Meituan, a Chinese food delivery giant, announced that it would reduce commissions for merchants on its platform, Reuters reported on March 1. This new pricing policy includes 5% capping fees for over a million small and medium-sized businesses experiencing operating challenges this year.
In response to the Chinese regime’s call to help small and medium-sized catering merchants severely affected by the epidemic and operating difficulties to improve their profit-generating capabilities, Meituan has launched a series of measures to reduce costs and increase sales.
In terms of cost reduction, from March to December this year, for small and medium-sized merchants in high-risk areas in the epidemic, China’s dominant food delivery platform would cut half of the commissions, capping at $0.16 per order.
According to Reuters, Meituan charges merchants about 12% commissions for food delivery business, which consists of over 50% of the company’s total revenue.
Meituan also promised to achieve nationwide coverage of rate transparency by 2022. Meituan said that in 2021, Meituan Takeaway implemented a pilot rate transparency program where technical service fees and performance service fees are calculated separately. The current rate of transparency has covered 70% of merchants nationwide. In 2022, Meituan strives to achieve national coverage of rate transparency. In addition, for small and medium-sized merchants who are still in the process of promoting rate transparency, Meituan said they would give targeted subsidies according to the operating conditions and difficulties of the merchants.
Other merchants in difficulty who have completed the transparency of the fee rate will be evaluated based on the operating conditions and the degree of difficulty, and the technical service fee will be capped at 5%. It is expected that over one million merchants will benefit from this assistance.
Regarding revenue growth, Meituan will provide free “takeaway butler service” for disadvantaged merchants with insufficient online operation capabilities and takeaway order equipment such as cloud printers and Chuanbaobao to help merchants open source increase revenue.