------
analyst74
I'm curious why those shadow kitchen, or maybe cloud kitchen sound better..
haven't spun up in US.

Is it regulatory? Is it restaurateurs here are less quickly at responding to
changing markets? not enough cost savings?

~~~
smn1234
do you mean something similar to UberEats' "Virtual Restaurants" \-
[https://www.bloomberg.com/news/articles/2018-10-24/uber-s-
se...](https://www.bloomberg.com/news/articles/2018-10-24/uber-s-secret-
empire-of-virtual-restaurants) and an older article on "ghost restaurants" \-
[https://www.fastcompany.com/3064075/hold-the-storefront-
how-...](https://www.fastcompany.com/3064075/hold-the-storefront-how-delivery-
only-ghost-restaurants-are-changing-take-out)?

------
duxup
I just want to say it is really hard to read an article with this horrible add
flashing next to the text:

[https://www.bloomberg.com/bbg-
gfx/video_loops/2019-meituan/m...](https://www.bloomberg.com/bbg-
gfx/video_loops/2019-meituan/meituan_cover.gif)

~~~
nkozyra
For some reason these retro vaporware (aesthetic, not software) graphics are
something Bloomberg thinks are good but are almost always just little vanity
projects that provide no value and end up being distracting.

I really don't know who thought it was a good idea but I'm sure it's fun work
for the artists.

~~~
sosborn
Meh, I like these things. I could do without the bright white arch though.

~~~
duxup
Yeah I'm ok with the style but man that flashing from the white arch is
annoying while trying to read.

------
billfruit
I think that has been the promise of "cloud kitchens" everywhere.

------
oilin
None of that is worth the suffering of having to live in Beijing.

------
aznpwnzor
this is true in SF.

further stratification of eating out as a luxury into premium of being at the
restaurant and cheaper version of getting it delivered

------
abhinai
If robotics matures to a point where food delivery could be fully automated,
could we see similar price inversion in the US?

~~~
vamos_davai
> A delivery­man who would give only his surname, Yang, says he generally
> makes $15 to $30 a day, and as little as 75¢ for a short trip.

Honestly this makes me skeptical of an AI delivery person unless it starts in
high cost of labor countries like the USA. It would be silly to try to beat
the low human labor costs of China or Southeast Asia.

~~~
arcticfox
I wonder if this will be some small type of advantage for Western companies
going forward.

Surely an AI delivery will eventually win in all markets, but who's going to
risk trying to build it when the max theoretical benefit is a few dollars per
day per worker replaced? In the US the benefit might be 20x that much [1],
making the risk worth investing in.

[1] assuming a hypothetical hyper efficient drone deliverer costs $15 / day
and a SE Asian delivery worker costs $20 / day, that's $5 / day potential. An
American delivery worker that costs $100 / day leaves $85 / day potential, or
almost 20x as much.

------
heisenbit
Bloomberg discovered major secret: When labor is cheap, untaxed and abundant
you can provide amazing services.

~~~
thatfrenchguy
You mean VC spending here I think

~~~
djanogo
It's traded publicly, so it's regular peoples money. ~20% insiders, ~20%
institutions, 60% regular investors?.

------
jatsign
Off topic, sorry, but curious: Does China still consider itself communist?

~~~
dschn_dstryr
Yes. More specifically, the Communist Party of China is very proud of its
ideological roots going back to Marx, Lenin and Mao. They call their economic
system socialism with chinese characteristics. But they don't see the current
stage to be the full realization of socialism, but as being in the beginning
stage of building socialism.

------
La-ang
This article made me hungry :D

