DoorDash in China
The Boston Consulting Group and UConsulting hosted a Case Competition in 2022. We were tasked with creating a comprehensive case study to present the entry of DoorDash into the Chinese market.
While not a product case study, the data-driven strategic thinking helped shape my interest in pursuing impactful research and deliver people-focused solutions.
This is the presentation that won us runner up! 👏🏻✨
ROLE
Market Strategist/Researcher
DURATION
2 Weeks (Spring 2022)
TAGS
Competitive Analysis
01 RESEARCH 📄
Over the past 5 years, DoorDash has expanded into Canada, Australia, Europe, and most recently, Japan, marking their entrance into the Asian market with their strong financial backing as an asset – amounting to approx. 2.5 billion dollars, indicating strong confidence from investors. DoorDash sets its goal to perfecting a system of delivery by taking into account every variable within the delivery process and analyzing meaningful data to improve efficiency and reliability.
More Consumers
More Dashers
More Merchants
Constant feedback loop of economic uplift for all marketplace participants
9.99/Month
$0 delivery fee
Save 10%
Convenience without sacrificing selection, flexibility, and quality
Consumer Insights
Operational insights
Data about which products trend at specific times/locations and ability to adjust fees/promotions accordingly.
The current and projected market landscape highlights a clear opportunity for entering the Chinese market, underscoring why expansion should be strategically pursued.
766%
Growth rate in the past five years in China. Total number of users in China is almost 6 times as much as the US in 2020.
469 M
Internet users in China use online food delivery services, representing a user penetration rate of 46.4% in 2021 in China.
$100 B
projected market volume by 2025, making it the largest market internationally (US $42B).
We identified competitors who currently play a significant role in shaping the industry in China
Meituan
Extensive customer base in China with strong financial resources but unethical brand image (monopoly laws broken)
Market Share: 67.3%
Customers: 510M
Merchants: 8.3M
Commision rate: 10%-20%
Ele.me
The original delivery platform in China which was later acquired by the tech giant, Alibaba but declining user retention
Market Share: 26.9%
Customers: 40M
Merchants: 870K
Commision rate: 5%-25%
Competitors to Global Average Revenue (in $BN)
After thoroughly analyzing the online food delivery industry, we uncovered critical trends that not only drive growth in both the U.S. and China but also reveal significant market differences.
SIMILARITIES
01 Increased use of the internet
Supply Side: An increase in consumer data by giving companies insights to enhancing user-experience
Demand Side: Upsurge of opportunities for quick and convenient food delivery
02 Investments on research and development
Supply Side: Surge in investments allowed companies to focus on introducing new technologies to improve their services and increase advertising.
03 Impact of COVID-19
Supply Side: Restaurants opted to take-out and online food delivery to accommodate lockdowns.
Demand Side: Customers prefer contactless delivery as opposed to dine-in service; revenue thus doubled over past two years.
DIFFERENCES
01 Cultural Differences
US Market: 63% of online food delivery users are Millennials and Gen Z who prefer the convenience of pre-prepared meals.
Chinese Market: 83% of online food delivery users are white-collar workers because of “996” working culture which forces white-collar workers to work constantly.
02 Integration of Suppliers
US Market: Focuses on acquiring large food chains and well-known establishments, as they tend to be more profitable.
Chinese Market: Focuses on a diverse range of businesses, including local vendors, to integrate food delivery into daily life. Apps have offered subsidies toward small businesses to increase partnerships.
02 STRATEGY ⭐
By focusing on cities with the largest foreigner population and highest demand for foreign food such as Guangdong, Shanghai, and Beijing, an exclusive partnership with chains that are available through DoorDash in the States will offer familiarity to global companies. Creating multiple language options on the app catering to all foreigners will appeal further.
01 Work Culture
The “996” working culture causes consumers to have little time to dine-in
02 COVID-19
Recurring COVID-19 variants placed travel bans on citizens
03 Revenge Travel
Larger emphasis to experience foreign culture due to lockdown
04 Trends For Goods
Demand for foreign goods, but little development in food delivery
01 Tags
Ability to filter searches with user generated tags that categorizes restaurants
02 Incentived Features
Extraneous features such as spin wheels and daily prices increase user interactions
03 Save
Ability to save and heart not only restaurants but menus and food items
JD.com China’s most popular e-commerce company that offers groceries, fresh food, electronics, apparel, and more.
We recommend Doordash to utilize JingDong’s delivery network, including its operating system, algorithm, and deliverers, in order to quickly establish a foundation in a new market.
01 Previous Partnerships
Intention to enter food delivery industry with Daojia which was unsuccessful
02 Global Expansion
JingDong is pursuing a global expansion in South East Asia and Europe
03 Mutual Exchange
With DoorDashes international influence and JingDong’s trusted image in China, there can be a exchange of data, technology and network,
03 IMPLEMENTATION 🏃
In relation to its competitors, DoorDash should set a 15% commission rate and $4.99/month DashPass. A One-time purchase would save more money in the long run.
Meituan
16% exclusive partners
26% newcomers
$2.37 for the first month
$0.95 per month
$1.00-2 Delivery fee
$8.46 fee (five orders)
Ele.me
10%, 13%, 16%
dependent on restaurant’s scale
$1.47 per month
$0.79 discount per month
$1.00-2 Delivery fee
$8.18 fee (five orders)
DoorDash
15%
commission for all orders
$4.99 per month
$0 delivery fees
Member-only promotions
$4.99 fee (five orders)
Through phased approach to preparation, development, and execution from 2022 to 2025, the plan demonstrates a clear pathway for scalability and market adaptation.
04 Reflection 🪞
1. Importance of Culture and Localization
Understanding how user’s preference and behaviors differ based on culture resulted in a tailored strategy. This contextualization was an eye-opening exercise to have different perspectives in mind when strategizing.
2. Data-Driven Design
By leveraging information such as peak ordering times or performance in other countries, I gained a deeper understanding of how to interpret data and in turn create actionable insights.
3 . Keep Scalability in Mind
I learned how to approach UX with a systems-thinking mindset, ensuring that features and workflows could adapt to growing user bases and diverse regional requirements.