Gaode Maps Follows Google’s Playbook; Catering Merchants Aim to Take Center Stage
In October 2018, a major shareholder of Yelp—the "Dianping of the U.S."—suddenly publicly criticized the company, stating, "Yelp’s board has been derelict in its duties, failing to address strategic and operational mistakes, missing strategic opportunities, and delivering underwhelming performance consistently."
The major shareholder had good reason to be furious: Yelp’s market value, which once exceeded $10 billion at its peak, had plummeted by more than half by then and has since fallen to less than $2 billion.
What defeated Yelp was Google Maps. After its attempt to invest in Yelp was rejected, Google directly replicated a "Yelp-like" service within its own mapping product.
Catering merchants in China may not be aware of the rivalry between Google Maps and Yelp, but amid Gaode’s (Amap) offensive, they have already begun to "take sides."
Since September 23, when Gaode announced the waiver of first-year store opening fees and the launch of a package of support policies, 150,000 catering merchants have flocked to the platform. Many others have already tested the waters early: after joining Gaode’s "Street Sweeping Rankings" (a merchant rating list), their business volume has increased by 30%.
A hot pot chain brand in western China even took the initiative to reach out to Financial Story Collection, asking, "Do you know anyone at Gaode? How can we settle in as quickly as possible?"
It’s no wonder catering merchants are "switching allegiances"—ultimately, their business has become extremely tough. The China Cuisine Association summarized the catering industry’s predicament with three phrases: "slowing revenue growth, declining profits, and intensifying competition." Statistics show that in the first half of the year, the growth rates of national catering revenue and catering revenue of designated large enterprises dropped by 3.6 and 2.0 percentage points year-on-year, respectively, indicating a significant weakening of growth momentum.
"Survival is already this hard—why not try a new opportunity?!" The attitude of the aforementioned hot pot brand is representative: as competition between platforms intensifies, catering merchants can seize the chance to enhance their bargaining power, helping them break free from the passive role of "supporting actors."
The brand hopes to complete the onboarding of all its chain stores as soon as possible to capitalize on the Golden Week (National Day holiday) boom.
Gaode Launches Rankings; Catering Merchants Seek New Options
Nearly ten catering merchants interviewed by Financial Story Collection reached a rare consensus: they are either already on Gaode’s platform or in the process of onboarding. Among them are hot pot chains suited for in-store dining, Chinese fast-food brands offering both takeout and dine-in, and small family-run eateries filled with a "down-to-earth vibe."
Kaixin Restaurant, which has operated in Zhenjiang, Jiangsu for over 20 years, has always enjoyed a good reputation. Years later, diners still post about it on Xiaohongshu (Little Red Book): "This was my favorite restaurant when I studied in Zhenjiang over a decade ago—I’ll definitely go back for a big meal to honor my youth," and "This is definitely the best Northeast Chinese restaurant around; authentic flavors, large portions, and affordable prices. It was still packed even during the pandemic."
Despite its solid reputation, Kaixin Restaurant only had a modest 4.2 rating on Dianping. Its owner, Kai Xiangrong, is a straightforward man who excels at cooking but struggles with complex marketing: "I’ve basically never taken the initiative to promote the restaurant."
After joining Gaode’s Street Sweeping Rankings, however, Kaixin Restaurant became the top-ranked Northeast Chinese restaurant in Zhenjiang, Jiangsu. "This ranking isn’t bought—it’s voted for by customers with their feet," Kai said. He hung a prominent sign in the restaurant that reads "Gaode Street Sweeping Rankings Recommended Restaurant" and even invited a lion dance troupe to celebrate.
With increased fame came more business: Kai roughly estimated that after making the rankings, the restaurant saw a 30% increase in new customers.
Kaixin Restaurant is not an exception. Just two weeks after Gaode’s Street Sweeping Rankings launched, over 2,000 catering establishments across the country voluntarily displayed signs indicating their ranking inclusion. In the first week of the rankings’ release, the overall traffic of "down-to-earth small eateries" on the list surged by 187%.
The common reason behind merchants’ eagerness to join is the harsh reality of their business. Today, the catering industry has entered a phase marked by "high costs, high turnover, and high closure rates"—the so-called "Three Highs."
According to industry reports, in the first half of 2025, China’s catering market saw a wave of closures at a rate of 6 stores per minute, with 1.61 million stores shutting down. This is equivalent to 8,800 catering owners exiting the market every day.
At the same time, catering merchants are generally burdened by high costs, including rent, labor, and marketing expenses. Statistics show that the cost of platform ranking promotion remains stubbornly high, with 30% of small and medium-sized merchants’ profits eaten up by such promotions. Amid fierce competition, merchants are forced to rely on low-priced group buying to attract customers, leading to an 8.3% year-on-year drop in average customer spending. As one merchant put it: "It looks busy, but we’re not making any money."
The aforementioned hot pot chain told Financial Story Collection that currently, half of its customers come from group buying platforms: "Growth mainly depends on online channels."
Yet the chain has mixed feelings about existing online platforms: "Between commissions, promotion costs, and content creation requirements, the burden is not small." Meituan charges a 5% commission on group buying orders, while Douyin (TikTok China) has a relatively lower commission rate of around 2.5%.
