March 1, 2022
BEIJING (Reuters) – Chinese food delivery giant Meituan said on Tuesday it would cut commissions for traders on its platform, including limit commissions for about a million small and medium-sized traders facing operational difficulties, by 5% this year.
It will also cut half of the commissions, limiting one yuan per order, to catering providers in areas affected by the pandemic, Maituan said, adding that it aims to achieve full nationwide transparency of commission levies this year.
Last month, Chinese regulators released recommendations for online food delivery platforms to reduce service fees to help reduce operating costs for catering businesses to promote faster recovery after a pandemic in the services sector.
The proposed policy wiped out as much as $ 26 billion from the market capitalization of Meituan, the dominant food delivery platform in China, on the day of release.
The market overreacted to the government’s instructions because the policy was not aimed at the platform’s economy, the Chinese state-owned newspaper Economic Daily said in a comment last week.
Meituan currently charges about 12% commission for its food delivery activities, which analysts estimate is more than 50% of its total revenue.
Meituan is expected to experience short-term operating pressure as the profit margin of its food delivery business is already small, according to a research report released by SPDB International last month.
Other major food delivery platforms in China include Ele.me, owned by Aliababa.
(Report by Inzhi Yang and Brenda Guo, edited by Louise Havens)
Chinese Meituan lowers commissions in response to regulatory guidance
Source link Chinese Meituan lowers commissions in response to regulatory guidance