Chinese Food Delivery Platforms Ele.me and Meituan Reduce Commission for Pandemic-Affected Merchants
Leading Chinese food delivery platform Ele.me announced on Wednesday that the company will invest 20 million yuan ($3.17 million) to carry out reductions to its corporate commission for catering businesses across 87 districts and counties in China that were listed as high-risk for COVID-19 in January and February 2022. The company has not set any additional thresholds or review requirements for eligibility.
According to Ele.me, small and medium-sized merchants are comparatively more affected by the ongoing pandemic, so the company tries its best to make the rules clear and simple. All business partners in the mentioned areas will enjoy commission reduction for at least 15 days, and the returned funds will be directly transferred to the business account before the end of March. Businesses in medium and high risk areas declared by the government after March 1 will also enjoy the same favorable policy. In addition, the firm will introduce a special business closure protection plan for merchants affected by the pandemic, so as to protect their rights and interests.
In addition, Meituan, another leading e-commerce platform focused on local life services, announced on March 1 that the firm’s commission for pandemic-affected merchants will be halved, and the commission fee of an order will not be higher than 1 yuan ($0.16). For the challenged small and medium-sized merchants in high-risk areas whose average daily transaction volume has dropped by more than 30%, the technical service fee for Meituan will be halved, and each order of this fee will be capped in 1 yuan. The effective time of this measure is from the date a local area is first listed as a medium to high risk area to one month after controls are lifted, so as to help merchants reduce their financial burden.
Moreover, Meituan will launch six support measures to help small and medium-sized businesses. For businesses with operational difficulties, the commission fee will be capped at 5%. According to Meituan, in February 2022, the number of merchants with food delivery transactions less than 5,000 yuan expanded to 540,000. The challenged merchants, who have made their commission transparent to public, will be evaluated by Meituan according to the operating conditions and the degree of difficulty. Their technical service fee will be capped by 5%. The effective time of this measure will last from March 2022 until the end of December 2022. More than 1 million merchants will reportedly benefit from this arrangement. For merchants who are mainly engaged in the food delivery business and have special difficulties, Meituan will also provide one-on-one support.
The above measures are also related to Chinese national policies. On February 18, China’s National Development and Reform Commission issued a notice announcing a number of measures to promote the recovery and development of challenged industries in the service sector during the pandemic. The regulators plan to guide internet platform enterprises, such as food delivery platforms, to further lower the service fee rules of merchants in the catering industry and reduce their operating costs. In addition, the regulators will guide internet platform enterprises to provide preferential service fees to catering companies in county-level administrative areas where medium- to high-risk areas are located.