Ele.me — Circuit of Culture

What is Ele.me?

ELEME operates as an online ordering platform. It provides a variety of gourmet food take away services. Lazhasi Network Technology in Shanghai develops and operates ELEME. It has covered more than 2000 cities in China, with more than 1.3 million joining shops, 15 thousand staff and more than nine million daily orders. The Alibaba Group acquired ELEME in April 2018 and it continues to operate independently. Mark Zhang and Jack Kang, at Minhang Campus of Shanghai Jiao Tong University, founded ELEME in September 2008. Now, it is one of the two biggest take-out online platforms in China. (Another is Meituan, which formed a duopoly market together with ELEME)

Representation

“Everything 30 min” is the core principle of Ele.me. It represents a busy, urban lifestyle.

Fast. Convenient. Cheap.

Because of these strong representations among consumers, in only ten years, online takeaway industry has completed the transition from low-end incremental market to mid/high-end quality market. (also thanks to the ferocious capital competition at the early stage, which largely expanded the market size). Today, many people no longer view takeaway only as a quick and cheap way to fill their stomach. In big cities, you can also find healthy, high-quality, and even luxurious meals on Ele.me. Most of the time, it’s much better than some restaurants you randomly pick when walking around the street.

At the same time, Ele.me has been devoted to developing downstream market, in many underdeveloped areas. After Alibaba acquired Ele.me in 2018, it further expanded the market. People without credit card can also enjoy cheap takeaway service simply by Alipay. With the overall popularization of high-speed Internet and smartphones, convenient online ordering service largely reduced the distance between consumers and producers. Increasing demand for quick delivery also created a lot of well-paid job opportunities for undereducated people. Many unemployed people became a rider of Ele.me, for its flexible working hours and relatively high income.

According to the 48^{^th} Statistical Reports on Internet Development in China released by CNNIC (China Internet Network Information Center) on August 27th, by the end of June this year, the number of online takeaway users in China was over 469 million, which has increased by 49.76 million since December 2020, accounting for 33% of the country’s population. Takeaway has become the first choice of more and more people (especially the young) living in big cities, in place of cooking at home or dining out, which is much more time and money-consuming.

“I think it’s hard to manage how many vegetables and meat I buy… I may have to eat twice or three times until all the foods have been eaten up. I mean, I might eat the same thing for two to three days… I cannot accept that… And I don’t want to waste food, you know, just throw it away like that… So with takeaway food, I don’t have to worry about these.”₁
Ms. Ning, 25

“Cooking is easy. For me, I live alone. If I cook, it is enough for me to have one dish, maybe just mix a piece of pork and some vegetables. However, I will waste more. It is difficult to cook for only one person.”₁
Ms. Mi, mid-20s

According to many young people who live alone, domestic cooking might routinely provision more food than they need, and thereafter create a vast majority of food surplus which ends up as waste. Comparing to the wasteful food preparation process, eating takeaway meals can produce fewer leftovers at home, which also means that you are very likely to spend more money if you try to cook by yourself, surprisingly though.

So, what makes Chinese takeaway food so cheap? “Ghost Kitchen” might be one of the reasons.

Production

Ghost Kitchen

The pandemic has shaken up the restaurant industry in unprecedented ways, forcing restaurants around the world to either shut down temporarily, or adapt to a takeout and delivery model exclusively. In China, many physical restaurants survived the pandemic, relying on the advanced online ordering and delivery system. It is more and more common for an empty restaurant to have a super busy kitchen. Some people believe that the future of restaurants may lie in a trend that started several years ago – ghost kitchens.₂

Ghost kitchens – also commonly known as cloud kitchens or dark kitchens – are professional food preparation and cooking facilities, set up specifically for delivery-only meals. Ghost kitchens actually had been pretty popular long before the pandemic, because of the rise of online takeaway industry. The pandemic only accelerated its domination over the industry, because ghost kitchens largely reduced the operation cost, as well as capital and human cost. Ghost kitchen doesn’t need waiters, nor dining areas. Design can be as simple as possible. The advanced online payment system will replace cashiers and POS. Even the kitchen itself can be located in a remote or noteless place, because location no longer matters, as long as the deliverers can find it — it doesn’t have to attract random consumers. Everything only serves for efficiency, which allows the restaurants to minimize their costs and achieve more standardized, scale production.

