“Looking forward to seeing substantive changes” Exclusive interview with Liu Jingjing, founder of Jiahe Yipin: After a year of the takeout battle, the pressure on merchants has not eased. The catering industry should focus on quality ingredients, service, and craftsmanship rather than competing on “9 yuan 9” deals.

Why the Takeout War Distorts Consumer Price Perception?

Reporter: Zhao Wenqi Editor: Yang Jun

“Seeing the article published by the Economic Daily, along with the repost by the State Administration for Market Regulation, to be honest, I felt quite excited, with mixed emotions.” On March 27, Liu Jingjing, founder of Jiahe Yipin, stated in an exclusive interview with the Daily Economic News, “It has been very tough, and I finally feel that the takeout war is about to usher in substantial changes.” A hint of emotion could still be heard in her voice.

As a veteran in the catering industry with over 20 years of experience in Chinese nutritious fast food, Liu Jingjing founded Jiahe Yipin in 2004. This fast food restaurant, centered around porridge, now has over a hundred stores. Last July, she was the first to raise a “genuine cry for help trapped in the takeout war” on social media, which sparked an uproar. At that time, the subsidy war between takeout platforms was in full swing, forcing merchants into a corner and continuously squeezing profits. Her voice acted like a stone thrown into a pond, bringing the industry’s “involution” competition pains into the spotlight for the first time.

Over the past year, Liu Jingjing has personally experienced the profound impact of the takeout war on the catering industry ecosystem. From the distortion of the pricing system to the exacerbation of food safety risks, from the helplessness of being forced into the competition to the difficulty of maintaining quality, she has felt the pain deeply.

Two days ago (March 25), the official website of the State Administration for Market Regulation reposted the Economic Daily’s commentary article titled “The Takeout War Should End,” pointing directly at how the escalating subsidy wars among takeout platforms have dragged the catering industry into a “low-price supremacy” trap. Now, with regulators clearly putting a stop to “involution” competition, she sees hope for the catering industry to return to rationality.

She told the Daily Economic News reporter that real competition in the catering industry should be a healthy contest of technological innovation, efficiency improvement, and service optimization, rather than a zero-sum game relying on capital.

(Liu Jingjing, founder of Jiahe Yipin. Photo provided by the interviewee)

“Very Tough”: Official Positioning, Catering Professionals Finally See Hope

“Everyone is very excited, feeling that it’s really not easy, and substantial changes are finally coming.” She admits that since she publicly spoke out last July, she and her peers have been looking forward to improvements in the survival conditions of catering businesses. During this time, there have also been government discussions, research, and the introduction of some regulations and standards, leading to some changes in the catering and takeout industries. This time, the official stance is very clear: “Takeout platforms should no longer engage in this subsidy war.”

“Whether it’s the pressure faced by catering merchants or the losses reflected in the financial reports disclosed by takeout platforms, it’s clear that the takeout war has a significant impact on all fronts. If this vicious competitive ecology continues, the catering industry could spiral further out of control.” In her view, the official’s renewed call is resolute and clear: they do not want to see this irrational “involution” subsidy war anymore. This is not only a relief for merchants but also a reassuring signal for the entire industry.

Notably, on the same day that “The Takeout War Should End” was released, Hong Kong tech stocks surged, with Meituan rising nearly 14%, JD.com up nearly 5%, and Alibaba increasing by 4.63%. Liu Jingjing believes that the positive response from the capital market indirectly confirms the market’s widespread expectation to “end the money-burning.”

“We hope to see some substantial changes,” Liu Jingjing said, “such as a fairer and more reasonable distribution of subsidy burdens between platforms and merchants, and rules regarding delivery fees.” She believes that although the zero-yuan purchase policy has basically been halted and the nature of subsidies from takeout platforms has changed, the pressure on merchants has not significantly eased, and in fact, it has even increased.

Now, with the regulatory signals becoming clear, she believes that platforms, merchants, and consumers can work together to promote a healthier and more sustainable industry ecosystem. This expectation represents the longing of catering professionals for spring after experiencing a harsh winter, as well as a deep call for the entire industry to return to rationality.

“Distorted Pricing System”: The Industry Pain Under the Takeout War

What has the takeout war really brought to the catering industry over the past year? Liu Jingjing describes its far-reaching impact as “ecological destruction.” In her view, the core issue of this war is that it has completely distorted the pricing system of the catering industry, triggering a series of chain reactions.

“The most direct impact is the destruction of the pricing system.” Liu Jingjing explains, “For example, the cost of a cup of milk tea might be more than a dollar, but through platform subsidies, you can drink it for just a few dimes. Over time, consumers will develop a perception that this product is only worth a dollar. When the subsidies are withdrawn and prices return to normal, they will feel that it’s not worth it, which actually suppresses their willingness to consume.” This distortion of consumer psychology is the most hidden and deadly harm of price wars. It transforms consumer expectations for food from “value for money” to “the cheaper the better,” fundamentally eroding the value foundation of the catering industry.

