Yum China seeking delivery deal
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Fast-food giant Yum China Holdings is looking at buying food-delivery services firm Daojia.com.
Discussions are at an early stage, but a deal could be worth up to US$200 million, as reported.
Established in 2010, Daojia.com focusses on online food orders and delivery services targeting the middle class urbanites in 10 Chinese cities. With a 3000-strong logistics team, it works with more than 6000 restaurants.
Food-delivery apps are becoming more popular in China with services being offered by Baidu Inc’s Waimai, Alibaba Group Holding’s Meituan and Tencent Holdings’ Ele.me.
China’s second-largest eCommerce fim JD.com and Macquarie Capital were investors in a $50 million round of fundraising by Daojia two years ago.
Yum China was spun off from US-based fast Yum Brands Inc 12 months ago. The company’s brands include KFC and Pizza Hut.
CEO Micky Pant says that while only 10 per cent of the company’s sales are delivered, deliveries are growing at double digits and will be an important driver of growth.
Yum China secured a $460 million investment from Primavera Capital and Alibaba affiliate Ant Financial before its spin-off. Yum China already is the biggest user of Ant’s Alipay mobile payments service. The restaurant company is also investing in its mobile ordering system and loyalty programs.
Questions & Answers
Q.What is the primary focus of Daojia.com's business model?
What is the primary focus of Daojia.com's business model?
Daojia.com primarily focuses on online food orders and delivery services. It specifically targets middle-class urbanites across 10 cities in China, working with over 6000 restaurants.
Q.Who are some of the existing investors in Daojia.com?
Who are some of the existing investors in Daojia.com?
China’s second-largest eCommerce firm JD.com and Macquarie Capital were investors in Daojia.com. They participated in a $50 million fundraising round two years ago.
Q.What is the CEO's perspective on the importance of food deliveries for Yum China?
What is the CEO's perspective on the importance of food deliveries for Yum China?
CEO Micky Pant views deliveries as a significant driver of growth, even though they currently account for only 10% of sales. He notes that deliveries are experiencing double-digit growth.
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