JD(US:JD) Zhong Guo Xin Wen Wang·2025-08-10 00:41Core Viewpoint - The competition among food delivery platforms in China is cooling down following regulatory interventions, but the underlying issue of "involution" in competition remains a concern [1][2]. Group 1: Impact of Subsidy Wars - The recent subsidy wars led to a significant increase in order volume, but delivery riders reported heightened stress and physical exhaustion due to the intense workload [1]. - A mid-tier fast-food company's management noted a 12%-15% decline in dine-in customer traffic due to subsidies, with the proportion of delivery orders rising from 15% to 22% [1]. - Platforms are pressuring merchants to offer additional discounts, resulting in losses of approximately 8 RMB per order for some businesses, which could jeopardize the financial stability of small and medium-sized restaurants in the long term [1]. Group 2: Market Dynamics and Competition - Experts argue that excessive competition and "involution" harm market efficiency and fairness, with subsidies failing to cultivate genuine user habits or expand overall market size [2]. - The "Matthew effect" may be accelerated by subsidy wars, where financially strong platforms dominate the market, leading to increased market concentration [2]. - The dual nature of "involution" in platform economies is highlighted, where platforms compete for user traffic through large subsidies, while merchants are compelled to participate in these subsidies to gain visibility [2]. Group 3: Regulatory and Strategic Recommendations - Recommendations for government regulation include flexible enforcement, such as reminders to platforms to standardize competitive behavior, and utilizing existing legal frameworks to regulate predatory pricing [3]. - Platforms are advised to avoid short-sighted subsidy competition and instead pursue differentiated development strategies by enhancing service quality and technological innovation to gain competitive advantages [3].