CNBC AI News – July 19 – China’s social media platform Weibo is buzzing with nostalgia as the hashtag “Free Bubble Tea is Gone” trends, marking a potential shift in the landscape of the country’s fiercely competitive food delivery market.
Reports indicate that the end of the free bubble tea promotion coincides with a cooling down of the subsidy war between major delivery apps. While discounts are still available, the generosity of last weekend’s deals has notably diminished.
The recent battle for market share saw heavyweights like Meituan and Alibaba’s Ele.me (via Taobao’s Flash Delivery service) doling out significant discounts. Meituan even greeted users with a prominent “¥0 Delivery Arrived” notification upon opening the app, offering near-free deliveries and pickup options.
However, the high-stakes subsidy game faced scrutiny. On July 18th, China’s State Administration for Market Regulation (SAMR) summoned Ele.me, Meituan, and JD.com, urging them towards a more rational competitive approach – hinting at concerns over the sustainability of the ongoing price war.
Industry observers point out that these so-called “delivery wars” are ultimately about securing users’ on-demand consumption and dominating the “last mile” of China’s booming local services market.
The long-term viability of such aggressive subsidy strategies remains questionable. Experts suggest that neither established nor emerging delivery platforms, nor the merchants within their ecosystem, can shoulder the immense costs indefinitely, especially considering that consumers and delivery drivers only reap short-term benefits.
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