However, some people also claim that ghost kitchen can never be the future of restaurants —

“To eat a meal in a restaurant — even a bad meal, even at a fast-casual bowl chain — is to participate in an immersive experience. Things are happening. You are talking to another person, or you are eavesdropping on other people talking. You may be seated, for example, next to somebody who is extensively recounting their transformative experience with energy healing. You might chat with your server about their favorite foods. You might then take that server’s recommendation and find you have unexpectedly ordered a giant plate of curried bamboo shoots.”₃

Ghost kitchens and takeaways obviously can’t offer you such an immersive dine-in experience. The way people choose to eat depends on their different lifestyle. What do takeaway consumers really care about? What is their identification?

Identity

Takeaway food for family meals —-

Mothers who are not good at cooking, or simply just don’t want to.

The normalisation of takeaway food consumption in the domestic is widely discussed to be a way to destroy the “proper motherhood”. Nearly in every culture, ‘feeding the family’ is traditionally understood to be women’s or mothers’ responsibility. Because of women’s increasing participation in the labour market, and the rise of women self-awareness and independence, many working mothers choose to order takeaway as an effective way to manage food preparation for the whole family.₁ Takeaway service offers an opportunity for women to get rid of part of the traditional family responsibility, facilitating female liberation and bringing more equality in marriage and family.

First choice of singletons and introverts —-

Chinese “Table Culture”, the trend of “stay at home” and individualism among young people.

In China, eating with someone else in a restaurant is often considered a very social instead of casual activity. People actively go eat with others who are not necessarily their friends to build social relations, which are very helpful in Chinese society. Drinking Baijiu with someone is broadly considered as a way to “make a friend”. It also shows that you “respect“ that person. In many companies, employees need to eat and drink with their clients or bosses to please them, so that they can make a better deal, or be favored by their bosses. While eating with clients, people also talk a lot about business and their cooperation. Many deals are made right at the dining table.

“There’s no problem that can’t be solved by having a meal together. If there is, have one more meal.”
My Dad, a sales agent.

Because of such a “Table Culture”, many people feel stressful when eating in front of others, even when they are not “working”. Thus, enjoying takeaway food oneself is one way to save them from the busy and exhausted modern life.

In addition, the One Child policy that started few decades ago has created a large number of spoiled ‘little emperors’ in Chinese families. Nowadays, these singletons have grown up and become the key consumers in Chinese society. The young Chinese urban consumers, who are bold, individualistic, self-centred, lonely and materialistic, are crafting new lifestyles based on self-fulfilment, indulgence, experimentation and exploration. Unlike their thrifty parents who intend to sacrifice themselves to the nation or collective work unit, these young people are more materialistic and desire to have a more individualised lifestyle.₁

Many young people in big cities choose to live alone and stay single, refusing to build a family. It’s not only because they’ve been used to loneliness, but also because it allows them to have a more individualized life, to live the way they want. As a result, takeaway service that saves them a lot of troubles, and at the same time enables them to enjoy a variety of food at home becomes their first choice of eating.

With the growth of e-commerce (including e-retail, e-wholesale, and digital information and entertainment products) and the regular access to the internet in China, the consumer cultures, especially those of young adults, have largely changed into an online one. People trust and feel attached to the Internet, because data and algorithm knows you better even than yourself. In terms of ordering takeaway food, everyone’s personalized, unique eating habits and tastes can be fully illustrated by Ele.me’s customized recommendation.

Consumption

home page of Ele.me Takeaway that shows the list of restaurants nearby (left), the ordering page of one specific restaurant (right).

In China, whenever you feel hungry, the first thing that comes to your mind is Ele.me or Meituan, instead of a thing you exactly want to eat, because the platform will tell you what you want. Aftering ordering for several times, when you open the app, different restaurants will be ranked and presented according to your tastes calculated by algorithm, unless you choose to sort by categories.