However, "to succeed on Douyin, you must build a dedicated content team and have the ability to ‘seed’ (promote through authentic user-style content)"—making it more suitable for top-tier brands, chain restaurants, and internet-famous stores.
According to Qichacha (a Chinese enterprise data platform), as of March 2025, the total number of catering-related enterprises in China stood at 16.89 million, with the catering chain rate at only about 20%. Small and medium-sized "long-tail" merchants account for 80% of the market.
In the past, most of these long-tail merchants lacked dedicated content teams, the ability to create promotional content, and the skills to navigate complex ranking marketing. Unable to compete for traffic or secure orders, they could only passively wait for customers.
Gaode’s Street Sweeping Rankings, however, offers multi-dimensional categories such as "Repeat Customer Rankings," "Locals’ Favorite Rankings," "Down-to-Earth Eatery Rankings," and "Tire Wear Rankings" (referring to eateries frequented by drivers). As long as small, down-to-earth eateries offer authentic flavors and consistent quality, they have a chance to make the rankings—just like Kaixin Restaurant.
Merchants offering takeout are also eager to find new opportunities on Gaode.
A manager of a Chinese fast-food chain once compared profit margins: in-store dining maintains a profit margin of 20%-40%, but takeout margins are usually only 10% after accounting for commissions, delivery fees, packaging costs, and promotion expenses. "If we participate in platform events, margins can drop to 5% or even lower."
"We plan to fully onboard all our stores onto Gaode. First, to increase the share of in-store dining (which has higher profit margins), and second, because Gaode is a new platform still in its bonus period," the manager explained, citing practical considerations.
What’s more, Gaode has promised that the Street Sweeping Rankings will never be commercialized, waiving the first-year onboarding fee for all catering merchants and providing a range of support services, including traffic subsidies, dedicated customer service, and intelligent cash registers. "No costs, low thresholds, and great potential," the manager summed up.
Gaode’s Four "Trump Cards" for Its Counterattack
Facing Gaode’s Street Sweeping Rankings is Dianping—a veritable "living fossil" of China’s internet industry. Launched in 2003, Dianping predates Meituan by 7 years, Xiaohongshu and Douyin by over a decade, and even Yelp (the U.S. equivalent) by 1 year.
As a latecomer, how does Gaode plan to compete against Dianping, which has a 20-year head start?
Gaode’s first trump card is its "high-demand entry point + massive user base."
Mapping apps are likely the only daily-use applications with demand second only to WeChat. Currently, Gaode has over 170 million daily active users (DAU), while as of August 2025, Dianping’s DAU stood at approximately 32.6057 million. Roughly calculated, Gaode’s user base is about six times that of Dianping.
Gaode now covers over 7 million catering locations nationwide, with approximately 120 million AI-powered searches related to lifestyle services every day and over 13 million destination locations for navigation-to-store trips. Clearly, when consumers open Gaode for navigation, they often have implicit consumption intentions. In the closed loop of "decision-making via rankings → navigation → in-store consumption," merchants typically achieve higher conversion rates.
The National Day holiday, in particular, is both a peak travel period and a peak for catering consumption. Gaode’s timing in launching the Street Sweeping Rankings during this window is quite strategic.
Another easily overlooked factor is the shrinking lifecycle of catering merchants.
China Catering Industry Annual Observation and Big Data 2025 shows that among merchants that exited online operations in 2024, 64.3% had been in business for less than two years. Overall, the average lifecycle of catering merchants has shortened from 2.1 years in the past to just 15 months.
A market dominated by new merchants has weakened Dianping’s "first-mover advantage."
Trust is also a crucial asset.
Dianping’s rating system serves as a decision-making reference for users, and authenticity should be its bottom line. However, since ratings directly impact merchants’ interests, fake reviews and ranking manipulation have become widespread. Many merchants actively incentivize positive reviews: "Leave a like and a good review, and you’ll get free dishes, drinks, or snacks."
For users, this inflated, manipulated rating system has lost credibility—which is why many young people have begun "reverse seeding" (promoting) restaurants with low ratings (around 3.5 stars). For merchants, this leads to "adverse selection," where unqualified businesses outcompete quality ones.
To address this, Gaode has integrated real navigation behavior data and Alipay’s Sesame Credit system. While this may not completely eliminate fraud, it significantly increases the cost of manipulation and guides "reviews" back to authenticity.
Additionally, Alibaba’s determination to expand into the "in-store" service sector and its "team battle" model are highly impactful.
"Ele.me (Alibaba’s food delivery platform) was suppressed by Meituan for years, but after Alibaba invested real resources for a few months, Ele.me was able to compete head-on with Meituan," the Chinese fast-food chain manager asserted. "Alibaba is also determined to win the ‘in-store’ battle—so the earlier we join Gaode, the better."
Alibaba’s resolve is evident in Jiang Fan’s (Alibaba executive) public statement: "Taobao Flash Sale now has 150 million daily active users, and many of these users have needs for in-store pickup and group buying."
