File Photo/NBD

Apr.14 (NBD) -- Meituan, one of the largest food delivery platforms in China, has come under fire from food vendors for charging high commission fees.

Last Friday, the Guangdong Restaurant Association accused the food delivery platform of monopoly and unfair competition, citing commission fees as high as 26 percent of the bills for new restaurants on the platform.

In response, Meituan said on Monday the commission standards for over 80 percent of restaurants were around 10-20 percent in 2019, which were much less than rumors had it. Besides, a vast majority of its revenues (80 percent) has gone to deliverymen last year.

However, the answer fails to calm the restaurant owners. Earlier on Tuesday, the Association again issued a letter on social media, saying figures in Meituan's response were inaccurate and demanding a more sensible answer before Friday.

Liu Yuanju, a researcher with the Shanghai Institute of Finance & Law, told National Business Daily (NBD) that figures provided by Meituan are credible since it is a listed company. The COVID-19 outbreak caused a shortage of delivery workers, pushing salaries higher, which makes higher commission fees reasonable.

Restaurant owners hold different opinions. "Meituan's commission fee varies in different areas. If set at 25 percent, the costs for restaurants to use Meituan's delivery service will exceed 30 percent plus promotion expenses," said founder of a large chained restaurant in northern China to NBD.

According to the restaurant owner, gross profit rates of most restaurants are around 50-60 percent. After deducting Meituan commissions, rents, utility fees, and salaries, there is not much left, and some restaurants could even face losses. In principle, commission rates above 20 percent will be unbearable for a restaurant.

When speaking of Meituan, Cui Lili, executive director of the Institute of E-Commerce, Shanghai University of Finance and Economics, said that platforms like Meituan should innovate more value-added businesses through transaction data, instead of charging unreasonable fees on transactions it brokers. As a platform with a huge ecosystem, Meituan should also shoulder its corporate responsibilities amid the epidemic outbreak.

Email: limenglin@nbd.com.cn