()

UNDERGRDUATE GRDUATION PROJECT:

DISSERTATION
(GRADUATE YEAR 2015 )

Project Title What is the competitive advantages of

ele.me compared to other O2O platforms for takeout in
Chinese restaurant industry

Chinese

College

Sino-British College

English

Chinese

Major

Business management

English

Lai YingZhi

Chinese

Student Name

EMMA

English

1124040111

USST

Student ID No.

130198514

UK

Benjamin Liam Peters

Supervisor 1

Supervisors

Benjamin Liam Peters

Supervisor 2

2014 9 2015 6

Chinese

Start and End

From September of 2014 to June of 2015

English

Abstract
The dissertation will present the competitive advantages of Ele.me
compared to other O2O platforms in the catering industry through the
analysis on its management style and marketing pattern. For the data
collection, I exploited both primary and secondary sources. I interviewed

KangJia who is the chief strategy officer of Ele.me by wechat. Besides, i

design the questionnaire sending to potential customers such as students
and business people. Eighty of them are collected to analyze the data. In
terms of secondary sources, articles reported by official news agency are
used for addition information. Based on the analysis of three hypotheses
which include promotion, customer behavior and marketing, these factors
all contribute to the success of Ele.me becoming a market leader.

1. Introduction

1.1 Background
It is quiet common that students get takeout outside the dormitory when
there is meal time. In fact, the phenomenon appears not only around
universities, but also business buildings. There is stronger competition in
O2O (online to offline) platforms because of the change of peoples
living habits gradually. Among all the takeout organizations, Ele.me, the
Chinese food and beverage online takeaway platform headquartered in
Shanghai, is regarded as one of the market leaders. It is a website acting
as a communication platform between restaurants and customers.
Besides, Ele.me has got investments from top enterprises such as Tencent
and plans to promote the quantization of catering industry. Established
seven years ago, Ele.me was jointly founded by several students from
Shanghai Jiaotong University. The reason why they generated the idea of
setting up take-out organization seems to be accidental. On someday,
Zhang Xuhao (CEO) and his roommates complained about no food at
midnight, they thought about offering take-out service by themselves.

Since then, they three have taken out food to other students in Jiaotong
University. Their take-out scope expands from Jiaotong University to
Shanghai, from Shanghai to the whole country. After developing and
financing continually, Ele.me has been one of the largest O2O platforms
in China. According to the Beijing Times (2015) , on January 28th this
year, it is announced that $350 million was invested into Ele.me by
famous companies including Tencent, JD, Sequoia Capital and Dianping.
Since established, this O2O (online to offline commerce) takeaway
platform has seen a significant growth in business. In five years, it has
become one of the largest online takeaway platforms in China, covering
more than 200,000 restaurants and 20 million users in 250 cities across
the country. They received more than a hundred million orders last year ,
hitting about two million orders on peak days. Ele.me has taken 75
percent of the domestic market for takeaway service apps. The online
takeaway business is remarkable in China for its potential profit, strong
competitiveness and rapid growth. The market value for the online
takeaway business in China has reached 120 billion yuan. The CEO of
Ele.me, Zhang Xuhao said the company had major tasks ahead which
include improving takeaway services for schools, expanding their
business in the residential areas of white collar workers, and establishing
self-delivery service centers (ifeng.com, 2014). The way of using Ele.me
is similar to taxi hailing apps like Didi and Uber. Customers register a
personal account through their mobile phone number either on the
website or the mobile app before the delivery service is provided. Then,
the payment can be made online or in person.

1.2 Objective
The fundamental purpose of the dissertation is to analyze its competitive
advantages compared to other O2O platforms. The management mode of
Ele.me as well as the operation pattern will be focused on. Although the
relationship between marketing strategy and customer behavior has been
studied by a number of scholars (Chiu et al., 2006), there are not enough
analysis in a particular market with focused customer group. The
dissertation will show the change of Elemes marketing strategy aiming
from students to white-collar workers. According to collected data from
different sources including interviews and questionaries, deep study of
takeaway service in current market will be provided. Besides, both
advantages and disadvantages of different kinds of data are presented.
Then recommendations are put forward to make Ele.me be the
exclusive market leader indeed.

