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CNBC AI News, July 16 – Meituan’s core local commerce CEO, Wang Putao, addressed the burning question of when China’s intense food delivery “war” will finally cease. Quoting concerns voiced on Weibo, Wang acknowledged user anxieties, noting, “Some users are worrying about when it will stop – not because they want it to stop, but because they hope it won’t!” This reflects a complex consumer sentiment fueled by the ongoing subsidies and promotions.
He also noted pushback from businesses: “Many merchants are appealing, saying this ‘war’ isn’t good. It’s tiring for their employees, and preparing ingredients is difficult.” Wang suggested a path to resolution: “I think everyone needs to return to normal business judgment, return to rationality, and then it can stop. Right now, everyone is in a state of irrational excitement.”
Drawing historical parallels, Wang outlined potential endgame scenarios. “Historically, wars have several outcomes. One is that one side is annexed or completely defeated. Another is that the two sides reach a stalemate and then negotiate a truce, both sides feeling a little impulsive and starting to slowly withdraw. For example, there was the fight between Didi and Kuaidi, with Pony [Ma Huateng, Tencent CEO] and Jack Ma trading barbs. But we probably can’t go back to that stage.” He posited a third possibility: “A force from a higher dimension emerges, telling you all, ‘Enough fighting, that’s enough.'”
Wang acknowledges the immediate imperative: “When a war has just begun, you can only fight it well first. But I believe that the current environment certainly does not support this kind of irrational warfare.”
Industry insiders point out a deeper game at play. The delivery “war” is merely a surface manifestation of the platforms’ battle for dominance in the instant retail arena. By using subsidies to attract consumers and accustom them to the convenience of 30-minute delivery, platforms aim to shift consumer reliance away from traditional e-commerce and toward instant retail.
While this delivery battle has resulted in a short-term surge in rider orders, numerous consumer coupons, and even “free” purchases, the long-term sustainability of such heavy subsidization is in question. New and old delivery platforms, as well as merchants within those platforms, simply cannot absorb the massive costs of these subsidies indefinitely. The economic benefits reaped by riders and consumers will likely prove fleeting in the long run.
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