“Pin Hao Fan”: Who is actually eating “good food”?
While the adage “you get what you pay for” inevitably raises concerns about food safety—and I myself suffered two days of diarrhoea after ordering a portion of “butter fried rice”—one Meituan user summed it up perfectly: “Pin Hao Fan keeps you from starving. For 10 yuan a meal, what more could you possibly want?” With “Pin Hao Fan” accounting for 10% to 25% of orders in major cities, the product’s “success” is undeniable.
But I have always wondered: what exactly lies behind these rock-bottom prices?
I. Bad Money Drives Out the Good
It started with a chat with Brother Zeng, the owner of a small coffee shop in Shenyang. He explained why his shop isn’t on Pin Hao Fan: “When their business manager came to negotiate, they wanted us to squeeze the price of an Americano down to 6 yuan. That’s barely above the cost of production.”
With coffee yields falling and prices rising last year, and since Brother Zeng uses high-quality beans, he simply couldn’t meet the price pressure of Pin Hao Fan. “We couldn’t bring ourselves to act against our conscience like that. Some people use incredibly poor-quality beans, and the taste is terrible.”
I asked: “Are there any merchants on Pin Hao Fan who still insist on using high-quality ingredients?”
With the characteristic humour of someone from the Northeast, Brother Zeng told me a story about a peer in the industry. That café used beans that were just as good as his, but after joining Pin Hao Fan, the price was pushed so low that they made no profit at all. Their order volume soared, and at one point, they were ranked second on the tea and coffee charts for all of Shenyang, trailing only Luckin Coffee.
“Business was booming, but we weren’t making a penny. They couldn’t hold on much longer and are now in the process of transferring the lease,” Brother Zeng concluded.
Leaving the café, I looked at the sign and silently noted the name. It is a wonderful coffee shop, but on Meituan’s merchant list, it is almost impossible to find. Because they haven’t paid for “search ranking” and lack the traffic from “Pin Hao Fan”, they are buried deep in the listings. In that moment, I truly felt what it means for bad money to drive out the good.
II. Tech Innovation by Giants or Painful Sacrifices by Small Shops?
One day, while eating Xianghe meat pancakes in Haidian, I noticed that although the shop was on Meituan, it wasn’t on Pin Hao Fan. The owner explained: “I sell a meat pancake for 18 yuan, but on their platform, it’s pushed down to 10 yuan. Once you factor in the cost of ingredients, rent, and utilities, it’s a straight loss.” The owner believed that “dark kitchens”—those without dine-in services that rely more heavily on platforms and traffic—might be better suited for Pin Hao Fan.
However, I found that if ingredient costs cannot be controlled, even for those dark kitchens with lower rent pressure, Pin Hao Fan is nothing more than taking a loss just for the exposure. Ms Zhang from Hubei shared on social media that she once ran a dark kitchen specialising in Huainan beef soup. She joined Pin Hao Fan in 2022, but lasted less than a year before transferring the shop due to continuous losses.
On the surface, Meituan claims that the secret to making takeaways cheaper through Pin Hao Fan is “innovation in technology and business models”. But from the experience of catering merchants, Pin Hao Fan is simply another tool for Meituan to squeeze prices. Only when merchants further slash their margins and prices can Pin Hao Fan attract users in the same area to order the same dishes from the same shop at low prices.
III. Traffic as a Price-Cutting Weapon
Ms Mei, a Bilibili user based in Guangdong, explained: “My family is in catering. We joined Pin Hao Fan this year with a few dishes—shredded potato with pork, braised eggplant, stir-fried pork, and yuba with pork. We net 7 to 9 yuan per order. Pin Hao Fan basically makes no money. But with normal takeaways, if you don’t participate in Meituan’s ‘mega-coupon’ promotions, you get no traffic. Sometimes you end up netting less than you would with Pin Hao Fan.”
Brother Zeng, running his café in Shenyang, also mentioned traffic. Besides not wanting to lower his prices, the other reason he didn’t join Pin Hao Fan was that he didn’t currently need to drive more traffic. “Driving traffic” refers to the increase in visibility and order volume for the main shop after joining Pin Hao Fan—a bargaining chip Meituan managers typically use to entice merchants to join. However, Brother Zeng’s café is run by only two people; they simply cannot handle the volume that such traffic would bring.
He revealed: “Selling a hundred more cups a day is impossible with so few staff. Some small shops find ways to manage, like extracting coffee in advance and keeping it in large buckets. It obviously doesn’t taste good after a while. To keep customers satisfied with the flavour, they add more jams and syrups to mask it—it’s all ‘food science’ and chemical tricks.”
In other words, in the normal takeaway market, traffic has become a scarce resource, obtainable only by participating in Meituan’s promotions. Although Pin Hao Fan drives down the price of dishes, it grants merchants priority traffic from the platform, increasing order volume. The logic of “low margins, high volume” seems sound, but when margins become too thin or turn negative, merchants are forced to “cut costs to survive”.