2. Literature Review

This chapter will offer the theoretical literature which is closely related to
the topic of this dissertation. Firstly, the literature related to the concept of
online to offline will be reviewed. Then the literature will focus on
different factors affecting consumer behavior. After that, marketing mix
will also be reviewed. Present information of the literature review of this
dissertation,

linked

with

both

methodological

and

theoretical

contributions as well as findings from Ele.me is covered in this section.

2.1 Online to offline

Online to Offline which is an innovative commerce model steps into
peoples horizon in recent years. It refers to a mechanism of combine the
Online Digital platform to the Offline World by the integration of
internet-connected devices. Besides Consumers who are driven offline
based on online information such as e-coupons, they are also
stimulated online through call for actions in the offline environment
including mobile payment systems and QR codes (TMO, 2013).
The growth of mobile internet connectivity, speed and internet-connected
devices like Smart Phones and Netbooks enables O2O Commerce to
thrive and closing the loop. The term O2O was first introduced by
Alex Rampell who is the founder and CEO of TrialPay. It is published on
a 2010 TechCrunch article that The key to O2O is finding consumers
online and stimulating them to consume in real world. It is a association
of foot traffic generator payment model for dealers which creates offline
consuming (Li, 2014). The various elements of online payment helps
O2O be more powerful. Takeaway service in the catering industry is a
typical kind of O2O mode. Through it, large enterprises such as Baidu
and Alibaba could leverage existing mobile APPs and websites to attract
people to traditional brick-and-mortar stores. The infographic 1 in
Appendix clearly explain the term and the opportunity in China.

2.1 Consumer behaviour

Actually, a large number of scholars and researchers have studied
consumer behaviour which is one of the massively topics. It is commonly
believed that analyzing consumer behaviour plays a direct impact on the

overall performance of the businesses (Kotler and Keller, 2012). Besides,

it has become vital in particular due to fierce competition in worldwide
(Lancaster et al, 2002). The main aim is to study the way how the
individual or groups searching for, purchasing and disposing the goods
and factors like price and their previous experience where customers base
buying decisions (Kotler and Keller, 2012).
There are five main approaches outlined by Bary (2008) to learn
consumer behavior. Take three of them as an example. The first approach
is called economic man approach. It assumes that all consumer are
rational perfectly and explicitly know all marketing information.
However, Bary(2008) regarded this approach as unrealistic because it is
impossible for consumers to be in such situation. Besides, behaviorist
approach which is contrast to the psychodynamic approach suggests that
external events stimulate personal behavior. Furthermore, the black box
model that indicates the reciprocity of customer habits, decision process
and external stimulations develops from behaviorism (Sandhusen, 2000).
It concentrates on the link between stimulations led by the market or
environment and customers responses instead of just consumer decision
process. Nevertheless, the weakness of the black box model is similar to
that in the economic man approach that consumer cannot be completely
rational and may not realize the potential problems in the decisionmaking process (Khosla,2010).
Another approach is humanistic which is relatively reliable and quite
recent approach. It puts emphasis on particular aspects of peoples
behavior instead of stating common situations (Shanteau & Stewart,
1992). The approach is popular among contemporary scholars though it
is lack of enough empirical proof to support verdicts (Bary, 2008).

In the past hundreds of years, economists like John von Neumann began
to study the basis of customer decision-making process (Richarme, 2005).
Schiffman et al. (2007) defined consumer behavior that consumers
conduct themselves in finding, buying, evaluating, and disposing of what
they expect to satisfy their needs.
Several models are built to analyze consumer behavior. One of such
studies conducted by Acebron et al (2000) applied structural equation
model so as to confirm the link between peoples habits and previous
experience on their purchasing decision. They drew a conclusion that
personal habits and previous experience of customers directly influence
peoples decision. In addition, the appearance of the goods is also of great
importance. It is recommended that the appearance of goods ought to
incessantly be improved so that sales could be encouraged.
It is found that customer purchasing behaviour is the outcome of what
satisfy their wants and needs. It seems to be quite concise while these
demands could be various contingent on some individual factors like
habits, characters and regions. Besides, some external factors that are
broad and out of control also have a great impact. Many researchers have
accomplished studies on identifying and analyzing these variables which
have influence on the customer behaviour. In consequence of these
researches, many factors have been confirmed which are ranged into
various categories and kinds in different ways. For example, these factors
are assorted into external and internal by Wiedermann et al (2007). Winer
(2009) classified them into personal, psychological and social ones.
Overall, these factors are similar in aim and scope though they are
divided into several groups by different researchers (Rao, 2007).

