1 Risks perceived by consumer

In recent years, Online to offline (O2O) e-commerce mode has been developing
rapidly, and takeout food in O2O mode emerged under this background. Food
delivery and takeout was once considered a luxury, but they are now recognized as a
necessity (Restaurant Technologies 2018). With the development of takeout food, the
competition among takeout food platforms is increasingly intense. How to reduce the
risks perceived by consumers became a matter of life and death for takeout food
platforms. The risks perceived by consumers and strategies for risk reduction of
Meituan will be analyzed in the following. Meituan, a company focused on providing
lifestyle O2O services, merged with Dianping, the biggest restaurant review App,
forming the biggest group buying company in 2015. And it currently provides food
delivery, ride-hailing, travel booking, movie reviews, restaurant reviews, and other
various lifestyle services related to O2O (Chen 2018).
• Functional risk
Food safety problems have always been the biggest problem for takeout food
platforms and the top concern for consumers. Due to the O2O takeout food mode,
there are several parts which cannot be seen by consumers, such as restaurant
sanitation, cooking and delivery. While it is these elements that make the consumers
worry about whether the takeout food is safe. As was reported in 2016, competitive
ranking was adopted by Meituan, which means that an unlicensed restaurant can be on
the top list by paying money. There is no doubt that this kind of behaviour greatly
increased consumers’ concern about takeout food safety.
• Temporal risk
Long delivery time and frequent timeout are another common gripe about Meituan’ s
takeout food service. Under this circumstance, it’s advisable for a person in a rush to
have a meal in fast food restaurant instead of waiting for takeout food. And a person
may hesitate to use Meituan again after overtime for several times.
2 Strategies currently in place to minimize each risk
When it comes to reducing consumers’ Functional risk, expanding brand awareness

1
always works, and this is also the case for Meituan. In order to expand its brand
awareness, Meituan has made great efforts to improve market image and word-of-
mouth. And a lot of money has been taken to advertise, attract the new customers, and
expand the market share.
In order to reduce consumers’ concern about takeout food safety, Meituan put
eliminating unlicensed shops onto its priority list. And it has called on the shops
located in its platform to upload their pictures of kitchen and restaurant sanitation.
This action has certainly decreased consumers’ worry to some extent. The other main
factor influencing takeout food safety is delivery. Meituan took the lead in the use of
takeout food seal. After the meal is delivered by the merchant, the uniform seal is
used to ensure that the food is always unopened during the delivery process so as to
avoid damage in the delivery process.
Timeout payment is regarded as a good way to reduce consumers’ temporal risk and
their complaints. With the development of takeout food industry, user experience will
increasingly become the core measure of success or failure. Timeout payment as a
guarantee service, is designed to improve user experience based on the actual needs of
consumers. On one hand, timeout payment service can promote consumers' dining
experience; on the other hand, it can also supervise merchants and delivery staff to
enhance their service ability and delivery efficiency. Timeout payment service sets a
new benchmark for O2O takeout food industry.
With the development of delivery service, Meituan has continued to explore new
service offerings. It started ride-hailing operations in Shanghai and Nanjing in early
2018 and entered the bike-sharing space by acquiring Chinese sector giant Mobike in
April 2018. With its delivery fleet running across more than 2,800 cities and counties
in China, Meituan offers customers a wide range of services ranging from food
delivery and hospitality booking to movie ticket selling (ejinsight 2019). As is said by
the spokesman, in any business they get into, they may start small; but they will go
big if it works (pixr8 2019). All the crossover business can expand the size and
comprehensive strength of the company. At the same time, consumers’ perceived risks

2
are reduced gradually.
3 Additional strategies
• Food quality guarantee or any post-sales service
According to market conditions, other guarantees should be provided, such as food
quality guarantee. If there is hair or other such things, consumers can get some
compensation. Even though this will increase costs, it’s a very effective measure to
strengthen competitive power in the market. Besides food quality guarantee, good
post-sales service is an important factor of corporate image, which Meituan should
pay more attention to, as good corporate image can greatly reduce risks perceived by
consumers.
• Customized membership service
The O2O takeout food industry is entering a stable period. When the user scale tends
to be stable, the market will be fiercely competitive. The approach to gaining
competitive advantages is to build stable customer groups. Providing customized
membership service before any other competitor can not only stabilize old customers,
but also attract new customers from other platforms. Based on data accumulation,
users' preferences can be speculated. Recommending and providing what they want
can directly increase the loyalty of them and decrease the loss.
• Errands service
Most of the men who often order online must have been under this situation in which
the shop where there is your favoured food does not offer the fruits you like, but the
fruits are served in your downstairs store. What is expressed in this example is that
many people often need both takeout food service and easy errands service, such as
buying some drinks or fruits near the destination. If this easy errand service can get
paid, there is a possibility that the takeout platform can provide takeout and errands
service at the same time. Of course, the additional errands service is conditional.
Delivery time and distance must be taken into consideration. If this strategy can be
realized, the consumers don’t have to worry about whether the delivery staff can help
to buy some drinks or other things.

3
References
Chen, T 2018, Meituan – China’s biggest lifestyle O2O service provider, Walk the
Chat, retrieved in 30 July 2019, <https://walkthechat.com/meituan-chinas-biggest-
lifestyle-o2o-service-provider/>.

Ejinsight 2019, China’s food delivery giant Meituan exploring gaming business,
Ejinsight, retrieved in 2 August 2019, <http://www.ejinsight.com/20190115-china-s-
food-delivery-giant-meituan-exploring-gaming-business/>.

Pixr8 2017, Now Its Tencent Backed ‘Super-app’ Vs. Tencents’ own Wechat, Pixr8,
retrieved in 2 August 2019, <https://pixr8.com/china/now-its-tencent-backed-super-
app-vs-tencents-own-wechat/>.

Restaurant Business Online 2018, FOOD-SAFETY STRATEGIES FOR SAFER

DELIVERY AND TAKEOUT, Restaurant Business Online, retrieved in 3 August 2019,
<https://www.restaurantbusinessonline.com/operations/food-safety-strategies-safer-
delivery-takeout>.