In China, the ongoing delivery wars that have lasted for months have been called to a halt by various parties, but the promotions from the three major delivery platforms continue, albeit in a more subdued manner. Experts believe that in the context of China’s slowing economy, the outbreak of price wars in various industries is not a coincidence, and the outcome is short-term gain but long-term damage.
On July 19, two local catering industry associations – the Shandong Cooking Association and the Luoyang Catering and Hotel Industry Association – issued a joint initiative, urging the delivery platforms of JD.com, Meituan, and Alibaba to cease irrational subsidies. Over 10 provincial catering associations in China have released similar initiatives. On July 18, the State Administration for Market Regulation once again summoned the three delivery platforms, demanding standardized promotions and rational competition.
Compared to the frenzy of the previous weeks, this past weekend on the 19th (Saturday) and the 20th (Sunday) saw a relatively calm period. According to financial reports, the aggressive tactics like “buy with zero cost” have largely disappeared, but various big discount coupons are still in play, keeping the competition intense.
On Meituan’s platform, there are still offers like “spend 22 get 11 off,” “spend 48 get 19 off,” while on Taobao’s Flash Sale page, there is a red packet offer of “spend 58 get 18.8 off.” In addition, Taobao’s Flash Sale is hosting a 188 yuan coupon pack event during five time slots: breakfast, lunch, afternoon tea, dinner, and late-night snacks. Delivery orders are still booming, with on-site businesses looking unusually busy.
Tianjun Economic and Political Researcher Song Weijun told the Epoch Times on July 20: “With China’s economy contracting and consumer spending weak, the outbreak of price wars in various industries is not accidental. This is the result of multiple factors stacking up: grabbing market share, capital return pressure, and misleading signals from the CCP’s consumer promotion policies.”
China’s Economy is on a downward trend, and the government has been rolling out policies to “expand domestic demand and boost consumption,” creating waves across various industries. However, companies are not profitable. According to Goldman Sachs, the total investment of the three companies in just one quarter of June reached 25 billion yuan. Goldman Sachs predicts that Alibaba’s delivery business will incur a loss of 41 billion yuan in the next 12 months, JD.com a loss of 26 billion yuan, and Meituan’s EBIT profit will drop by 25 billion yuan.
The delivery wars in China began when e-commerce giant JD.com entered the delivery market in February. JD.com announced on April 10 that they would launch a 10 billion yuan subsidy program, investing over 10 billion yuan within a year. JD.com’s founder, Liu Qiangdong, even personally delivered food in April, inviting delivery riders to dine with him.
By the end of April, Alibaba upgraded its Taobao Flash Sale service to enter the delivery battleground. On July 2, Alibaba’s Taobao Flash Sale (Ele.me) announced a massive subsidy plan of up to 50 billion yuan, intending to provide direct subsidies to consumers and merchants through distributing large red envelopes, free order cards, and official subsidies for one-price goods over the next year.
Meituan’s response was not to be outdone. On July 5 (the first weekend of the summer consumption peak), Meituan released multiple versions of no-threshold gift coupons concurrently with Alibaba, such as “spend 25 get 21 off,” “spend 16 get 16 off,” “spend 18 get 18 off.”
The delivery wars that have persisted for months among the three major delivery platforms have been dubbed the largest subsidy war in China’s internet history.
Miyasita Kiyokawa, a Japanese political commentator familiar with China’s financial and political systems, told the Epoch Times on July 20: “The driving force is simple. These companies, in order to ensure revenue growth, have naturally turned to the ‘low-end’ market after the ‘high-end’ route proved ineffective.
“Especially for Chinese listed companies, if there is no growth, financing could become problematic. Once financing becomes an issue, there is a risk of fund chain rupture and default.”
Kiyokawa also mentioned the official launch of Baidu Delivery in 2014. Wang Puzhong, the current commander of the Meituan’s delivery war, joined Meituan Delivery in April 2015 after resigning from Baidu Delivery in April 2015, where he was dubbed the “number one employee of Baidu Delivery” by the Chinese media.
At the time, Baidu Delivery made a rapid entry into the top three in the industry with strong support from Baidu. Following the successful financing of Meituan Delivery and Ele.me, a fierce subsidy war ensued, but Baidu Delivery did not join in. Alongside other mistakes, Baidu Delivery quickly lost market share, ultimately being acquired by Ele.me for $800 million in August 2017.
Meituan currently holds the largest market share in the delivery market. Its financial report for the first quarter of 2025 shows a 39.1% increase in after-tax profit in the “core local business” sector.
However, Song Weijun said: “These are mainly pre-price war data. Now, with the price war in full swing, although user growth may accelerate, gross profit is significantly compromised, which will drag down short-term profit performance and even affect the annual revenue expectations. The capital market is sure to react sensitively.”
A report released by UBS today suggests that all delivery platforms in July may have fallen into losses.
Moreover, with the “buy with zero cost” concept combined with various discounts and vouchers, the subsidy war among the three major delivery platforms has begun to impact small businesses. Some small businesses have stopped participating in platform promotions, fearing that their own operations might become unsustainable. How does this affect ordinary people?
Song Weijun said, “For ordinary users, in the short term, they can indeed enjoy cheaper delivery and courier services, reducing their daily living costs. However, in the long run, if the industry reshuffle ends and prices return to normal, service quality drops, or small businesses are squeezed out, in the end, ‘it’s the sheep that pay the price.'”
“Therefore, while common people benefit in the short term, the long-term viability depends on whether the industry can move towards sustainable and healthy development in the competition. Many industries in China are currently in a state of malignancy, commonly known as ‘internal roll,’ resulting in short-term gains but long-term losses.”
One netizen ordered 6 cups of milk tea for free, cheering, “All free! Post-00s are also catching up with the era’s bonus,” and commented, “Thanks to the business war.” Some netizens said, “The only era bonus that post-00s like me have enjoyed so far is the ‘delivery war.'”
Another netizen expressed concern that they might not be able to accept meals over 10 yuan and drinks over 5 yuan in the future. This is exactly what worries businesses: subsidies break the consumer price bottom line, and it may be difficult to recover once the subsidies stop.
There are more rational voices appearing in online comments, such as having a full refrigerator leads to unrealistic consumption, and noticing reductions in delivery portions.
Kiyokawa also mentioned concerns about food safety. He stated, “In the background of economic recession, even with short-term subsidies, there are limited improvements in quality of life, not to mention issues with food safety. Once the subsidy trend ends, prices will return to their original levels.”
The delivery platform war has now had societal impacts. Some humorously remark that the world is too topsy-turvy, with people across the country working late into the night on Saturday ordering delivery.
“Biao Jianxiang Talks Culture” commented on the delivery platform war, saying, “We have no moral requirements for ourselves, which means no principles, and no principles mean no unified opinions. It’s easy to be controlled by platforms one by one. Therefore, individuals or businesses, platforms’ greed is not the main reason; it’s the society abandoning the norms of Laozi and the righteousness of Confucius.”