Core Viewpoint - The fierce competition in the food delivery market is leading companies to invest heavily, potentially reaching a total of 100 billion yuan for the year, despite regulatory pressures against such practices [1][3]. Group 1: Market Dynamics - Companies are investing real money to reclaim market share in a saturated environment, raising questions about the motivations behind these actions [3][12]. - The current situation is likened to a triathlon where competitors unexpectedly revert to the beginning, indicating a possible misjudgment in strategy [5][6]. - The competition is characterized as a zero-sum game, where losses are evident through declining stock prices and lack of synergy among firms [7][8]. Group 2: Regulatory Context - Regulatory bodies have previously intervened to halt aggressive subsidy practices in the market, yet companies are now re-engaging in similar behaviors [3][14]. - There is a contradiction in the actions of companies, as they engage in subsidy wars while also attempting to align with regulatory expectations [13][14]. Group 3: Strategic Insights - The actions of key players, particularly JD.com, are under scrutiny as they pursue multiple initiatives that require significant policy support, such as applying for stablecoin licenses [10][11]. - The competitive landscape suggests that while some companies may feel compelled to engage in price wars, others, like JD.com, may be acting on a different strategic rationale [12][26]. Group 4: Economic Implications - The current investment in subsidies could be interpreted as a response to government calls for stimulating consumption, positioning these actions as beneficial rather than detrimental [30][32]. - The narrative suggests that these subsidies might be viewed as a form of corporate social responsibility, contributing to economic recovery rather than merely fueling competition [30][31].

Core Insights - The article discusses the challenges and dynamics of the food delivery industry across different countries, highlighting the stark contrasts between the operational models and profitability of food delivery services in China compared to other regions like Mexico and Malaysia [1][2][3][4][7][8]. Group 1: Industry Dynamics - In Mexico, local restaurants thrive with a business model that includes high profit margins, with some achieving monthly gross profits exceeding 100,000 RMB [1]. - The food delivery market in China is characterized by intense competition, with platforms like Meituan, Ele.me, and JD.com battling for market share, leading to unsustainable pricing strategies [8][11]. - The average delivery fee in China is the lowest globally, while the delivery speed is the fastest, driven by a high population density and a fast-paced work culture [7][18]. Group 2: Profitability and Business Models - Meituan's food delivery business shows low profitability, with operating profit margins between 6% to 8% and net profit margins as low as 3% to 5% after accounting for marketing and R&D expenses [8]. - In contrast, food delivery services in Malaysia and Mexico report higher profit margins, with local restaurants managing to operate successfully despite higher commission rates [11][20]. - The article notes that many Chinese restaurants are resorting to standardized, semi-finished products to maintain profitability in a highly competitive environment [9]. Group 3: Labor and Compensation - The working conditions for delivery riders in China are described as harsh, with long hours and low pay, leading to a high turnover rate and a competitive environment among riders [16][19]. - In other countries like Malaysia and Singapore, delivery riders earn significantly higher wages, reflecting the local labor market conditions and the value placed on their work [20][21]. - The article emphasizes that the low wages and poor working conditions for riders in China are a result of intense competition and a market that has become accustomed to low prices [18][21]. Group 4: Consumer Behavior - Consumers in China have developed a habit of expecting low prices for food delivery, which has led to a cycle of price wars among platforms and restaurants [21][22]. - The article suggests that the expectation for cheap, fast, and good service is unsustainable, as it leads to compromises in food quality and service [21][24]. - The long-term implications of this pricing strategy could negatively impact the overall value perception of the food delivery industry and the broader economy [22][23].