An economic analysis of takeaway consumption behavior : evidence from Meituan takeaway orders

Abstract

The food takeaway market has grown rapidly in recent years, a trend driven by changing consumer preferences and technological advances. However, very little is known about the users’ consumption behavior and the price elasticity of the demand within this market, of which issues may have important implications for pricing strategies and policy decisions. In this paper, we use the online ordering data from Meituan, the China's largest online takeaway platform, as well as rich areas of interest information of consumers and suppliers, to empirically explore three main interests: first, how large is taker-away demand of consumers for food today? What are the sources of these demands? Second, under such demand, how consumers’ eating habit developed, especially for those unhealthy foods. Third, how elastic is the takeaway consumption? To answer these questions, we investigate the pattern of demand structure in terms of online takeaway and investigate the potential mechanisms leading to demand changes. Our primary analysis describes the consumption records, and provides a detailed portrayal of users' consumption behavior and consumption content. Furthermore, we discuss whether consumers are "rationally addicted" to take-out of specific food segments. Our empirical results show that the coefficients of both the advance and lagged terms of beverage consumption are significantly positive, which indicates that consumers are rationally addicted to take-out consumption of the beverage category. In addition, we estimate the elasticity of demand, and the results show that the mean value of the average see elasticity is 0.497, which means that when the take-out price increases by 10%, the number of take-out orders placed will decrease by about 5%. Meanwhile, there is heterogeneity in the price elasticity of demand for different take-out categories.