CNBC AI News – July 17th – Amidst the intensifying “delivery wars” in China’s fiercely competitive food delivery market, Meituan’s core local commerce CEO, Wang Putao, addressed concerns surrounding platform commission fees in a recent interview.
The discussion, prompted by widespread scrutiny of Meituan’s fee structure, focused on the apparent disparity between merchants’ perceptions of high commissions and the platform’s stated figures. The core issue: perceived commission rates versus actual take.
Many merchants have publicly voiced concerns over account statements suggesting Meituan levies commissions as high as 20%. This contrasts sharply with Meituan’s claims that effective commission rates range between 6% and 8%. So, what’s fueling this discrepancy?
Wang Putao acknowledged the confusion, stating, “This is our failing; we didn’t clearly articulate the two different fees.”
He elaborated that the total fees observed by merchants are composed of two distinct elements: “One is the technical service fee, which is the actual commission, averaging less than 8%. The other is the delivery service fee, with an average per-order delivery cost nearing 7 yuan. We collect both together, leading merchants to perceive a combined rate exceeding 20%.”
Wang further explained the dynamics at play before the current competitive landscape intensified. “Before this ‘war,’ the average order value was around 30 yuan, with delivery costing 7 yuan per order. Consumers effectively paid 1 yuan for delivery, a subsidized amount. The remaining 6 yuan was jointly covered by Meituan and the merchant, with additional subsidies allocated to longer-distance deliveries.”
He emphasized that this 6 yuan, when divided by the 30 yuan order value, accounts for the 20% figure that merchants are observing. This means a substantial portion of a merchant’s payment goes directly to subsidizing delivery costs.
The crux of the issue, Wang stressed, is that the delivery fee, the source of merchant complaints, is not platform revenue. It is collected by Meituan on behalf of the riders. The lower average order values have simply magnified the relative impact of delivery costs and the commission rate.
“We only earn a little over one yuan per order. However, we must strive to lower operating costs for merchants and increase efficiency across the industry.”
Wang addressed another critical question: “Before the ‘delivery wars,’ merchants paid Meituan an average of over 20% per order, with the majority going to riders. Does this include marketing expenses paid to Meituan?”
He clarified: “No, it does not. Advertising fees paid to the platform are a small fraction – significantly smaller compared to e-commerce platforms. The bulk of marketing expenses is attributed to subsidies offered to users by the merchants themselves.”
These merchant subsidies are discretionary, Wang noted. The surge in new restaurant openings – 4.51 million in 2024 alone – creates fierce competition. Merchants are increasingly incentivized to attract customers through targeted subsidies.
Wang concluded that the underlying problem is the depressed average order value during the “delivery wars.” With consistent or increased rider earnings coupled with merchants aggressively subsidizing consumers, the proportional impact of these costs increases substantially. This puts pressure on everyone in the value chain to find efficiencies.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/4927.html