On Ele.me, you can buy a pretty good lunch within 40 rmb, equals to 6.3 dollars. There are even meals less than 3.5 dollars, still tasty and filling. And that’s all you need to pay. No service fee, no delivery fee, no tips, no tax (tax is always included in the price in China). You can also join the membership for more coupons and discounts. The platform also gives you some rewards from time to time, to keep you using it. But it’s said that rewards will gradually reduce if you keep using only Ele.me or Meituan, cause you’re getting attached to it. Switching between the two apps saves you the most money.

comments from actual consumers with pictures and reflections

Regulation

Regulation on riders: Pressing Algorithm

tighter and tighter time limits v.s. lack of basic labor and employment protections

Food delivery workers, who are considered part of the “gig economy” and often lack formal employment status, have it worse than most. They are more isolated and under constant pressure, pushed by their platforms’ algorithms to rush and work overtime. In 2020, 95% of riders worked more than eight hours per day, 66.8% worked more than 11 hours, and 28% worked more than 12 hours, according to research by the Beijing Yilian Labor Law Center.₄

Last September, a weibo article “delivery riders are trapped in the system” got over 3 million hits and sparked heated discussion on the terrible way that takeaway platforms’ riders had been treated. Because of the penalty of overtime arrival, riders always have to rush and dash around, which has been causing countless traffic accidents. In the article, some riders interviewed said the navigation by the route prediction system ₅ could be ridiculous sometimes. “Algorithm estimates the arrival time based on straight-line distance, but that’s not the case in reality……”. According to some riders, the system would even ask them to drive against the traffic on an one-way street, or to directly cross a road, because those were the “quickest routes” that algorithm came up with. There’re so many actual obstacles that algorithm never considers when it estimates the arrival time, such as the time to wait for the elevator, or the disruption by a bad weather.

an accident recorded by surveillance camera (left) riders waiting for the elevator (right)

The immediacy and convenience of the service enjoyed by the consumer come at the expense of the riders’ time and safety. The reduced delivery time is achieved through algorithmic designs and management policies which tie the couriers’ daily wages to their punctuality. Platforms incorporate reward and punishment schemes through algorithms and managerial policies, which reward riders’ timeliness and punish their lateness. Commission reduction and fines inflicted by the platform or third-party subcontractors operate as regimes of temporal control; one customer complaint about a delay could cost the rider the wage for a day and half. This “scalable management technique” contributes to the delivery workers’ combined experience of anxiety and temporal pressure as they have to cope with the “algorithmic discipline” during the rush hours in the city.₆

Subcontracted Station-Based Employment

Algorithm and platform economy are exploiting workers at the bottom. Companies like Uber and Lyft use similar legal strategies in the U.S. and other markets to avoid the responsibilities that would come with treating their drivers as employees. But Chinese delivery giants have even outsourced the responsibilities that could come with dealing directly with their couriers as contractors.₈

The system of subcontracting to stations the employment and the management of couriers is essential to Ele.me’s approach to providing efficient and reliable delivery. The stations employ between a dozen to over a hundred couriers, and each station can be understood as an organized team of couriers employed by one subcontracting company. A single company may operate multiple stations within a city or region.₇

Schema of crowdsourced and station-based labor ₇

The platforms signed up delivery drivers as contractors, rather than as full-time employees entitled to protections such as minimum-wage requirements, overtime rules, unemployment insurance, and injury compensation. While this exploitive contractor model is so prevalent that it has become the default choice for most delivery apps in the world, the third-party operations (subcontracted companies) in China have taken it to the next level. In order to reduce their legal obligations to the drivers, many of these small businesses required new employees to create accounts on recruitment websites specifically for gig workers, an act that automatically registers them as self-employed business owners under Chinese labor laws. To further absolve themselves of responsibility when accidents or injuries occurred in the workplace, they also created “ghost” companies — entities without real business operations — to divide up the work of issuing salaries and paying individual income taxes for the drivers. The murkier the arrangement, the more difficult it is for Chinese courts to determine the real employer of a food-delivery worker when lawsuits are filed.₈

“Food-delivery platforms are like giant ships attached to thousands of small boats,” an anonymous lawyer said, “Their business won’t be affected if any of these small boats sink. They can easily discard those attachments and move on when bad things happen.”₈

This September, in response to these accusations, Meituan and Ele.me promised to change their ways. In a social media post, Meituan, which employs millions of gig-economy workers in China, announced that it had distributed a notice informing over 1,100 food-delivery partners (the companies that manage a large portion of the couriers that do the actual deliveries) that they were prohibited from signing couriers up as independent businesses “through deceptive or coercive means.” To completely eradicate this shady practice, Meituan said that it had held video conferences to explain the order and set up a special hotline for delivery drivers who had been wrongly registered as self-employed people to correct their status. Alibaba-owned Ele.me also released a similar statement at the same time, vowing to follow Meituan’s suit in banning the controversial practice and treating its couriers with “more care and protection.”

This year, Ele.me UI design team improved the rider location tracking page in the app.

