Meituan, JD.com build central kitchens to ratchet up China’s delivery war

Meituan and JD.com are taking China’s delivery war to another level, as the two instant commerce rivals have started building thousands of central kitchens in strategic locations to speed up fulfilment of online food orders.

On-demand local delivery giant Meituan is expected to continue leading the market through its launch of 1,200 so-called Raccoon Restaurants over the next three years, a plan it revealed early last month.

These facilities are designed as food court-like hubs that host various restaurant chains, which operate their kitchens only for takeaways. These sites are expected to help drive down costs and boost efficiency for Meituan’s restaurant chain partners, according to a company statement.

JD.com, meanwhile, announced a plan to invest 1 billion yuan (US$139 million) to recruit “cuisine partners”, as part of the firm’s roll-out of 10,000 self-operated 7Fresh kitchens over the next three years. This infrastructure would enable the company to promote 1,000 different sets of menus to a nationwide audience.

The e-commerce giant described 7Fresh kitchens as “the largest supply chain innovation over the 15-year course of the local food delivery industry”, the company announced last week.

The like-minded central-kitchen initiatives of Meituan and JD.com reflect a major transformation in mainland China’s catering industry, as large internet platform companies become closely involved in the back-end operations of partner restaurants.