There is a wide variety of factors which have an impact on customer

decision-making. Hoyer et al. (2012) classified them into four main broad
types including situational, personal, social and cultural factors. Firstly,
situation which is related with decoration, environment and geographic
(Hoyer et al., 2012). Merchants are able to gain profit if they consider
situational factors properly. They would like to build such environment in
shops that could motivate potential consumers to buy products. For
example, putting some relaxing music, producing delicious smells and
building a romantic environment all attract people to come and order
more food. Besides, not only in catering industry, supermarkets often
place what will overdue soon towards the opposite end of stores in order
to facilitate movement of people around the store to buy them by the way.
Batra and Kazmi (2008) emphasize the provisional nature of situational
factors.
The next is personal factor which covers habits, taste preferences, and
economic condition. The affection of it on customer behavior is always
undertaken by businesses during market segmentation, targeting and
positioning practices by classifying individuals based on their personal
conditions, and developing goods and services which adapt these
situations in the most practical manner.
In addition, Hoyer et al. (2012) addressed that social factors have
influence customer decision-making as a consequence as mutual effects
of clairvoyant customers in different circumstances and standards. While
marketing goods and services because of the possibility of opinion
conductors to impact decision of other members in society, it seems to be
effective strategy that aiming members in society is regraded as opinion
conductor.

Lastly, Oxford Dictionaries(2015) defines culture as the habits, thoughts

and social behavior of people in society. Cultural factors are relative with
cross-cultural distinctions among customers on both local and global
scales. While developing and passing marketing information, it is
necessary for cross-cultural distinctions among customers to be
considered due to the trend of globalisation.
2.3 Marketing

In fact, there are potential influences of consumer behavior on marketing

strategies. It is worth attentive that customer decision-making is studied
as a part of the marketing.
One of the main notions in the field of marketing is marketing mix which
refers to 4Ps. Every distinct factor of marketing mix is adopted as an
instrument so that they could have an influence on customer behavior.
According to Meldrum and McDonald (2007), the significance of
marketing mix could be demonstrated in certain way that successful
marketing relies on consumers realizing that goods or services that are
available in swimmingly estimating that practitioners of the providing by
both property and price. Product, price, place and promotion make up
with major factors of marketing mix. Besides, it is expanded to contain
additional 3Ps which refer to people processes and physical evidence
(Kotler, 2012).

The first element of marketing mix is product. It is related to goods and

services which are provided to consumer to be bought. There are three
main levels of products which comprise core, actual and supporting ones.

For instance, core product that links to smart phones is demonstrated as

the potential to communicate with consumers in space. Actual product is
the second one which concerns specific brand and model of a smart
phone. However, expansive product is in relation to product insurance
and one-year guarantee connected with buying a smart phone. Price plays
an critically vital role in elements of marketing. East et al. (2013) present
that there are four major types of pricing strategies comprising economy,
skimming, penetration and premium strategies. Next element of
marketing mix is called place that touch upon point of distribution and
sales of goods and services. The emergence of online shopping to some
extent changes the character of place element of marketing mix.
Promotion element of marketing mix represents association of promotion
mix coordinating different factors of public relations, personal selling
advertisement and sales promotions to diverse extents (Kotler, 2012).
Processes stand for business procedures and policies that are concerned
with goods and services. For instance, synthesis of significant scope of
payment systems such as Alipay, MasterCard and PayPal in online
shopping steps is likely to influence positively on total sales through
offering payment convenience to consumers who prefer not to use cash.
Another element of marketing mix is people that primarily represents
acquirement and science of the labour in charge of consumer service
orientation of the business. In briefly, the value of people element and
offering individualized consumer services especially seems to be more
significant nowadays than ever before. The last one refers to physical
evidence dealing with visual concrete sides of a brand as well as its
goods. Take Tesco as an typical example. As a famous chain supermarket,

its physical evidence is involved with quality of shopping trolleys,

programming and excogitation of shelves as well as the whole store.
It is predicted that further aggrandizement of competition in worldwide
markets and more enhanced seek of businesses for extra foundation for
competitive advantages are likely to lead to the appearance of additional
Ps to praise the configuration of marketing mix in the future.

