Yum China seeks to buy Daojia.com

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Yum China Holdings, Inc. (NYSE:YUMC) is in talks with Daojia.com for up to $200 million. The company seeks to purchase the food delivery services firm to help boost sales from customers dining at home. Yum China has aspirations to triple its outlets in China to over 20,000. Dining habits are always changing in the world’s fastest growing major economy. Food delivery is also a key area for restaurants to improve sales.

Sources warn that discussions are in initial stages and a deal may not be established. Daojia.com is an online food orders and delivery services that targets China’s middle class urbanites in 10 cities. They have 3,000 employees in their logistics team that work with over 6,000 restaurants.

Food delivery apps are being used more than ever as they provide convenience and cheap delivery methods. JD.com, China’s second largest ecommerce firm and Macquarie Capital were investors in a $50 million round of fundraising by Daojia in 2014.

China’s main tech companies (JD.com, Alibaba, Baidu, etc.) said have made offers. “It’s a very aggressive play they’re making. They’ll have access to delivery data across China, it’s very powerful to understand what people are buying, what people are consuming,” one of the sources said. Yum China is the biggest user of Ant’s popular (Alibaba affiliate) Alipay mobile payments service as the restaurant operator invests in its mobile ordering system and loyalty programs.

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