Group 1 - The central economic work conference has identified the "in-depth rectification of 'involutionary' competition" as a key task for economic work in 2026, continuing the "anti-involution" actions into the new year [1] - The Ministry of Industry and Information Technology, along with three other departments, held a meeting targeting irrational behaviors such as blind construction and low-price competition in the power and energy battery industry, aiming to regulate industry competition order [1] - "Involutionary" competition is characterized by low price, low quality, and low-level competition, which disrupts market signals, reduces resource allocation efficiency, and erodes long-term competitiveness of enterprises, ultimately hindering high-quality development [1] Group 2 - Since the 2024 central economic work conference proposed "comprehensive rectification of 'involutionary' competition," China has implemented a series of institutional constructions to guide key industries like steel, photovoltaics, and electric vehicles from low-quality involution to innovation and efficiency [2] - The National Development and Reform Commission plans to research and formulate regulations for the construction of a unified national market, while the State Administration for Market Regulation aims to promote amendments to foundational laws such as the pricing law to enhance the legal and policy tools against "involutionary" competition [2] - To effectively address "involutionary" competition, industries and enterprises must accelerate reforms, eliminate outdated momentum, and shift towards efficiency and innovation, thereby creating a true "moat" for their development through technology, branding, and service upgrades [2]

Core Viewpoint - The competition in the tea and coffee delivery market has intensified due to aggressive subsidies from platforms, leading to concerns about "involutionary" competition characterized by low prices and low quality [3][5][6] Group 1: Involutionary Competition - Involutionary competition is defined as "low-price, low-quality competition," where businesses are forced to lower product quality to compete [5][6] - This phenomenon is prevalent in platform economies, where platforms influence market dynamics, compelling merchants to engage in price wars [6][12] - The ideal competitive progression in an industry should move from price competition to differentiation and ultimately to innovation, but involutionary competition traps businesses at the price level [5][6] Group 2: Market Dynamics and Consumer Behavior - The current focus of competition is on the instant retail market, which aligns with the preferences of younger consumers who favor immediate satisfaction [7][10] - Platforms are using substantial subsidies as a marketing strategy to attract users, effectively reallocating funds from traditional advertising to consumer discounts [9][10] - The surge in orders due to subsidies can overwhelm merchants, leading to operational challenges and potential declines in product quality [11][12] Group 3: Impact on Merchants - Merchants face a dilemma between maintaining quality and meeting increased demand driven by subsidies, which can lead to a cycle of low prices and low quality [11][12] - Small and niche businesses are particularly vulnerable to the competitive pressures created by platform subsidies, as they may not have the resources to participate effectively [12][14] - The initial focus of subsidies on larger brands can disadvantage smaller merchants, even when subsidies are made available to all [13][14] Group 4: Recommendations for Platforms - Platforms should focus on creating long-term value for both merchants and consumers rather than relying solely on price competition [15][16] - Effective use of data analytics to assist merchants in inventory management and demand forecasting can provide more substantial benefits than mere financial incentives [16] - Regulatory approaches should be nuanced, avoiding blanket restrictions while addressing specific issues faced by smaller merchants [17][18][19]