Cai Jing Wang·2025-08-04 12:17Core Viewpoint - The Chinese food delivery industry has reached a historic turning point as major platforms like Meituan, Taobao Shanguo (in collaboration with Ele.me), and JD.com jointly announced a commitment to regulate promotional activities and resist malicious competition, marking the end of the prolonged "delivery subsidy war" [1][3][8] Summary by Sections Price War Overview - The price war began in February 2025 when JD.com entered the food delivery market with a "100 billion subsidy + five insurances and one fund for riders" strategy, disrupting the duopoly of Meituan and Ele.me [1] - By July 2025, Meituan launched a "0 yuan purchase" campaign, leading to a surge in orders, with over 1.2 billion instant retail orders on the same day [1][2] Impact of Subsidy War - The subsidy war resulted in a significant increase in order volume, from an average of 100 million orders per day at the beginning of the year to approximately 250 million orders per day by mid-July [2] - However, this led to a dilemma for merchants, who faced increased orders but declining profits, and riders who experienced heightened workloads and potential burnout [2][5] Regulatory Intervention - In May 2025, the State Administration for Market Regulation (SAMR) began addressing the issue by urging platforms to avoid distorting competition through subsidies [4] - By July 18, SAMR reiterated the need for platforms to comply with various laws and regulations, promoting a healthy ecosystem for consumers, merchants, riders, and platforms [4] Industry Reflection and Future Direction - The joint statement from major platforms reflects a response to the chaotic subsidy situation and regulatory pressure, aiming to shift competition from price wars to quality and service [3][6] - Analysts suggest that the industry must move beyond reliance on subsidies to focus on efficiency and customer experience [6][8] Challenges Ahead - Despite the commitment to regulate promotional activities, challenges remain, such as unclear cost boundaries and the potential for platforms to circumvent regulations through cross-subsidization [7] - The SAMR has introduced guidelines to further regulate platform fees and encourage innovation, aiming for a sustainable business model that balances cost reduction and service enhancement [7] Conclusion - The end of the subsidy war signifies a shift towards rational competition, where success will depend on balancing user experience, rider protection, and merchant profitability, paving the way for a healthier growth trajectory in the food delivery market [8]