Full Tracking
Rider’s real-time location and estimated arrival time are presented. You are also able to contact the deliverer and the restaurant with online chat or phone calls.

“On Time PLUS” Service
You can receive a compensation if your food falls to arrive on time.

Animations of Extreme Weather
Consumers can better understand the difficulties of the riders who are driving in terrible weather and stop pushing them or making complaints.

Regulation on restaurants:

High Commission Fee and De-Platform Trend

The trend of “de-platform” of takeaway occured due to the widespread commissions in the takeaway industry (10%–20%) and the long time to return the commission, as well as the problems of higher merchant promotion fees and longer service feedback time, etc. Many merchants found that relying solely on the platform to operate, the profit margin is low. Therefore, some merchants use multiple channels. For example, in May 2018, HEYTEA opened HEYTEA GO takeaway, and accumulated 24 million members in the past 2 years, users can use WeChat applet to order. More typical companies such as KFC’s timely delivery, McDonald’s McLeod delivery, etc. Consumers can order food on their official website, and the merchants deliver independently. This way gets rid of the shackles of the platform and makes the transaction de-platform.₉

“This saves us the commission charged by delivery platforms, which can be used to benefit the customers. We have signed up more than two million members. We outsource the delivery service to [all-goods delivery firm] Dada (provided by JD.com)”
Liu Jingjing, founder of congee chain Porridge Jiahe, which has more than 100 outlets across China. It had upgraded its own delivery app, which allows staff to interact directly with customers.₁₀

References

Liu, Chen, and Jiaxi Chen. “Consuming Takeaway Food: Convenience, Waste and Chinese Young People’s Urban Lifestyle.” Journal of Consumer Culture 21, no. 4 (November 2021): 848–66. https://doi.org/10.1177/1469540519882487.
Richard Gawlas. “The Future of Restaurants: Ghost Kitchens and Ghost Restaurants.” TouchBistro Blog. https://www.touchbistro.com/blog/could-ghost-restaurants-be-the-way-of-the-future/.
Rachel Sugar. “Why Ghost Kitchens are not the future of restaurants.” Grub Street. February 18, 2021. https://www.grubstreet.com/2021/02/why-ghost-kitchens-are-not-the-future-of-restaurants.html.
Zixu Wang. “In China, delivery workers struggle against a rigged system.” SupChina. April 20, 2021. https://supchina.com/2021/04/20/in-china-delivery-workers-struggle-against-a-rigged-system/.
Yan Zhang, Yunhuai Liu, Genjian Li, Yi Ding, Ning Chen, Hao Zhang, Tian He, and Desheng Zhang. “Route Prediction for Instant Delivery.” Proceedings of the ACM on Interactive, Mobile, Wearable and Ubiquitous Technologies. Volume 3, Issue 3. (September 2019) No. 124, pp 1–25. https://doi.org/10.1145/3351282.
Chen, Julie Yujie, and Ping Sun. “Temporal Arbitrage, Fragmented Rush, and Opportunistic Behaviors: The Labor Politics of Time in the Platform Economy.” New Media & Society 22, no. 9 (September 2020): 1561–79. https://doi.org/10.1177/1461444820913567.
Chuxuan Liu, and Eli Friedman. “Resistance under the Radar: Organization of Work and Collective Action in China’s Food Delivery Industry.” The China Journal (July 2021) Volume 86: 68-89. https://www.journals.uchicago.edu/doi/full/10.1086/714292.
Jiayun Feng. “Food delivery giants Ele.me and Meituan promise to stop treating delivery workers like disposable garbage. Sort of.” SupChina. September 22, 2021. https://supchina.com/2021/09/22/ele-me-and-meituan-fine-well-stop-treating-delivery-workers-like-disposable-garbage-sort-of/.
Linfeng Li. “Research on the Operation of the Takeaway Platform During COVID-19 Based on the Theory of Two-Sided Market.” Proceedings of the 4th International Conference on Economic Management and Green Development. pp26-36. August 14, 2021. https://doi.org/10.1007/978-981-16-5359-9_4.
Elaine Yau. “Chinese food delivery apps face a backlash from restaurants – tired of the high commission they charge, some build their own digital platforms for takeaway orders.” South China Morning Post. June 12, 2020. https://www.scmp.com/lifestyle/food-drink/article/3088427/chinese-food-delivery-apps-face-backlash-restaurants-tired.

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