Who Gets the Good Meal on Pinhaofan?
Despite the old adage that “cheap goods are never good,” people cannot help worrying about food safety — I myself once ended up with two days of diarrhoea after ordering a portion of beef-tallow fried rice. Yet, as one Meituan user put it: “Pinhaofan can keep you from starving — a meal for 10 yuan, what more could you ask for!” With Pinhaofan accounting for 10% to 25% of all orders across Meituan’s major cities, its “success” is beyond doubt.
But I have always wanted to know: what exactly lies behind Pinhaofan’s cheapness?
I. Bad Money Drives Out Good
It started with a chat with Brother Zeng, the owner of a small coffee shop in Shenyang, who told me why his café had never joined Pinhaofan: “When their business manager came to negotiate, they asked us to bring the price of an Americano down to six yuan — that’s already close to our cost price.”
Last year, coffee bean output fell and prices rose, and Brother Zeng only ever uses high-quality beans, so meeting Pinhaofan’s demand for lower prices was simply out of the question. “There is no way we can go against our conscience and do that. Some places do use extremely poor-quality beans, but the taste is awful.”
I asked: are there any shops that have joined Pinhaofan yet still insist on good ingredients?
With the distinctly wry humour of a northeasterner, Brother Zeng told me a story about a fellow shop owner. The beans at that café were no worse than his own, but after joining Pinhaofan, prices were squeezed so low that the shop made no profit at all. The volume of orders did pick up, though — sales once reached second place on the citywide beverages leaderboard for all of Shenyang, behind only Luckin Coffee. Business was getting better and better, yet not a single penny was earned. They’re about to fold. Right now they’re trying to sell up the lease!” Brother Zeng finished.
As I left the café, I gazed at the signboard and quietly committed its name to memory. It is a perfectly good coffee shop, but on Meituan’s listings you would be hard-pressed to find it. Without paid search placement and without the traffic boost that Pinhaofan brings, it is buried deep down the list. In that moment, I felt with perfect clarity what it means when bad money drives out good.
II. Big Tech Innovation or Small Shops Bearing Painful Losses?
One day, while having Xianghe meat pancakes in Haidian, I noticed the shop was listed on Meituan delivery but had not joined Pinhaofan. The owner explained to me: “I sell one meat pancake for eighteen yuan on my own, but on their platform it gets squeezed down to ten yuan. Once you work out ingredient costs, rent, and utilities, it is a loss-making proposition.” He believed that delivery-only shops with no dine-in service, which rely more heavily on the platform and traffic, might be better suited to Pinhaofan.
But I have found that if ingredient costs cannot be controlled, even for delivery-only shops with less rent pressure, Pinhaofan is nothing more than a loss-making exercise in chasing orders. Ms Zhang from Hubei shared on social media that she had run a delivery-only shop specialising in Huainan beef soup and joined Pinhaofan in 2022, but lasted barely a year before subletting the premises due to sustained losses.
On the surface, Meituan publicly claims that the secret to making takeaway cheaper through Pinhaofan lies in “technological and business-model innovation”. But from the food-shop operators’ experience, Pinhaofan is simply another means by which Meituan squeezes prices. Only when shops concede further on margins and lower prices can Pinhaofan attract users with nearby delivery addresses to order the same dishes from the same shop.
III. Traffic as a Price-Squeezing Weapon
Ms Mei, a Bilibili user whose account is based in Guangdong, explained: “My family runs a restaurant. We joined Pinhaofan this year with just a few dishes — stir-fried shredded potato and pork, braised aubergine, stir-fried pork, stir-fried yuba and shredded pork — netting just 7 to 9 yuan per order. Pinhaofan barely turns a profit. But with regular takeaway, unless you run Meituan’s voucher promotion campaigns, you get no traffic — and sometimes what you actually pocket is even less than what you earn from Pinhaofan.”
Brother Zeng, who runs his café far away in Shenyang, also brought up traffic. He had not joined Pinhaofan — apart from not wanting to lower prices, another reason was that he did not, for now, need to attract extra traffic. By “traffic generation,” he meant that once a shop joins Pinhaofan, the visibility and order volume of its main storefront listing increase, and Meituan’s business managers typically use this as a bargaining chip to coax shops into signing up. But Brother Zeng’s café is run by just two people, and they simply could not cope with the surge in orders that traffic would bring.
He revealed: “Selling over a hundred extra cups a day with so few hands — you simply cannot keep up. Some small shops do find a way to manage, for instance by pre-extracting the coffee and storing it in several large vats. Left sitting for too long, it inevitably tastes bad. To keep customers happy with the flavour, they pump in more jam and syrup to mask the taste — it is all ‘science and dark arts.'”
In the regular takeaway market, traffic is already so scarce that the only way to obtain it is by taking part in Meituan’s promotional campaigns. Although Pinhaofan drives down the price of the food, it comes with the platform’s traffic preference, which boosts order volume. The logic of “thin margins, high volume” may seem sound, but when the margins are too thin — or outright negative — the shop can only resort to cutting costs and boosting efficiency.