3. Research Methodology

3.1 Primary research

A series of research methods applied will be presented that ensure the
information to be reliable. I would like to use both qualitative and
quantitative research in order to collect an amount of valuable
information. These data comes from not only primary but also secondary
sources. Firstly, I have interviewed one of the executive manager Kang
Jia to get the primary data when building the business through wechat.
The reason why he is willing to accept my interview is one of his teachers
is the same as my friends in Jiaotong University. We mainly talked about
division and cooperation of different departments, the staff management
system and alliance business.
Interviewing seems to be practically a good chance to gain the real story
behind interviewees experiences. The aim of interviews is to collect
presentations of the life-world of participators in relation to explanation
of the intention of appearance (Kvale, 1983). There are several forms of
gather primary data in terms of interview including face-to face, internet,
and telephone. Each method has its merits and and drawbacks. I chose to

apply applied wechat interview on Kang Jia Interviews are particularly

useful for getting the story behind a participants experiences. I can
pursue in-depth information around Ele.me. Interviews may be useful as
follow-up to certain respondents to questionnaires. such as to further
investigate their responses. (McNamara, 1999)
Compared to other forms of interview such as face to face, telephone
interview Due to the asynchronous communication of place, one of the
advantages of wechat interviewing is the extended access to participants,
compared to face-to-face interviews (COOMBER, 1997). Although I can
interview people such as Kangjia that are not easy to access, one of the
disadvantages of asynchronous communication of place by Wechat is the
absence of social cues. I am unable to see his real emotion when he is
talking about certain question.
The next advantage of asynchronous communication of place is saving
costs and time, because I does not have to travel to him. On the other
hand, when comparing the different interview techniques concerning the
amount of time the interview itself actually costs, we chat is less
favoured. To have a good and in-depth interview by wechat takes about
double the time of a face-to face interview (MARKHAM, 2004).
Meanwhile the concentration between us can decrease, with negative
consequences for the quality of the interview. The advantages of several
sessions are that both the interviewer and the interviewee stay
concentrated, and that the interviewer has had the time to overlook the
other interviews and come up with additional questions.
Another primary source comes from questionnaires for focused people.
The questions designed are around consumers behavior and to judge

whether Ele.mes marketing is successful. There are both advantages and

disadvantages of questionnaires. On one hand, it is practical and large
amounts of information can be collected from a large number of people in
a short period of time and in a relatively cost effective way. Besides, it
can be carried out by the researcher or by any number of people with
limited affect to its validity and reliability. Then the results of the
questionnaires can usually be quickly and easily quantified by either a
researcher or through the use of a software package. When data has been
quantified, it can be used to compare and contrast other research and may
be used to measure change.
On the other hand, it has many weaknesses. For example, it is argued to
be inadequate to understand some forms of information such as changes
of emotions. Phenomenologists state that quantitative research is simply
an artificial creation by the researcher, as it is asking only a limited
amount of information without explanation. Moreover, the respondent
may be forgetful or not thinking within the full context of the situation.
People may read differently into each question and therefore reply based
on their own interpretation of the question - i.e. what is 'good' to someone
may be 'poor' to someone else, therefore there is a level of subjectivity
that is not acknowledged. Besides, there is a level of researcher
imposition, meaning that when developing the questionnaire, the
researcher is making their own decisions and assumptions as to what is
and is not important. Therefore they may be missing something that is of
importance.
I have sent 120 questionnaires and received 80 until now. Results are
gathered and counted to analyze the situation deeply. Then both

qualitative and quantitative issues are focused on. Primary research helps
me to own a higher control over how the data is collected.

3.2 Secondary Source

The secondary data I have gathered includes various news reports and
commercial articles published by official agencies. Because Ele.me is a
kind of form of web site, I am not able to get a large amount of material
information. Both primary and secondary data contribute coequally to my
dissertation.

