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US food apps take aim at bigger share of pie

Delivery services focus on expanding reach following Asian cuisine craze

By BELINDA ROBINSON in New York | China Daily | Updated: 2024-05-10 09:40
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The largest food delivery apps aiming at Chinese-speaking customers are positioning themselves to capture a broader slice of the US and worldwide markets as the Asian population grows.

Several years ago, food delivery apps such as Fantuan, Chowbus and HungryPanda were created to help customers who are more comfortable ordering in Chinese. Today, the apps have millions of users.

"With the US market offering huge potential, our focus remains on expanding our reach and penetration even further," Crystal Li, public relations manager at Fantuan, said.

"Fantuan has over 3.6 million users in four countries: the US, Canada, Australia and the United Kingdom...including immigrants, international students, local Asians (for example, American-born Chinese or Canadian-born Chinese), tourists, and whoever enjoys authentic Asian cuisine."

There are about 120,000 Asian restaurants in the United States, and nearly four in 10 offer Chinese food, the Pew Research Center found.

About 45 percent of the restaurants are located in five states where there is a significant Asian population: California, New Jersey, New York, Texas and Washington, Pew found.

Asian restaurants were hard hit during the COVID-19 pandemic amid anti-Asian sentiments in the US. In 2020, Asian restaurants lost $7.4 billion in revenue, according to a 2023 study by researchers from Boston College, the University of Michigan and Microsoft Research.

As businesses and restaurants in the US and also across North America attempt to claw back customers after the pandemic, many of the food delivery apps are increasingly being used by restaurants in cities such as Houston, Minneapolis and San Jose, The New York Times reported.

"They (the customers) seek comfort in the flavors of their hometowns, even while far from home," Li told China Daily. "Unlike mainstream apps, our platform is finely tuned to their preferences, offering authentic Asian selections that cannot be found on those apps and also Chinese language support."

Amid a venture capital-backed push for growth, Fantuan, based in Vancouver, closed a $40 million Series C funding round in December. It was done specifically to get into the Asian food delivery market and provide services for its global customers.

Meanwhile, UK-based Hungry-Panda has raised $220 million in capital since 2019.

Huge size

There are about 40 million Asians in the countries where Fantuan operates, with a market size of more than $36 billion.

With an estimated 2.38 million Chinese immigrants in the US, the population has grown rapidly from 1.8 million in 2010, according to data from the US Census Bureau and American Community Surveys.

"The Asian (population is) certainly increasing in size," Richard D.Alba, a US sociologist, told China Daily. He is also a distinguished professor emeritus at the City University of New York and at the sociology department at the State University of New York, Albany.

Additionally, the largest number of overseas students studying at US universities — 300,000 — was from China as of 2022, according to US State Department figures.

To cater to this demographic further, the apps are making key moves to position themselves to not only tap into the Asian food market but also generic US restaurants in the future.

In January, Fantuan acquired Chowbus' delivery business, a move that "will solidify Fantuan's leading position in the US Asian delivery market by bolstering our market share", Li said.

Fantuan is also offering online grocery delivery and errands services in a few major cities, the company said.

Meanwhile, Chowbus, which offers delivery services in more than 20 cities in the country, ventured into restaurant management software and has 1,000 restaurants as clients. Since 2022, it has raised $40 million.

Linxin Wen, CEO and co-founder of Chowbus, said in a statement that the company's main goal was to assist North American restaurants, "especially those owned by newcomers to the country, who generally need help with technology and marketing".

Li said another key reason for the acquisition of Chowbus was to "collaborate with even more mom-and-pop restaurants and businesses and provide a more comprehensive back-of-house solution for merchants".

It wants to be like an "overseas Meituan", Li said.

Across the pond, HungryPanda is the largest overseas Asian food delivery platform; it works with 60,000 merchants and serves more than 3.5 million registered users worldwide.

HungryPanda operates in more than 80 cities in 10 countries, including Australia, France, Japan and Singapore, with room to grow.

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