In Beijing, it’s often cheaper to have food delivered than to get it yourself. Like, way cheaper. Abey Lin, a 19-year-old Californian studying at Beijing Film Academy, uses his smartphone to order a local restaurant’s roast duck dish for 20 yuan ($2.99), about 80 percent less than it costs at the register, via delivery app Meituan. He can get a 40 percent discount on two pizzas topped with golden potatoes and barbecued seafood. Meituan charges $1.46 for a bean curd dish from another shop, a little over a third of the price on the restaurant’s menu. It would be tough for Lin to beat that price even if he had a kitchenette to make the dish himself. “It blew my mind,” he says.
…Across the country, millions of people like Lin are ordering in two or three meals a day, as well as groceries, office supplies, haircuts, massages, and whatever else they might want. Behind this $35 billion delivery market isn’t exactly efficiency, though—it’s a fight between Meituan and Alibaba Group Holding Ltd., China’s most valuable company. Alibaba and its various subsidiaries dominate the country’s online retail market for physical goods, but Meituan is leading the way in services. Its namesake app, a sort of mashup of Grubhub, Expedia, MovieTickets.com, Groupon, and Yelp, has 600,000 delivery people serving 400 million customers a year in 2,800 cities. 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.
…Inside, digital screens fill the walls of the network operations center, showing blue-and-white maps annotated with real-time orders, deliveries, merchants, and customers. One map showing all of China flashes with the company’s activity in each province. Another shows live shots of Beijing deliverymen zipping from stop to stop. Artificial intelligence software helps determine drivers’ itineraries. An average driver makes 25 deliveries a day, up from 17 three years ago; that’s about 20 million daily deliveries across the network. For comparison, Grubhub Inc., the U.S. leader and owner of Seamless, delivers fewer than 500,000 meals a day. Meituan’s scale dwarfs that of India’s dabbawalas, who deliver some 80 million pail lunches a year.