As of mid-May， WeChat users are able to use an applet called Fengshi， operated by China’s courier giant SF Express， for food delivery. Major catering brands present on Fengshi now include Dicos， Xibei Restaurant， Ajisen Ramen， and Kungfu Restaurant.
　　In its description， Fengshi， literally meaning SF Eats， claims to be a platform providing food delivery service for corporate users， and one has to fi rst identify as a corporate user before making an order.
　　Fengshi is a platform operated with the original intention of delivering food for SF staff during the epidemic period. At present， it mainly caters to the staff at SF’s offices across the country. “We are also considering the future of this applet，” SF said in a statement sent to China Industrial Economy News.

Focus on group meals

　　Food delivery for groups can help catering enterprises maintain business during the epidemic period， and SF’s move is also a timely response to the call of various local governments to promote food delivery for groups. Food delivery players Meituan Dianping and Ele.me focus on individual customers， so focusing on groups will be a better way for SF to enter this market， Yan Shiqi， a researcher with Zero Power Intelligence Group， said.
　　“But difficulties remain in stimulating domestic demand for group meals and developing this market segment. To reverse its losses， SF needs to further explore the group meal market and win over consumers，” Yan said.
　　SF’s financial reports show that the courier giant suffered losses of 379 million yuan （$53.16 million） in 2019， and during the fi rst quarter of this year， lost 2.04 million yuan （$286，115）.
　　Yan said SF is attracted to food delivery because of the rapid growth of the market in recent years， especially that of market leader Meituan Dianping. From the second quarter of 2018 to the second quarter of 2019， the quarterly sales revenues of Meituan’s food delivery service jumped from 8.91 billion yuan （$1.25 billion） to 12.8 billion yuan （$1.8 billion）.
　　According to a report from iiMedia Research， the value of China’s group meal market reached 1.5 trillion yuan （$210.38 billion） in 2019， accounting for 33.23 percent of the value of China’s catering market. It is estimated that in 2020， the value of China’s group meal market will grow by 12.67 percent to reach 1.69 trillion yuan （$237 billion）， accounting for 35.65 percent of that of the country’s catering market.

A new competitor

　　“We are preparing to join Fengshi and the negotiation is ongoing，” Chen Tianlong， founder of King’s Pizza， told Nanfang Daily. Chen believes it is undoubtedly good news because SF provides a new delivery option for catering enterprises. Focusing on group meals is a very good idea for business development， which will make Fengshi different from Meituan Dianping and Ele. me， he said. Group meals require higher standards of delivery， while SF has significant advantages in temperature-controlled delivery.
　　Fengshi charges no commission fees from food providers at present， and the commission fees will not exceed 5 percent in the future， in contrast to 15-20 percent charged by Meituan Dianping and Ele.me.
　　On April 10， the Guangdong Restaurant Association， following complaints from hundreds of restaurants in the province， published a letter on its WeChat account addressed to Meituan Dianping， expressing strong dissatisfaction with its high commission fees. The letter says the commission fees charged by Meituan’s delivery services to newly joining restaurants are up to 26 percent， which is not acceptable to a large number of restaurants.
　　Chen said the demand for group meals mainly comes from schools， government agencies as well as corporations and conferences. Schools and government agencies， which account for the majority of demand， mainly contract large-scale catering enterprises for delivery， instead of relying on online platforms. Therefore， there was no successful online platform for group meals before Fengshi.
　　With its advantages in delivery service， it is easier for SF to enter the food delivery market for corporate group meals， which is a niche market with little competition from the two market leaders in food delivery， Chen Liteng， an analyst with the Internet Economy Research Institute， told Nanfang Daily.
　　According to him， due to the novel coronavirus， the demand for dine-in service of restaurants has plunged， stimulating growth of the food delivery service. But the high commission fees of Meituan Dianping and Ele.me have caused resentment， providing an opportunity for other food delivery service platforms. Entering the food delivery market at this moment and through the segment of group meals， Fengshi can avoid immediate competition with Meituan Dianping and Ele.me， which will help it gain market share.
　　“In addition to SF’s advantages in logistics， entry of Fengshi means the competition in the entire food delivery market will intensify in the future， and it will further invigorate the market，” he said.

Challenges remain

　　As to whether SF will squeeze the market shares of Meituan Dianping and Ele.me， Chen Liteng said since Fengshi is focusing on group meals， which is a small segment of the market， its infl uence on the current food delivery market will be limited， and its contribution to SF’s business performance will also be limited. However， it is hard to rule out the possibility of SF also entering the market of individual customers， which is the major target customer group of Meituan Dianping and Ele.me. If that happens， there is bound to be fierce competition even if their business models are different.
　　The group meal market is still highly fragmented with numerous small businesses but no industry giants. Figures from the China Cuisine Association show that 99 percent of the businesses in the country’s group meal industry have annual sales revenues of less than 100 million yuan （$14 billion）， and the aggregate sales revenue of the top 10 in the group meal market stands at 55 billion yuan（$7.71 billion）， accounting for a mere 5 percent of the entire market.
　　Despite its advantages and opportunities， SF’s Fengshi service is also facing some challenges.
　　Ele.me has launched group meal delivery service for corporate users， and Meituan Dianping also provides working lunch delivery service. It may not be easy for Fengshi to totally dominate the group meal delivery segment.
　　Yan said many firms have tried the business of group meals but didn’t achieve success， with the biggest problems lying in attracting and retaining customers. SF has advantage in gaining customers because it has established cooperation with many large enterprises in China through its express delivery service. But the market should be cautious about how the advantage of SF in terms of corporate client base translate into the success of its food delivery business.
　　“Whether Fengshi will succeed depends on the market response，” Yan said.