File photo/Zhang Jian (NBD)

May 7 (NBD) -- Chinese O2O life service platform Meituan-Dianping ("Meituan") on Monday announced its decision to open its delivery platform to third parties. 

The move, in the eyes of some industry insiders, is aimed at improving delivery efficiency while reducing costs and grabbing a bigger slice of the instant delivery sector. 

To date, Meituan's delivery platform has reached cooperation with brands including French supermarket chain Carrefour, fruit retailer Pagoda, drug-selling company Dingdang Medicine Express (Beijing) Technology Co. 

National Business Daily (NBD) noticed that driven by the fast growth of the food delivery market, Meituan has established a broad distribution network which includes nearly 10,000 delivery stations and covers more than 2,800 cities and counties. With over 600,000 daily active delivery workers, the company's delivery teams now serve over 3.6 million merchants and 400 million users nationwide. 

Coming along with the rise in the company's revenue is the cost of delivery workers, which is to largely blame for the company's loss. 

NBD learned from Meituan's annual financial report that the life service provider's full-year loss reached around 11.1 billion yuan (1.6 billion U.S. dollars) in 2018, up 189.7 percent from a year ago. The cost of delivery workers rose to 30.5 billion yuan, representing a year-over-year rise of 66.5 percent. 

By opening its platform and allocating delivery orders to third-party partners, Meituan can better integrate resources by cooperating with enterprises along the industrial chain, thus creating a more extensive and powerful instant delivery ecosystem. 

Despite advantages in resources and technologies in the instant delivery sector, Meituan is facing serious challenges as there have been a number of powerful players. 

In June of last year, delivery titan SF launched the intra-city express service in Beijing, with orders to be delivered within one or two hours on average. Crowd-sourcing logistics companies that previously focused on the last-mile distribution, such as FlashEx, Dianwoda and Dada-JD Daojia, have grown into major players in the niche segment. 

In addition to the immense pressure from rivals, guaranteeing food hygiene and safety after opening the delivery platform will be another challenge for Meituan to overcome.    

Email: lansuying@nbd.com.cn