4. The Results & Analysis Chapter

4.1 Takeaway situation

Takeaway is conceptualized as foods or meals that are prepared and
purchased outside of the home, and ready for immediate consumption
either at the place of purchase or elsewhere. The analytic sample
comprised 50 households and 3 small estates in Shanghai. Takeaway food
is purchased more regularly by high-income householders and those with
higher levels of education. Residents of advantaged areas purchased
takeaway food more regularly, although area differences attenuated to the
null after adjustment for individual-level compositional factors. Number
of takeaway shops in the local food environment, and road distance to the
closest takeaway shop, were largely unrelated to the purchase of
takeaway food. I conclude that there is little evidence that takeaway food
purchasing in Shanghai is influenced by area-level socioeconomic
disadvantage or features of the takeaway food environment. Rather, it

seems that what matters most in terms of influencing the decision or

capacity of Brisbane residents to purchase takeaway food are the
socioeconomic characteristics of individuals and their households. The
findings of this and previous analyses of the data suggest that policy and
health promotion aimed at improving the diets of residents and reducing
dietary inequalities between socioeconomic groups should focus on
people more so than places.

4.2 Problems existing in O2O platform

However, there are still many problems existing. The popularity of
Ele.me is quite relevant with O2O overall situation. After years of
precipitation, restaurant O2O finally broke out in 2014, Ele.me is one of
the promising platforms. But for the entire catering, O2O still is a mess.
First of all, it is not standard. Restaurant against regulation has become a
greatly problem in food and beverage platform. Since its inception,
Meituan or Ele.me will never be out of regulatory blacklist, due to the
unlicensed restaurants. They have been ordered to investigate many times
by supervision department. In order to compete for the market to have
more business resources, most of the joining businesses only need to fill
out the information on either Ele.me or Meituan. There is no specific
audit procedure, coupled with inadequate supervision frequency. For
example, there is a typical case which CCTV reports about the operation
of black workshop in hangzhou by delivery platform.
The second one is the fierce competition. In the catering O2O market, in
addition to dianping.com and Meituan, more competitions focus on
delivery platforms. Alibaba launched taodiandian. Baidu launched Baidu

take-away, Tencent also invested and founded the zero line. The biggest
rival of Ele.me, of course, is Meituan delivery. Compared with other
major platforms, the main defect of Ele.me is finance. It's not easy to
develop the market without subsidies. Thats may be one of the reasons
for the frequent financing.
Last but not least, the brush list appears again. Almost the entire delivery
platforms in a certain subsidy policy develop the user's habits. For
merchants, subsidies will inevitably have to brush single behavior so that
his order quantity will increase. Then they can earn take-away platform of
the cost of subsidies. Ele.mes peak orders one day is 2 million. Although
there is a certain limit of brush behavior, Ele.me for businesses is only
one of the alternative delivery platforms. The brush list behavior is
difficult to be eradicated.
Catering O2O became a diamond of investor. Ele.me of course also
became extremely popular. However, the problems really exist. If these
problems cannot be solved effectively, prosperity of all above are based
on the bubble in the future.
Despite of the challenges ahead, Kangjia is confident about his business.
He said that although the takeaway service market only takes up 10
percent of the total food and beverage market, he expects this number to
increase to 30 percent in the future. As far as who will take on that 20
percent, it's still too early to tell.

4.3 Competitors
Ele.me has more than 80 delivery offices scattered across Beijing and
Shanghai, the two major cities for their business. In order to encourage
more users to join this food-ordering army, those who order food via
Ele.me have the opportunity to find meals listed at a lower cost than the
restaurant price. The figure 2 in appendix shows the market share of
Chinese takeaway platform in January this year. Ele.me is a market leader
then. However, it is not alone because Meituan is another online
takeaway platform which is leading the industry. Meituan has an average
of 1.5 million orders daily, according to a Caixin Magazine report. That's
right behind Ele.me. Their competition has grown so intense that, in
December 2014, there was a physical altercation between staff members
at the two companies.The challenges Ele.me needs to face also stem from
inside the company. Analysts said there are several issues Ele.me needs to
tackle in 2015, including the maintenance of service capability amid
accelerated business expansion, managing the huge expenditure for
serving both the student market and white collar market, and controlling
the quality of restaurants they cooperate with, according to Caixin
Magazine.

