Yum China seeking delivery deal

Fast-food giant Yum China Holdings is looking at buying food-delivery services firm Daojia.com.

Discussions are at an early stage, but a deal could be worth up to US$200 million, Reuters reports.

Established in 2010, Daojia.com focusses on online food orders and delivery services targeting the middle class urbanites in 10 Chinese cities. With a 3000-strong logistics team, it works with more than 6000 restaurants.

Food-delivery apps are becoming more popular in China with services being offered by Baidu Inc’s Waimai, Alibaba Group Holding’s Meituan and Tencent Holdings’ Ele.me.

China’s second-largest eCommerce fim JD.com and Macquarie Capital were investors in a $50 million round of fundraising by Daojia two years ago.

Yum China was spun off from US-based fast Yum Brands Inc 12 months ago. The company’s brands include KFC and Pizza Hut.

CEO Micky Pant says that while only 10 per cent of the company’s sales are delivered, deliveries are growing at double digits and will be an important driver of growth.

Yum China secured a $460 million investment from Primavera Capital and Alibaba affiliate Ant Financial before its spin-off. Yum China already is the biggest user of Ant’s Alipay mobile payments service. The restaurant company is also investing in its mobile ordering system and loyalty programs.

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