Logistics

Dogs of war

7-Eleven gets delivery partner Meituan as sector competition heats up

Kuaigou-Dache-w

Go fetch: Kuaigou Dache or “Fast Dog Car-hailing”

Three years ago we looked at the Chinese names chosen by 40 of the world’s top multinationals, giving top marks to selections made by BMW and Coca-Cola (see WiC283).

You might expect a homegrown operator to have an easier time picking its identifier, although one of China’s leading delivery firms has just been harangued for making a total hash of it.

58 Suyun announced in the middle of August that it was changing its Chinese name to Kuaigou Dache, which roughly translates into English as ‘Fast Dog Car-hailing’.

The canine connotations drew a furious response from many of its delivery drivers, sparking street protests in Zhengzhou, the capital of Henan province.

Video footage shows them complaining of their humiliation in front of customers. “If I call a client to check the [order] status, am I supposed to say ‘Hello, this is Fast Dog’?” one asks. “I cannot say that! It would be cursing myself and the company!”

“Calling people dogs is insulting,” another gripes. “Why does it have to be a dog? It could be other animals, like a tiger or a wolf.”

Kuaigou put out a statement defending the name change and pointing out that dogs have reliable, trustworthy natures. (Tell that to Donald Trump, who uses the term ‘dog’ as his insult of choice.)

A few netizens think it might all be a publicity stunt, highlighting how Sogou, the country’s number-two search engine, and Kugou, one of its many music apps, have the dog-like identifier gou in their names, but avoided similar controversy.

Others retort it’s unlikely that Kuaigou would have need for such an elaborate PR stunt after pulling in another $250 million of backing from investors in July, including follow-up funds from Cainiao, Alibaba’s logistics unit.

Alibaba was the key influencer when 58 Suyun merged with Hong Kong-based GoGoVan last year (see WiC379). The plan was to capitalise on the complementary strengths of the two brands: GoGoVan’s focus on deliveries in Hong Kong and Southeast Asia, and 58 Suyun’s expertise in fulfillment in more than a hundred cities in mainland China.

As of July, the merged company had more than a million registered drivers, covering 339 cities and nearly eight million customers.

Maybe there’s a case that Kuaigou’s new name makes more sense in the dog-eat-dog world that delivery has become, since we first introduced the sector with our article on the clannish competition of the ‘Tonglu gang’ (see WiC344).

Much of the recent excitement in the industry has come from apps like Tencent-backed Meituan Dianping, which has been branching out from food delivery into new areas from ride-hailing and finance to travel.

Meituan’s multiplying reach is bringing it into contact with a wide range of partners, including the convenience chain 7-Eleven. At first glance it is an unlikely pairing: one of 7-Eleven’s strengths is that it shouldn’t be too much bother for its customers to find a nearby store.

That was the initial view of the company’s executives too, news website Jiemian said, who turned up their noses at the courier firms thinking that their network of neighbourhood stores was well placed to win over customers. “Our customers don’t need takeaways; what they really want is convenience,” an insider told Jiemian earlier this year

But 7-Eleven has changed its mind, probably because of the jaw-dropping growth in orders from apps like Meituan and its main rival the Alibaba-owned Ele.me.

Dada-JD Daojia, an online grocery and delivery firm with a five-million strong workforce backed by JD.com and Walmart, is another major player, announcing $500 million of new funding of its own a few weeks ago.

The delivery sector has been developing at breakneck speed as longer-term forces in urbanisation and domestic consumption converge with newer trends in shopping behaviour and the spread of ‘last-mile’ logistics.

It’s this kind of transformation that has convinced 7-Eleven to do deals with the delivery platforms, adding Meituan’s service to 251 of its outlets in the capital this summer. A company spokesman told Jiemian that new arrangements with other platforms, including Ele.me, are also under consideration.

Bigger picture, it does raise a health question: if hundreds of millions of Chinese can’t be bothered to walk five minutes to their neighbourhood convenience store – ordering instead from their sofas – could the country be heading for a couch potato crisis?


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