Merchants are accusing food delivery startup Ele.me of forcing to deduct RMB 3 per order for promotion fee for a bid ranking, Tencent News is reporting.
When food & beverage businesses and Ele.me cooperate, Ele.me deducts 6% of every single order. Adding the RMB 3 to original 6% deduction, it will become money-losing deals for businesses.
โAfter verification, the problem was about Alipayโs promotion. Our local market managers have put business owner online for the increase his personal performance without confirming the business ownerโs decision. With this feedback, we have arranged people to communicate with the involved merchants to communicate and pay for the corresponding losses,โ Ele.meโs spokesperson told TechNode.
According to DCCIโs 2017 food delivery startup report, Meituan Waimai was dominating the market with 53.9% market share, followed by Ele.me (29.8%) and Baidu Waimai (13.7%). Despite Ele.meโs merger with Baidu, Meituan still ranks the first in the food takeaway turf war.
According to media reports, the RMB 3 promotion fee is a โpromotional biddingโ activity for Ele.me. It is used to increase the rankings of merchants on the list of Ele.me app, thereby increasing user traffic and bringing more customers. Ordinary merchantsโ rankings are based on several factors such as the merchantโs popularity and sales volume. After paying for the promotion fee, the merchantโs ranking will be higher and ensure more exposure.
โDeducting the promotion fee is against the ethics of the industry. The ultimate victim of the promotion fee is still the consumer. The merchant will also lose trust in the platform in such events. The reputation of the company will be damaged and will lose both customers and merchants,โ Chen Liteng, an assistant analyst with the O2O Department of Life Services at the China Electronic Commerce Research Center said
