Group 1: Core Insights - The article highlights the paradox of the subsidy war in China's food delivery market, where riders earn more at the expense of merchants' profits [4][6][12] - It emphasizes the dual nature of subsidies, acting as both a lifeline and a poison for businesses, leading to unsustainable practices [4][6] - The competition between platforms like Meituan and JD.com is characterized by aggressive price wars, resulting in significant profit compression for merchants [7][11] Group 2: Market Dynamics - The article contrasts the Chinese delivery model with the U.S. model, noting that U.S. platforms like DoorDash achieve profitability through technology and efficient cost management, while Chinese platforms rely heavily on subsidies [9][11] - It points out that the average commission rates for Chinese platforms exceed 22%, compared to a stable 15% for U.S. counterparts, indicating a less sustainable business model in China [9][11] - The report from Morgan Stanley suggests that the gross merchandise value (GMV) in China's instant retail market may be inflated by 30%, raising concerns about the market's health [9] Group 3: Challenges and Risks - The article discusses the operational challenges faced by delivery platforms, such as high loss rates due to strict supply chain demands, which are exacerbated by the subsidy model [6][12] - It mentions that the pressure to deliver quickly can lead to dangerous working conditions for riders, highlighting the human cost of the current business practices [6][12] - The article warns that without technological innovation, the current subsidy-driven model could collapse under its own weight, threatening the entire ecosystem [6][12] Group 4: Recommendations for Improvement - The article suggests that platforms should adopt supply chain upgrades and innovative practices, such as the "central kitchen" model used by DoorDash, to reduce waste [13] - It advocates for a reform in profit distribution, proposing a more equitable model that avoids zero-sum competition among platforms, merchants, and riders [14] - The article calls for government intervention to regulate subsidies and promote technological advancements, which could lead to a healthier market environment [15] Group 5: Future Outlook - The article concludes that the true victims of the subsidy war are small businesses, which are caught in the crossfire of capital-driven competition [16] - It emphasizes the need for platforms that can sustainably generate profits for small merchants to succeed in the long run [16] - The future of the industry lies in innovation and a more inclusive ecosystem, rather than continued price wars [16]

Core Viewpoint - The intense competition among major internet companies like Meituan, Alibaba, and JD.com in the instant retail sector is leading to unsustainable subsidy wars, which may result in resource wastage and long-term negative impacts on the industry [1][2][4] Group 1: Impact on Consumers - Consumers are experiencing a surge of attractive offers such as "0 yuan milk tea," but this has led to instances of wasted resources, with many orders going unclaimed [1] - The phenomenon of "fake demand" is emerging, where consumer impulsiveness driven by subsidies does not translate into actual consumption [1] Group 2: Impact on Delivery Workers - Delivery workers are facing increased workloads due to the surge in orders, with some reporting delivery counts as high as 80 to 100 orders in a single day, leading to potential health risks [1][2] Group 3: Impact on Small Businesses - Small businesses may benefit from increased traffic due to platform subsidies, but they also bear part of the subsidy costs, leading to situations where order volume increases without corresponding revenue growth [2] - The influx of orders can degrade service quality, negatively affecting consumer perception and long-term brand viability for small businesses [2] Group 4: Impact on Platforms - Platforms are under significant financial pressure due to high subsidy costs, which could lead to short-term profit declines and potential stock price impacts [2] - For instance, Morgan Stanley estimates that Alibaba's investment in related businesses has reached approximately 10 billion yuan, with further increases expected, raising questions about the sustainability of this subsidy model [2] Group 5: Broader Industry Implications - The ongoing subsidy wars are affecting the entire retail ecosystem, with competitors like Pinduoduo and Kuaishou potentially feeling the pressure to join the fray, which could lead to further industry "involution" [3] - The focus on order volume growth over value creation could undermine the long-term benefits for consumers, delivery workers, businesses, and platforms alike [3][4] Group 6: Recommendations for Sustainable Growth - To avoid a detrimental cycle of competition, platforms should prioritize technological innovation and service quality rather than relying solely on price-based strategies [3][4] - Regulatory bodies and industry associations should implement reasonable policies to mitigate the negative effects of excessive competition, ensuring consumer rights and protecting the interests of small businesses and delivery workers [3][4]