Core Insights - The ongoing food delivery subsidy war is approaching a critical point, with expectations that it will shift back to competition based on supply and delivery capabilities [1] Industry Changes - The food delivery industry has seen a significant increase in daily order volume, reaching a peak of 140 million orders per day, primarily driven by subsidies in the beverage sector, particularly tea drinks, which accounted for 50% of orders at peak times [2][4] - Meituan maintains a stable market share in the food delivery sector, with its Gross Merchandise Volume (GMV) holding steady at around 70%, supported by a peak order volume of 90 million and a customer price that is 2-3 times higher than competitors [2][10] Future Outlook - The current subsidy-driven growth in beverage orders is expected to decline after the 618 shopping festival, leading platforms to refocus on essential daily needs and requiring improvements in supply richness, delivery efficiency, and cost management [3][16] - Analysts predict that after the subsidy phase ends, the retention of the additional 40 million daily orders generated will need to be evaluated over a longer period [9][20] Competitive Landscape - The competitive landscape remains relatively stable, with Meituan, Taobao, and JD.com holding market shares of approximately 70%, 20%, and 10% respectively, despite new entrants and aggressive subsidy strategies [10][11] - Meituan's strategy has been to focus on essential meal delivery rather than heavily subsidizing beverages, which has allowed it to maintain a healthier order structure and profitability [12][14] Operational Capabilities - The food delivery business requires high operational capabilities, including supply organization and delivery scheduling, to meet diverse consumer needs across different times and scenarios [18] - As the subsidy war subsides, platforms will need to build foundational delivery capabilities to sustain their business models and consumer engagement [22]

Core Viewpoint - The recent regulatory talks involving major food delivery platforms like JD, Meituan, and Ele.me highlight the urgent need for compliance and consumer rights protection in the face of fierce competition and unsustainable pricing strategies [1][11]. Group 1: Industry Competition - The food delivery market has seen aggressive subsidy wars, with JD committing over 10 billion yuan in subsidies, Meituan planning to invest 100 billion yuan over three years, and Ele.me launching its own subsidy campaign [3][5]. - This intense competition has led to significant price reductions, with items being sold at astonishingly low prices, raising concerns about the sustainability of such pricing strategies and the potential for market monopolization [5][7]. - The platforms are accused of using algorithms to enforce "choose one" practices, limiting merchants' ability to operate on multiple platforms, which raises concerns about fair competition and consumer rights [5][12]. Group 2: Consumer and Merchant Rights - Reports indicate that some merchants on JD's platform have engaged in fraudulent practices, such as falsifying business licenses, which poses a serious risk to food safety [7][12]. - Consumers have reported discrepancies in food quality and quantity, particularly when using subsidies, leading to dissatisfaction and concerns over the integrity of the service [7][13]. - Merchants are also feeling the pressure, as they often have to share the burden of subsidies, leading to negative profit margins in some cases [8][13]. Group 3: Regulatory Response - The regulatory bodies have emphasized the need for platforms to adhere to laws such as the E-commerce Law and the Anti-Unfair Competition Law, aiming to establish clear responsibilities and prevent monopolistic practices [12][19]. - The talks aim to ensure that platforms improve their complaint mechanisms and provide better protections for consumers, merchants, and delivery personnel [13][16]. - The regulatory push is expected to reshape the competitive landscape, moving from price wars to a focus on service quality and compliance [17][20]. Group 4: Future Industry Direction - The regulatory discussions mark a pivotal moment for the food delivery industry, steering it towards sustainable development and compliance rather than unchecked growth [20][22]. - The industry is expected to adopt new technologies for better oversight, such as blockchain for tracking food safety and algorithm monitoring to prevent price discrimination [19][20]. - Long-term goals include establishing service standards for delivery platforms to balance market innovation with social responsibility, ensuring a fair ecosystem for all stakeholders [20][22].

Core Viewpoint - The Chinese government is taking regulatory action against major food delivery platforms like JD, Meituan, and Ele.me due to intensified competition and concerns over unfair practices in the industry [1][3]. Regulatory Actions - The State Administration for Market Regulation, along with other government departments, has urged platforms to comply with laws such as the E-commerce Law and the Anti-Unfair Competition Law, emphasizing the need for fair competition and consumer protection [1][3]. - The recent discussions were prompted by JD's entry into the food delivery market and aggressive subsidy strategies from various platforms, leading to a competitive environment that raises concerns about market order [1][2]. Market Competition - The food delivery market is experiencing a "subsidy war," with platforms offering significant discounts to attract consumers, resulting in a surge in order volumes for certain food categories, particularly during holidays [2][3]. - Some restaurant owners report that while order volumes have increased, the profitability from these subsidized orders is low, leading to operational challenges [2]. Impact on Delivery Riders - The increase in order volumes has put pressure on delivery riders, leading to longer working hours and safety concerns, with reports of accidents and emotional distress among riders due to the high demand [3]. - Some riders are taking on multiple platform jobs to manage the workload, indicating a shift in the labor dynamics within the industry [2][3]. Future Outlook - Analysts predict that the regulatory discussions may lead to a reduction in the intensity of competition among food delivery platforms, potentially resulting in adjustments to subsidy strategies [4][5]. - There is a belief that while competition should be encouraged to stimulate consumption, it must be balanced with regulatory oversight to prevent market chaos and protect consumer rights [5].

Core Viewpoint - The article discusses the competitive strategies of Ele.me in the ongoing food delivery war, emphasizing that Ele.me is strategically choosing when and how to engage in aggressive promotions rather than simply following competitors' actions [3][4][11]. Group 1: Ele.me's Strategy - Ele.me has started issuing large coupons, making products cheaper than supermarket prices, indicating a shift to a more aggressive marketing strategy [7][14]. - The company previously refrained from aggressive competition while rivals were heavily engaged in price wars, allowing Ele.me to benefit from the situation without incurring costs [11][13]. - The current strategy aims to force competitors to incur losses by increasing their promotional efforts, thereby shifting the focus back to pricing [14][15]. Group 2: Market Dynamics - The competitive landscape has changed, with Ele.me seizing the opportunity to act now that competitors are showing signs of fatigue in their promotional efforts [14][15]. - The article highlights that the logic of competition has shifted from profit margins to relative losses, where Ele.me is willing to incur losses if it can cause greater losses for its competitors [15]. - Ele.me's historical resilience in past market battles is noted, suggesting that the company is not intimidated by the prospect of increased competition [15]. Group 3: Consumer Impact - The article emphasizes that consumers should focus on protecting their wallets by taking advantage of the ongoing competition and choosing the cheapest options available [17]. - It encourages consumers to support the competition among delivery services, as this will ultimately benefit them through better deals and promotions [17].