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Photo/Shetuwang

May 12 (NBD) -- SF Tongcheng, the intracity rush delivery spin-off of China's top courier SF Holding (002352.SZ), has recently piloted a food delivery service, triggering speculation that the delivery giant may make maneuver in the highly competed sector.

The service, named Fengshi, was launched as a mini-program inside Tencent's super app WeChat. Currently the platform has signed 52 restaurant chains including Pizza Hut, Yoshinoya, and Ajisen Ramen.

SF Tonghcheng told National Business Daily that the service was originally developed to address the meal demands of the company's own employees during the COVID-19 outbreak, but it will be opened to the public once the system is well refined.

The service mainly targets enterprises' group meal demands, SF Tongcheng said. The company started an incentive package worth of 5 million yuan to reward recommendations of the service to companies.

The focus on corporate demands helps SF Tongcheng avoid direct competition with established food delivery giants Meituan Dianping and Alibaba Group-backed Ele.me, Chen Liteng, analyst with e-commerce research organization ECRC, told NBD.

The market scale of group meals in China reached 1.5 trillion yuan in 2019, amounting to 30 percent of the country's dining industry, according to a report by iiMedia Research.

Besides, the high commission fees charged by major platforms are increasing restaurants' interest in new channels like Fengshi, Chen added. It is noted that Fengshi has promised zero franchise fee and low commission rate to restaurants.

Since February, multiple restaurant associations in China have demanded Meituan Dianping and Ele.me to lower commission fees, as the food industry suffered a heavy blow from the COVID-19 outbreak.

However, so far many restaurants are taking a wait-and-see attitude towards Fengshi as orders from the platform remains limited. And some expect the demands for group meal deliveries to decline as canteens in companies and schools reopen after the outbreak dies down.

 

Email: gaohan@nbd.com.cn

Editor: Gao Han