I once saw a chef reviewing Pin Hao Fan on Bilibili who said: “Young people, take my advice: stop ordering. For your own sake and for ours as chefs. We barely have any fresh ingredients left in our shop now; Meituan has pushed us to the point where we have nothing left to cook with!”
This reminded me once again of that butter fried rice that gave me diarrhoea for two days.
IV. When the Platform’s “Moat” Becomes a Trap for Workers and Consumers
At the time, public attention focused largely on the moral condemnation of unscrupulous merchants and criticism of the platform’s regulatory failures, yet overlooked the fact that the very ecosystem of these delivery-only outlets has been catalysed by the platforms. “Pin Hao Fan” is perhaps the clearest evidence of a platform’s deliberate intent to create “cheap delivery”.
In reality, the logic behind “Pin Hao Fan” must be understood as part of the platform’s overall “cheap delivery” strategy. Since its launch in 2020, “Pin Hao Fan” has helped Meituan penetrate lower-tier markets, maintain user stickiness, and deepen its competitive “moat”. According to a report by LatePost, 120 million users have used “Pin Hao Fan”, which is nearly a quarter of Meituan’s total user base.
Data disclosed by Meituan shows that daily order volumes for “Pin Hao Fan” have peaked at over 8 million. According to analysis by BOCOM International, the total volume of “Pin Hao Fan” orders reached 1.16 billion in 2023, accounting for 6% of Meituan’s total delivery orders; this proportion is expected to reach 20% in the future.
By the first quarter of 2024, the Zhiwei Editorial Department reported that “Pin Hao Fan” orders already accounted for 10% of Meituan’s total delivery volume. According to Meituan’s public earnings calls, this figure has reached as high as 25% in some cities and is expected to continue rising.
Behind these climbing figures is a “capability” forged by Meituan through the operation of “Pin Hao Fan”—the ability to make delivery even cheaper.
Some argue that there is no difference in quality between a “Pin Hao Fan” meal and a standard delivery order from the same shop, with the only difference being the portion size. Others believe that many of the “delivery-only” shops operating on “Pin Hao Fan” are run by kind, ordinary people. These are, of course, partially true.
But as a consumer, I cannot help but worry about what compromises “Pin Hao Fan” merchants will make during the actual food preparation process under the pressure exerted by the platform: Will they use fresh meat or clear out frozen meat that is nearly expired? Will they choose fresh vegetables or those that have begun to spoil? If a piece of chicken falls on the floor, will they simply pick it up and put it in the packaging, or will they make a fresh portion for the customer?
We cannot be certain whether a merchant’s inner conscience can withstand external pressures when faced with the choice between survival and closing down. But there are two things we can be certain of.
First, as competition intensifies among Meituan, Douyin, JD, and Ele.me in the local life services sector, Meituan increasingly needs the “cheap delivery” capability provided by “Pin Hao Fan” to reinforce its “moat”.
Second, the food produced under these pressures eventually enters our mouths and is digested by our bodies; any resulting health issues must be borne by us alone.
V. Can Delivery Riders Keep Up the Struggle?
In fact, because “Pin Hao Fan” pressures not only the merchants to lower prices but also shaves a few yuan off the riders’ income per order, many riders are unwilling to deliver these orders to the customer’s door, leading to conflicts.
As government departments pay more attention to the safety and welfare of gig workers and digital labour, including delivery riders, platforms such as JD and Meituan have proposed paying social security for eligible riders. Will this promise be fulfilled? Who will bear this “extra cost”?
If Meituan’s “cheap delivery” strategy is eventually forced to raise prices due to a necessary focus on labour protections, merchant interests, and food safety—thereby filling in its “moat”—can it still maintain its dominance? Will consumers and merchants have better options?
Regardless, a company’s “moat” should not be a “trap” for consumers and workers.
References
HongCan Network | 10-Yuan Pin Hao Fan: Just How Much Profit Can Be Made?
Meituan 2024 Special Report: Pin Hao Fan, a New Delivery Model, Improving Efficiency through “Grouping” – Report Analysis – Future Think Tank https://www.vzkoo.com/document/20240710ace58c49bfa31a306d580736.html
Meituan 2024 Interim Financial Report https://www.meituan.com/investor-relations
One video tells you why Pin Hao Fan is so cheap? – Bilibili https://b23.tv/rwP6JW6
With 3.15 (International Consumer Rights Day) approaching, we would like to know how our readers view “Pin Hao Fan” and the delivery industry. We welcome you to leave a comment to share your stories and perspectives, or scan the QR code to join our call for “100 Moments I Don’t Want to Eat Delivery”.
Author: Zheng Yuyang
Editor: Tianle