CRI听力:China's O2O Food Delivery is Booming

The online-to-offline or O2O catering sector is now viewed as a multi-billion U.S. dollar industry.

Beijing-based consulting firm Sootoo estimates that more than 260 million users will order about 23 billion U.S. dollars' worth of meals online this year, with 80 percent of that from mobile phones.

"I like to use my phone to order meals from home. I use Baidu Waimai, it's very convenient,"

"I usually use my phone to order. It's easy. I use several apps - Wechat, Tao Diandian…"

China's tech giants Baidu, Alibaba and Tencent, commonly known as the BAT, are all promoting their on-demand food delivery services.

An owner of a start-up O2O firm said this has made the market competition fierce.

"BAT have their own O2O platforms that dominate the market. Massive sales volume is the key to high profits for platforms like this. Restaurants prefer to use platform delivery services rather than set up their own operations."

Tech giants are putting ever growing pressure on companies that have been in the home delivery market for a decade or more.

Yvonne Sun is the director of Sherpa, an O2O catering company based in Shanghai.

Sherpa has been managing to target higher-end customers including expats and white-collar workers.

However Yvonne Sun said its market niche is becoming increasingly difficult to operate in.

"Delivery takes up the biggest amount of our operating costs. We can break even, but it's not easy in this business. It's very labor intensive, and profit margins are increasingly thin. We're being hit by increasing costs of the courier staff, and they're getting harder to find".

Despite rising competition and lowering profit margins, the O2O catering sector continues to attract venture capital.

Restaurant guidance portal Dianping.com has gained six rounds of fundraising, totaling about 9.6 billion US dollars.

Beijing-based group purchasing website Meituan is now worth seven billion U.S. dollars after its latest round of financing.