Meituan

The trending “Free Bubble Tea is Gone” hashtag on Weibo signals a potential shift in China’s food delivery market. Intense subsidy wars between giants like Meituan and Ele.me led to rock-bottom prices, but the State Administration for Market Regulation (SAMR) has intervened, urging a more sustainable competitive approach. Experts question the long-term viability of aggressive discounts, suggesting that neither platforms nor merchants can indefinitely bear the financial burden of these “delivery wars,” which aim to dominate China’s local services market.

China’s SAMR summoned executives from Ele.me, Meituan, and JD.com, emphasizing compliance with laws like the E-Commerce and Food Safety Laws. Regulators urged responsible practices, standardized promotions, and fair competition to foster a healthy ecosystem. This follows heightened competition in the on-demand delivery sector, with platforms launching promotional campaigns. Meituan’s instant retail order volume reached 150 million on July 12th. Meituan CEO Wang Putao expressed reluctance towards the ongoing “delivery war”.

Meituan’s local commerce CEO Wang Putao addressed merchant concerns about high commission fees in China’s competitive food delivery market. Merchants perceive commissions around 20%, while Meituan claims effective rates are 6-8%. The discrepancy stems from combining technical service fees (commissions) and delivery service fees. Wang explained that a significant portion of the 20% goes to subsidizing delivery costs, not platform revenue. He also clarified that marketing expenses are largely merchant-driven subsidies, not fees to Meituan, and the issue is low average order values during the “delivery wars”.

Meituan’s Core Local Commerce CEO, Wang Putaozhong, revealed the food delivery business operates on thin margins, with Meituan achieving a mere 4% profit margin last year. Growth stems from scaling, not margin expansion. He highlighted the complexity and low per-order profits, contrasting Meituan’s 3% operating profit margin with the struggles of competitors like DoorDash, despite higher commissions. Satisfying merchants, riders, the platform, and consumers presents a constant challenge, making substantial profit margins unrealistic.

Meituan’s local commerce CEO, Wang Putao, addressed concerns about China’s food delivery “war,” acknowledging user anxieties and merchant fatigue caused by intense competition and subsidies. He suggested a return to “rational business judgment” as a path to resolution. Wang outlined potential war-ending scenarios, including annexation, stalemate, or external intervention. Industry insiders view the delivery battle as a platform competition for instant retail dominance, but the long-term sustainability of heavy subsidization is questioned. The benefits for riders and consumers are likely temporary.

China’s on-demand delivery market is experiencing intense competition as Meituan, Fliggy (Alibaba), and JD.com engage in a subsidy war. This weekend saw a surge in promotional offers, benefiting consumers seeking immediate delivery services. The players are vying for market share by attracting users with heavily discounted prices and incentives. The long-term impact of this subsidy battle on the on-demand delivery landscape remains to be seen.

China’s food delivery platforms, Meituan and Alibaba’s Taobao, launched aggressive subsidies for coffee and bubble tea, creating online buzz with discounted and lottery-based free offers. This fueled intense demand, significantly boosting order volumes and delivery rider earnings (some exceeding $96/day), though raising concerns about rider welfare. Analysts see the subsidies as a strategic “online-offline fusion” push during peak summer, aiming to drive tens of billions in consumer spending across urban economies via estimated $7 billion in platform incentives.

Taobao Instant Delivery and Meituan engaged in an intense delivery war, offering deep discounts and subsidies. This aggressive competition led to a surge in orders for both platforms, benefiting merchants and delivery personnel. While stock prices saw initial dips, the overall impact suggests a dynamic market where new entrants can challenge established players. The rivalry highlights strategic differences, with Meituan focusing on food delivery and Taobao aiming for broader integration of online shopping and instant retail.

Alibaba and Meituan ignited a fierce food delivery price war with deep discounts, driving massive user traffic and causing temporary outages for Meituan. Goldman Sachs projects this competition to peak in September, potentially leading to significant losses for major players but a strategic gain in user engagement for cross-selling. Pinduoduo is positioned as an opportunistic winner by abstaining from the promotion war.

A man has been detained for 10 days for repeatedly defrauding food delivery couriers through fraudulent refund claims. He allegedly made multiple orders, then claimed non-delivery to illicitly profit. Meituan reported the user had 11 orders since April, with six flagged for suspected malicious compensation totaling 678.91 yuan. The platform is cracking down on such schemes, having intercepted millions of fraudulent attempts this year.