Furthermore, Xu Hong, Alibaba’s CFO, mentioned in an interview with Xinhua News Agency that the digitalization rate of China’s catering industry is currently only 20%. "This represents a huge growth opportunity for us. We estimate that within 2-3 years, the new service e-commerce market will reach a scale of over 10 trillion yuan (approx. $1.4 trillion)—this is the potential domestic demand market we aim to unlock with a 50 billion yuan (approx. $7 billion) investment."
Gaode’s own commitment is also reflected in its investments. Beyond subsidies and support for merchants, Gaode has been generous in offering consumer coupons: "200 million yuan in ride-hailing coupons + 9.5 yuan consumption vouchers," which simultaneously drive both ride-hailing and in-store traffic.
Compared to the "home delivery" business, the "in-store" sector does not rely on a massive delivery fulfillment network, so the barrier to entry is relatively lower, and latecomers have a higher chance of success—giving Alibaba a better shot at winning.
Moreover, Alibaba is fighting the "in-store" battle with a "team approach." On September 20, Taobao Flash Sale officially launched its in-store group buying service, initially covering three cities including Shanghai and focusing on catering. It plans to expand nationwide subsequently. Gaode’s Street Sweeping Rankings focuses on "seeding and traffic attraction," while Taobao Flash Sale focuses on "transaction conversion"—creating strong synergy between the two.
The "home delivery" and "in-store" businesses can also interconnect: for example, the massive merchant resources accumulated in the delivery sector can be seamlessly migrated to the in-store and ranking services. Within Alibaba’s ecosystem, merchants can efficiently leverage both home delivery and in-store channels simultaneously.
Can Gaode Replicate Google Maps’ Success?
Gaode’s battle is one that Google has already fought—and won.
From launching a Yelp-like service in 2011 to surpassing Yelp in the total number of local merchant reviews by 2016, Google Maps achieved a decisive victory in just five years.
Reviewing the business war between Google Maps and Yelp offers valuable insights for predicting the outcome of Gaode’s current offensive.
Google’s first blow to Yelp was in traffic control.
By 2015, Google Maps already had 1 billion global users, while Yelp’s app had only around 30 million monthly active users (MAU) at the time. Even when adding its mobile web and PC users (70 million), Yelp’s total MAU was only about 100 million.
More critically, 75% of Yelp’s traffic across all channels came from Google Search redirects—meaning Google held Yelp’s traffic lifeline.
Trapped in this dependent position, Yelp could do little but complain in its earnings reports: "Google previously modified its algorithm, leading to a slowdown in our traffic growth—especially in international markets with less content and more competition."
Google’s second blow was in new features and technology.
Google did not launch its Yelp-like product (initially called HotPot, later renamed Google Places) until 2011—seven years later than Yelp. Yelp’s biggest competitive advantage as a first-mover was its UGC (user-generated content) model of user reviews and notes.
As a latecomer, Google took two steps to make up for this gap:
It leveraged technological advancements to integrate more structured data (such as navigation and Street View) to compensate for the lack of UGC data.
It imported social connections from Google+ to add a social layer to the product, allowing users to see reviews from friends. Compared to reviews from strangers, friends’ recommendations were far more credible—offsetting Yelp’s advantage in UGC review volume.
The first step mirrors Gaode’s integration of navigation data into its Street Sweeping Rankings; the second is analogous to Gaode’s use of the Sesame Credit system.
Google’s third blow targeted reducing merchant costs and improving efficiency.
Yelp achieved quarterly profitability for the first time in 2012, but by then, small and medium-sized merchants were growing increasingly dissatisfied with the platform:
They complained that Yelp’s excessive commercialization undermined the fairness of its review system.
They criticized Yelp’s outdated marketing model, which relied mainly on CPC (cost-per-click) and CPM (cost-per-mille) pricing—less effective than CPS (cost-per-sale). Many merchants felt their return on investment (ROI) from Yelp promotions was too low.
Google seized this opportunity by:
Lowering merchants’ marketing costs—Google’s CPC rates were lower than Yelp’s, attracting a large number of merchants to switch.
Upgrading its marketing system to make merchants’ promotion results quantifiable and trackable.
This strategy is nearly identical to Gaode’s approach today: from waiving onboarding fees for merchants to offering generous consumer subsidies, Gaode is reshaping the profit distribution mechanism to poach merchants and users.
With these three blows, Yelp was left with no way to fight back. By 2016, it had been overtaken by Google Maps.
Of course, Dianping is not standing still like Yelp; it has continued to optimize its services. For example, it launched a "public supervision mechanism," encouraging users to report merchants that engage in irregular practices (such as offering gifts for good reviews) with a single click. It also discourages merchants from manually soliciting reviews in-store. These measures aim to restore authenticity and clarity to its review system—alleviating the "positive review rat race" among merchants while preventing excessive merchant interference in user decision-making.
Looking back at the two offensives launched by mapping apps in China and the U.S., the paths are strikingly similar. History does not repeat itself exactly, but it often rhymes. There is nothing new under the sun—and it is entirely possible for Gaode to replicate Google Maps’ success and win this battle.
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