Traditional Chinese food outlets jump on the delivery bandwagon

Times are changing and so are the traditional food joints in Shanghai. The long wait that used to be a norm at most of these outlets was seen as an impediment in retaining and attracting new customers. But the emergence of smartphones and high-tech has enabled several of them to reach out to more young customers with home delivery services.

Shanghai Dafugui Restaurant, a 137-year-old food joint that specializes in Anhui cuisine was one of the first old brands that has embraced technology and delivery services in a big way.

"We will make a slew of adjustments this year like expanding production capacity, phasing out snacks not suitable for deliveries and providing food throughout the day to attract more consumers," said Tian Shenglei, head of operations at Dafugui.

In April 2017, the restaurant started trial runs with Ele.me, a leading third-party food delivery company. In just a month, Dafugui expanded home delivery services to all its outlets.

"Most of our customers used to be middle-aged and elderly people in Shanghai. There was hardly any interest from the younger generation," said Tian.

"But that has changed with the advent of online orders and food deliveries and now we have lots of younger customers," Tian added.

Ele.me started to team up with old brands in July 2015 when it started delivery services with 12 brands under the Judehuatian Holdings Group, which owns dozens of old restaurant brands in Beijing. The cooperation opened new sales channels for old brands and more options for young consumers.

In Shanghai, time-honored brands including Dafugui, bakery and restaurant chain Xing Hua Lou, Western-style pastry chain Kaisiling, and Xiaoshaoxing Restaurant, have also launched food delivery services, said Wang Yanan, head of Ele.me in Shanghai.

Xing Hua Lou started delivery services for afternoon tea snacks to office workers from some outlets this month. The brand is looking to boost sales after the service was rolled out across all of its 120 branches in Shanghai, according to a report in Xinmin Evening News report.

Famous for its tender boiled chicken, Xiaoshaoxing Restaurant's Tianlin and Huijin branches are now earning 30 percent of their revenue from delivery services, said Qi Zhongjia, head of the two Xiaoshaoxing branches.

The two units receive between 3,000 and 4,000 online orders every month in autumn, and betwe en 5,000 and 6,000 delivery requests per month in summer, said Qi.

"With data collected through Ele.me, we can analyze consumption trends in a particular area, which can help our clients make adjustments," said Zhang Jingyan, an executive with Ele.me's public relations division.

Tian Shenglei, head of operations for Dafugui, said the data would help in offering better services.

"At first we thought the more choices we offer, the more attractive we are to our consumers. But data from Ele.me showed that multiple choices led to lower sales as consumers took too much time to make their choices," said Tian.

Dafugui cut their categories from 120 to 40, canceled items unsuitable for delivery such as noodles, and increased more quality and temperature guaranteed rice food products.

The delivery service has increased Dafugui's average sales by more than 10 percent. Nearly 36 million yuan ($5.3 million) of revenue was generated from delivery services in 2018, up 178 percent year-on-year. The company also increased its physical outlets from 26 to 34 last year.

"We are looking to make deliveries account for up to 20 percent of our total revenue," said Tian.