I once saw a chef on Bilibili comment on Pinhaofan like this: “Young people, take my advice — stop ordering. It is for your good and for ours as chefs. There are hardly any fresh ingredients left in our kitchens; Meituan has squeezed us so hard we have no dishes left to cook!”
And with that, I was reminded once more of that portion of beef-tallow fried rice I had ordered on Pinhaofan, which left me with two days of diarrhoea.
IV. When the Platform’s “Moat” Is a Pit for Workers and Consumers
At the time, public attention focused more on moral condemnation of unscrupulous shop owners and criticism of the platform’s failure to regulate, yet few recognised that the very ecosystem of delivery-only shops was catalysed by the platform itself. Pinhaofan is perhaps the clearest example demonstrating that the platform is deliberately building a “cheap takeaway” model.
In fact, the logic of Pinhaofan can only be understood within the platform’s broader “cheap takeaway” strategy. Since its launch in 2020, Pinhaofan has helped Meituan achieve three goals: tapping into lower-tier markets, maintaining user retention, and deepening its competitive moat. According to the LatePost, 120 million users have already used Pinhaofan, accounting for nearly a quarter of Meituan’s total user base.
Data disclosed by Meituan shows that Pinhaofan’s peak daily order volume has surpassed 8 million. Analysis by BOCOM International indicates that Pinhaofan handled 1.16 billion orders in 2023, representing 6% of Meituan’s total takeaway orders, with its share expected to reach 20% in the future.
By the first quarter of 2024, Zhiwei Editorial reported that Pinhaofan orders already accounted for 10% of Meituan’s total takeaway volume. According to statements made at Meituan’s public earnings call, this figure had already reached as high as 25% in certain cities, and was expected to continue rising.
Behind these steadily climbing figures lies the “capability” Meituan has forged through Pinhaofan to make takeaway even cheaper.
Some people believe that the food quality on a shop’s Pinhaofan listing is no different from its regular listing, and that only the portion sizes differ. Others point out that many of the “delivery-only” shops on Pinhaofan are run by well-meaning ordinary people. These are, of course, partly true.
But as a consumer, I cannot help wondering what choices Pinhaofan shop owners will be forced to make during the actual preparation of food, under pressure from the platform: will they use fresh meat or try to clear out frozen meat nearing its expiry date? Will they choose fresh vegetables or ones that have gone off? If a portion of chicken thigh drops on the floor, will they pick it straight back into the box or make the customer a fresh one?
We cannot be certain whether a shop owner’s inner conscience can withstand external pressure when faced with the choice between survival and closing shop. But two things we can be sure of.
First, as competition between Meituan, Douyin, JD.com and Ele.me in the online local-life services space intensifies, Meituan increasingly needs the kind of “cheap takeaway” capability that Pinhaofan provides in order to reinforce its “moat.”
Second, the food produced under all this pressure will ultimately pass through our mouths, be digested by our bodies, and any resulting health problems will be ours to bear.
V. Can Delivery Riders Still Cope?
In fact, because Pinhaofan not only squeezes prices down from the shops but also cuts riders’ per-order income by several yuan, quite a few riders are reluctant to carry Pinhaofan orders up to customers’ doors, sparking conflicts.
As government departments pay growing attention to the safety and welfare of flexible-employment workers, delivery riders included, and platform digital labour, platforms such as JD.com and Meituan have announced plans to pay social insurance for qualifying riders. Will this promise be kept? And who will ultimately bear this “extra cost”?
If Meituan’s “cheap takeaway” strategy is ultimately forced to give proper weight to labour protections, shop interests, and food safety, compelling price increases that fill in its “moat”, can it still stand alone as the dominant player? Will consumers and shop owners have better alternatives?
But one thing is certain: a company’s “moat” should never be dug as a “pit” for consumers and workers.
References
Budget Meals Trending: Young People in First-Tier Cities Are Eating Cheaper and Cheaper | Guyu Data
Hongcan | How Much Profit Can a 10-Yuan Pinhaofan Order Actually Make?
Zhiwei Editorial | 10-Yuan Pinhaofan Has Worn Away Takeaway Shops’ Last Remaining Edge
2024 Meituan Special Report: Pinhaofan, a New Takeaway Model — “Grouping” for Greater Efficiency – Report Digest – Vzkoo https://www.vzkoo.com/document/20240710ace58c49bfa31a306d580736.html
Meituan 2024 Interim Financial Report https://www.meituan.com/investor-relations
One Video Explains Why Pinhaofan Is So Cheap – Bilibili https://b23.tv/rwP6JW6
With 3·15 Consumer Rights Day just around the corner, we would also like to hear how you, dear readers, feel about Pinhaofan and the takeaway industry. We welcome your stories and views in the comments — or scan the QR code to join our call for submissions, “100 Moments When I Don’t Want Takeaway”.
Written by: Zheng Yuyang
Edited by: Tianle