3 Reasons Why Eleme is Dominating in China
Updated: May 27, 2019
The brand is Eleme. The company was started by two graduates from Shanghai Jiao Tong University, Xuhao Zhang and Jia Kang, who are now the co-founders of China’s most popular food delivery service. Using either the website or the app, people can order almost any consumable, choosing from an extensive variety of restaurants and food vendors, and have it delivered right to their door. While there are other popular services, Eleme remains firmly on top.
Here are the 3 main reasons why:
1. Influential Investment
Support from 2 of China’s big 3 tech companies gives any organisation a good chance. Eleme’s success is largely attributed to heavy investment from e-commerce giant Alibaba, who recently pumped an additional $1 billion into Eleme. Alibaba and their rival, Tencent, have both given Eleme plenty of capital. These 2 companies carry weighty reputations in and out of China. Anything they touch automatically becomes much more attractive to opportunistic investors.
What’s interesting about the journey of this startup’s success is that, while Alibaba remains the company’s largest shareholder, Tencent actually got there first. They injected $350 million and secured its position as Eleme’s major shareholder in 2015. In an ongoing effort to match Tencent’s every move, Alibaba was funding one of Eleme’s main competitors, Meituan. However, in 2016 Alibaba switched tack and decided to redirect their support by putting $1.25 billion into Eleme.
Since the two investing giants don’t like to put their money in the same place, Alibaba’s large stake in Eleme essentially forced Tencent to move on. They did so by filling the void Alibaba left at Meitaun, becoming its major shareholder (the tables have turned). Because of this start-up swap by key players, Eleme has been able to secure the capital and press it needs to move forward.
2. Celebrity Endorsement
Basically, having Kobe Bryant endorse your brand in China is something of a slam-dunk (so to speak). A study conducted by China Economic Review found that, when considering celebrity endorsements, Chinese consumers value hard work over looks and glamour.
Convincing consumers of Kobe’s strong moral character hasn’t been difficult – his career and reputation speak for themselves. His well renown quote “I can’t relate to lazy people. We don’t speak the same language. I don’t understand you. I don’t want to understand you,” encapsulates his persona perfectly.
Eleme partnered with Kobe for a number of promotions, including 2 very amusing 30-second video ads showing Eleme’s food delivery coming through right when Kobe needs them, matching the hard working attitude that Chinese consumers want from their celebrities.
3. White-Collar Branding
The company started from humble beginnings. Following dorm room conversation, the students made deals with local restaurants and hired a handful of delivery drivers whilst they took orders over the phone. During their growth into the behemoth they are today, Eleme has consistently made an effort to position itself as a high-end service appealing to white-collar workers.
Eleme’s CEO recently stated in a press conference that “from now on we are no longer focusing on volumes or the number of orders, but rather the quality of service.” This has manifested itself in a higher emphasis on speed as well as partnerships with high-end restaurants offering a wider variety of products, even including ice cream. By adjusting their priorities they have been able to capitalise on the Chinese propensity for luxury-lifestyle products and services.
Whether or not Eleme will remain on top of the food chain depends on its ability to continuously offer better service than its competitors. They have the leverage of Kobe Bryant and the fuelling capital from Alibaba. Now their focus lies on strategy and execution.
Mailman is a digital sports marketing consultancy and technology company. We help global rights holders, athletes, and leagues to build a successful business in China.