4.4 Financing from other famous enterprises

The investment is notable because Tencent, e-commerce company
JD.com, and restaurant review site Dianping.com are closely aligned.
Investing in Ele.me, which operates throughout China, can potentially
help all three businesses build their online-to-offline (O2O) strategies.
Tencent owns a 15 percent stake in JD.com and a 20 percent stake in
Dianping. Alibaba and Baidu, Tencents main rivals, already have

investments in food delivery services. Alibaba backs Meituan, while

Baidu holds a majority stake in Nuomi. Both Meituan and Nuomi are
group-buying sites that recently launched food delivery services.
In its announcement, Ele.me said it will continue to operate
independently. The company, which serves 250 cities, with 200,000
restaurants and 20 million users on its platform, said that in 2014 its total
order volume reached 110 million renminbi, with 75 percent of orders
made through its mobile apps. O2O is an important market for companies
like Tencent, Baidu, and Alibaba to tackle because it allows them to
leverage their existing network of websites and mobile apps to bring
users into traditional brick-and-mortar stores, therefore opening up more
ways to make money.
Alibabas O2O plays include affiliate Alipay, Chinas leading mobile
payment services company, as well as promotions that its various online
marketplaces run with brick-and-mortar retailers.Tencent can potentially
use Ele.me to power food delivery services on WeChat, Chinas top
messaging app. Several businesses, including Chengdu-based Call A
Chicken, already use WeChat to connect with customers. Adding food
delivery would add to the roster of services WeChat already offers in
China, including the ability to hail taxis from Didi Dache, another
Tencent investment.

4.5 Future direction of Ele.me

In terms of the future direction of Ele.me, one is to consolidate its
position in universities. The second one is to expand the white-collar

housing market. Then it is to set up its own logistics. Their official data is
the first in market share. For users, no one will be loyal to a certain
delivery software that more orders was produced under the stimulus of
the take-out platform. Ele.me applies online payment services marketing
strategies, such as a red packet. Many users have the mind for profit.
Thus, it is difficult to calculate the number of Elmers loyal user.
When the overlap degree of users is high, the market share of the first
statistics is meaningless. And also often in multiple delivery platform for
businesses to open accounts, the resources are overlapping of each
platform. The second is to develop a white-collar and the housing market.
This will have to explain a problem. Ele.me concentrates in colleges and
universities while the white-collar and the housing market is relatively
blank. The housing market was selling foreign demand is far less than the
market, and white-collar workers and students in consumption and
requirement about the quality of the restaurant has a significantly
difference.
High-end white-collar market is occupied by baidu take-out and
Taodiandian which are first-mover. Then its own logistics problems are
set up. Its own logistics can really solve the problem of delivery speed to
a great extent, but for Ele.me it may not be easy. First delivery market
logistics problems relatively chaos, small ranges but is complex, to form
a nationwide efficient logistics team needs a lot of money. Moreover, as
in free of charge delivery platform attracting a lot of small businesses to
join, but these merchants often delivery by themselves. If they cooperate
with Ele.me, logistics is bound to increase business operating costs. Their
own logistics is necessary but there is a lot of the problem to be solved.

Furthermore, in terms of O2O it is no longer about search online and

purchase offline or buying online and picking up in-store. The
exponential growth of e-commerce in China, fueled by Alibaba Groups
Taobao Marketplace and Tmall.com, has led a number of brick-andmortar retailers to reevaluate their e-commerce strategy. O2O has been
growing rapidly in US and Europe, where the division between online
and offline purchase channels become blurry. From more traditional O2O
concepts such as Groupon and electronic in-store coupons, O2O has
evolved into a blended model of online and offline commerce. In China,
traditional retailers are trying to retain their market share in the midst of
heavy competition from online stores. Similarly, online stores have also
been looking for ways to extend their competitiveness in product
categories that normally requires a personal touch-and-feel experience,
and drive people to purchase the products online.
In May 2001, Alibaba Groups Tmall.com opened a furniture store in
Beijing to allow customers to physically try out their furniture before
buying online. In 2013, before the Single Day, November 11, in China,
many stores ran showroom previews in their physical locations,
encouraging users to try on their products and add them to their online
ecommerce websites wish list. Customers would then receive automatic
notification with the deep discount information on November 11 to
persuade them to complete the purchase (Antony, 2013)
While O2O is still not prevalent in Hong Kong and other Southeast Asian
countries, a few ecommerce retailers are taking small steps to address
this. An example is luxury department store, Lane Crawford, which
allows people to make the purchase on their online store and pick up their
items in any physical store the next day. This reduces the wait-time for
many Hong Kongers, who are impatient to wait for mail delivery and

