Alibaba-backed food app hit by safety scare

Alibaba-backed food app hit by safety scare
PHOTO: Screengrab from www.ele.me

THE rapid development of China's online food ordering market has hit a bump, after the country's state broadcaster shamed the sector's biggest player on a TV show.

Ele.me, the online food ordering and delivery application backed by Alibaba Group, has fallen under the spotlight after the TV show said that the app allowed unqualified vendors to sell food through its online platform.

The food and drug administrations in Shanghai and Chengdu, Sichuan province, both said on Wednesday they have launched investigations.

Ele.me, the Shanghai-based site which handles food ordering and delivery to over 300 cities in China, apologised and vowed to rectify the situation.

Zhang Xuhao, its chief executive officer, said it will introduce stricter checks to safeguard food safety and carry out an investigation to make sure all the restaurants on its platform have licences.

Analysts suggested Ele.me's troubles, however, may lead to a rethink by many firms in the hyper-competitive Chinese online food ordering and delivery market on how they operate.

Lu Zhenwang, an independent Internet expert and the chief executive officer of the Shanghai-based Wanqing Consultancy, said the food-safety concerns will certainly cost Ele.me.

Statistics show Ele.me leads the market with a 33.7 per cent share, followed by Meituan Takeout (33.1) and Baidu Takeout (19).

The other two online food ordering and delivery apps are also backed by China's top Internet players Tencent Holdings and Baidu.

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