Bei Jing Shang Bao·2025-08-28 14:12Core Viewpoint - The intense competition in the food delivery sector has led to significant profit declines for major companies like Meituan and JD, highlighting the unsustainable nature of the "burning money" strategy in the industry [1][2]. Group 1: Financial Performance - Meituan reported an adjusted net profit of 1.49 billion yuan, a year-on-year decline of 89% [1]. - JD's net profit attributable to shareholders was 6.2 billion yuan, down 50.8% year-on-year [1]. - The fierce competition has resulted in profit declines amounting to tens of billions, with some estimates reaching hundreds of billions [1]. Group 2: Competitive Strategies - The food delivery war is characterized by substantial subsidies, which are seen as a hallmark of irrational competition among platforms [1][2]. - Despite regulatory pressures and commitments from platforms, aggressive promotional tactics like "zero yuan purchases" are diminishing but still prevalent [1][2]. - The competition has led to a chaotic environment for merchants, who face forced participation in subsidy schemes that disrupt their pricing strategies [2]. Group 3: Market Dynamics - The current competition reflects a shift in the internet industry towards a focus on user profitability and return on investment, moving away from user growth as the primary metric [2]. - The food delivery sector is viewed as a precursor to larger battles in the instant retail market, with the "burning money" approach failing to foster innovation or create additional value for the industry [2][4]. - The long-term sustainability of the business model is questioned, as excessive competition disrupts the pricing system and negatively impacts the experiences of merchants, consumers, and delivery personnel [3]. Group 4: Future Outlook - The food delivery war is expected to continue, but there is a call for more rational and innovative approaches to competition [4].