reluctant to pay for shipping cost, to enjoy almost-immediate

gratifications.
With the increasing popularity of online and mobile payments in Asia, it
will be interesting to see how physical retailers and e-commerce sites
respond to the changing dynamic of consumer purchase journey.

4.6 Hypothesis
Two hypothesis are presented in the following content. The first one is
marketing and the core of that in Eleme refers to products and promotion.
Actually, as takeaway service organization, their food is similar because
food to be delivered is offered by other restaurants rather than them. They
compete their service and marketing promotion. According to the data of
80 questionnaires, I conclude some information below.

82% people have ever used takeaway service (Among them 36% use
eleme more than twice a month)

66% customers are attracted by Elemes promotion and subsidiaries

70% people put emphasis a variety of choices

40% consumer think the quality of alliance restaurants is quite different

A small

part of people wish no delivery fees

Another observation that emerged was the need for niche plays in the
O2O market. Since most of the value generated will mainly occur offline,

it will be important for such O2O businesses to have strong systems,

processes, staff training, customer service, post-purchase service to really
succeed. Niche markets could be health spas, gyms, rental cars, food
delivery.

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Appendix
Figure 1

Figure 2

Interview records for one of the founders KangJia

Q: What is Eleme scale now?
A: Until now, we have almost 1000 people distribution team, our overall
team achieve 4000 people. The number expands constantly.
Q: Is your working time free? many activities between staff? much
pressure?
A: working time is not free, from 10am to anytime. alway late, pressure
of course. we try to use less money doing much work. staff can refer to
suggestions.
Q: what is your most proud of technique? Do you think your website has
some bring spots compared to others?
A: Clear, more emphasis put on customers experience rather than design
and color of content.
Q: As a achiever of career-creating, do u have any advice to
undergraduate students?
A: The core team definitely needs firmness of mind. Do not change the
programs when facing difficulties but developing aims. A successful
companys current goal is quiet different from original one. Following to
the judgment of industry, amend the route in time.
Q: It is reported Eleme has just achieved 0.35 billion dollars financing
from several investors including Tencent. What is your action then?

A: We will have cooperation with Tencent and dianping.com. The

cooperation of strategic resources contains all the commercial tenants on
dianping.com. Besides, for Tencent, we will connect social media like
Wechat with take-out-service.

Q Whats your strategy and direction in 2015

A: The market of students is saturated. We will shift to middle and highend market. Meanwhile, the university market also needs to be held out
Questionnaire
1. Have you tried eleme to order takeout?
A. Yes
B. NO
(If you choose B, you do not need to complete the rest questions, thanks.)
2. What is the frequency of you using eleme to order takeout?
A. Once three months
B. Once a month
C. Once a month
D. Once a week
3. Through which channel do you know eleme?
A. leaflet
B. friends
C. Internet
D. Advertisement in cooperative restaurants
4. How much time do you wait for takeout?
A. less than 20 minutes
B. 20 - 40 minutes
C. 40 - 60 minutes
D. more than one hour
5. Why do you choose eleme rather than other companies?
A. good advertisement
B. coupons
C. high efficiency
D. low takeout fees
6. Whats your first impression of eleme website and APP?
A. concise

B. be attracted by those that have promotion

C. confused due to many restaurants on home page
D. easily order

7. What do you think about the quality of takeout?

A. not as good as eating in restaurant
B. just so so
C. the quality of these restaurants is not the same (including costs and
speed)
D. delicious and clean
8. Do you have any advice for eleme to offer better service for you?