China’s largest food delivery platforms, including Meituan, Ele.me, and JD.com, on Thursday jointly pledged to rein in aggressive subsidy practices and promote fair competition, signaling a potential end to a months-long subsidy war that has gripped the industry.
Why it matters: The pledges mark a rare public truce after months of cutthroat subsidy wars fueled by JD.com’s entry into the market. Regulators had grown increasingly concerned over irrational pricing, labor exploitation, and merchant coercion.
Details: The platforms issued detailed statements pledging reforms in pricing, merchant relations, and labor protections, aligning with government calls for fairer market practices.
- Meituan, the country’s dominant delivery platform, published a five-point statement vowing to eliminate improper promotional tactics. The company pledged to comply with China’s Anti-Monopoly Law and Anti-Unfair Competition Law by not pricing goods or services significantly below cost, to disclose subsidy details without exaggeration, and to avoid coercing merchants into participating in promotional events. Meituanalso said it would ensure fair access to promotions without disadvantaging small businesses and would work to improve riders’ protections while promoting a healthier balance between delivery and dine-in businesses.
- On the same day, Alibaba’s Taobao Instant Commerce and Ele.me also issued a joint statement outlining four key commitments: designing subsidies reasonably while respecting merchants’ rights to information, choice, and pricing; cracking down on irrational promotions like “zero-cost purchases”; improving service quality while promoting green and rational consumption; and fostering a cooperative ecosystem through merchant consultations and feedback mechanisms.
- JD.com, whose bold entry into the food delivery sector earlier this year triggered the current subsidy battle, similarly promised to regulate subsidy practices, resist predatory pricing, and ensure transparency in marketing campaigns. JD said it would not use transaction volume as a proxy for market dominance and would instead compete on product quality and service. It also pledged to support merchants with commission rebates, advertising incentives, delivery subsidies, and improved after-sales support.
Context: The announcements follow a July 18 meeting with the State Administration for Market Regulation (SAMR), which urged the companies to comply with competition and food safety laws and to foster a win-win ecosystem for consumers, merchants, couriers, and platforms.
The delivery war, which escalated over the past four months, was driven in part by JD.com’s push to challenge Meituan’s long-standing dominance in the sector.
- JD.com’s aggressive pricing strategies ignited intense competition, with daily orders on platforms such as Taobao Instant Commerce and Ele.me reportedly surpassing 80 million. The battle once led to the rise of milk tea-related stocks while the decline of platform stocks.
Wang Puzhong, CEO of Meituan’s Core Local Commerce once predicted the subsidy war could be ended in three ways: one side being completely defeated or acquired; a stalemate leading to mutual retreat; or intervention from a higher authority to force a truce. Judging by the current developments, the third scenario may be playing out.
