Shanghai Street View: Defining Dining

This week’s Street View gets us into the festive holiday mood with a look at food, including the latest take-out dining craze sweeping our city and a much smaller but still significant development in the main campus cafeteria at the university where I teach.

The bigger trend has seen a sudden explosion of take-out dining services in our city, resulting in a new flood of bicycles and other deliver vehicles zipping through the streets of Shanghai. The smaller item saw the main dining hall at Fudan University officially launch a western-style restaurant over the past week, bringing tasty but greasy items like pizza, pasta, steaks and upscale coffee to some of our city’s best and brightest young minds.

One of my favorite things about writing this column is getting to chronicle the many booms and subsequent busts that continually sweep through a major city like Shanghai. I’ve previously written about local explosions in convenience stores, beauty salons, coffee shops and most recently asset management companies, as entrepreneurs and big chains flocked to these latest business trends.

Of course most of these explosions result in major overbuilding, which inevitably leads to big retrenchments involving mass store closures and layoffs. Such retrenchment has already hit the convenience stores, and is just starting among the hundreds of coffee shops that have sprung up like weeds in our city over the last couple of years.

Such a fate is almost inevitably in store for the latest trend in take-out dining services, which typically link up entrepreneurial web- and mobile-based companies and local restaurants. Such services allow city residents to order from a wide range of their favorite local restaurants over PCs or cellphone apps, and then have the food delivered to their homes in big insulated boxes mounted on the backs of squadrons of bicycles.

Following in Sherpa’s Footsteps

The earliest pioneer in the space was our own locally based Sherpa’s, whose orange and black logos and fleet of similarly colored bicycles are familiar to the city’s many expats who were the company’s earliest target audience. Individual chains like McDonald’s (NYSE: MCD) and KFC (NYSE: YUM) also own and operate their own home delivery services, but that was the extent of the business for quite a while.

Things began to change about a year ago, when large numbers of food delivery bikes started to appear on our streets operated the start-up called Ele.me, whose name means “Are you hungry”. That company attracted my attention last year when it received an investment from restaurant ratings site Dianping, often called China’s equivalent of US giant Yelp (NYSE: YELP), which also happens to be based here in Shanghai.

But what started as a trickle has turned into a flood over the last few months, with numerous other services pedaling onto our streets. In the process of conducting my own informal poll over the last week, I spotted delivery bikes operated not only by Ele.me, but also by companies called Dada, Dianwoba , Meituan and Taodiandian.

I later did some research and discovered the first 2 are independent venture-funded start-ups, while the latter pair are backed by leading group buying site Meituan and e-commerce leader Alibaba (NYSE: BABA), respectively. Baidu (Nasdaq: BIDU) has also announced it’s getting into the business, though I have yet to see any of its bikes on the road. While such services are certainly popular, this latest explosion seems just a tad excessive and I do expect that some of these businesses will go bust or get bought over the next year or two.

Next there’s the development at Fudan, which will be invisible to most Shanghai residents but was quite exciting for me. I learned about the new western restaurant from a couple of people at the journalism school where I teach, who each informed me excitedly about this latest flavor in campus dining.

I got to sample the fare myself over the last few days, and discovered the offerings were mostly similar to a Pizza Hut or Domino’s, including pizza, spicy chicken wings and pasta that were tasty but quite greasy and probably not too healthy. To top things off, the eatery also featured an upscale coffee shop, whose offerings and service were definitely a notch above the downscale swill served up by largely indifferent employees at our campus snack store.

This latest food choice marks the extension of a similar expansion that saw the dining hall open a Muslim food section last year specializing in fare from Xinjiang. The opening of that section, and now this western food area, seem remarkable to someone like me when compared with the mostly local fare that filled most campus dining halls just a decade ago. The latest boom in take-out dining services would have also been unthinkable just a few years ago, and both moves show just how quickly Shanghai is developing a taste for the latest national and global dining trends.