A deeper impact is that when merchants are caught in the vortex of low-price competition, their profit margins are severely squeezed, and the first thing to be sacrificed is often the quality of ingredients and food safety.

“All businesses need to survive. When profits are under pressure or even at a loss, the simplest and most costly area is ingredients.” Liu Jingjing said with concern, “Is it fresh meat or near-expiry meat? Is it chemically grown or organic? Is the oil reused or non-GMO? Without a reasonable pricing structure, quality will inevitably decline, and food safety risks will follow.” She bluntly stated that when a company’s survival becomes a problem, some irresponsible operators will naturally choose to “cut corners” with ingredients.

This pressure is not voluntarily borne by merchants. Liu Jingjing stated that in this war, merchants have become the “bullets” of the platforms. Platforms, through large-scale coupon issuance and guided subsidies for delivery fees, not only intercepted the dine-in customer flow of merchants but also forced them to bear most of the subsidy costs. What further puts merchants in a passive position is that the platform rules have shifted from “taking high” (selecting stores and pushing the higher subsidies to consumers) to “stacking,” where merchants’ own discount activities are added to the platform’s subsidies, leading to a completely uncontrollable final price for merchants and continuously rising subsidy costs. She lamented, “The reason I chose to speak out last July was that I saw the destructive impact of this reckless subsidization on the industry ecology. If it continues, there will definitely be a vicious backlash.”

Liu Jingjing believes this phenomenon of “bad money driving out good” puts merchants who genuinely focus on quality at a disadvantage, stifling the motivation for innovation and improvement. “When everyone is focusing on low prices, there’s no ability to enhance quality, let alone innovate. From dish development to how to apply the latest AI technologies in various aspects of catering, from ingredient traceability to health and nutrition, all require cost investment. If there are no profits, everything is just empty talk,” Liu Jingjing admitted.

“Expecting Spring”: Upholding Quality, Calling for Rational Competition

When asked by reporters whether they faced choices in the past year that required seizing platform traffic at the cost of quality, Liu Jingjing admitted that last year her team did experience pressure from reducing order volumes and rankings due to withdrawing from purely “wool single” activities, but she firmly believes that quality will ultimately win the hearts of consumers, and this is her conscience as an entrepreneur.

“We do not lower quality; instead, we are enhancing it. For instance, using organic grains to make porridge, non-GMO oil, and more organic-certified ingredients. At the same time, we are optimizing the supply chain internally and improving management efficiency, and the prices of some products have even been reduced by 20%.” Liu Jingjing told reporters that this persistence ultimately paid off, and after experiencing a decline in customer flow and reduced order volumes, the order volume of each store gradually rebounded, and the overall ranking rose to a historic high. Because consumers still value quality dining and healthy ingredients more.

However, she also admitted that the path of lowering prices has no lowest point, only lower, and that ensuring low prices without quality ultimately harms the brand. Good food at a reasonable price is what customers truly desire.

She told reporters that although Jiahe Yipin’s supply chain and management efficiency have improved, and costs have been minimized in the extreme environment of the takeout war, this should not be the norm in the catering industry. Besides “cost-cutting,” catering businesses should also have more profit space to invest in research and product innovation, but most catering businesses have not had the energy for this over the past year.

Now, with regulators clearly putting a stop to “involution” competition, Liu Jingjing sees hope for the industry to return to the right track. “If we can achieve ‘whoever runs the event pays, whoever enjoys the service pays,’ returning pricing power to merchants and letting consumers consume transparently, the entire industry can quickly recover, perhaps in two or three months to a healthy state,” Liu Jingjing expressed.

She envisioned an ideal scenario: restaurant pricing is reasonable and genuine; consumers choosing dine-in enjoy the atmosphere, social interaction, and visible reassurance; those opting for takeout pay clearly for the meal plus delivery fee, without having to navigate complex discounts and inflated coupons. “This way, everything is simpler and returns to its essence,” Liu Jingjing stated.

Having experienced the takeout war over the past year, looking back at the relationship between takeout platforms and catering businesses, Liu Jingjing remarked that takeout should be a beneficial complement to dine-in, not an erosion. She hopes that takeout platforms can provide more survival space for truly quality-focused catering businesses, breaking the “low-price supremacy” trap and rebuilding a consensus of “quality first.” In her view, traffic and algorithms should support those quality merchants that prioritize food safety, customer experience, and high repurchase rates.

“Platforms, between themselves and with merchants, are not zero-sum games; a win-win situation can be achieved. The future catering market will continue to grow, with consumers willing to confidently walk into restaurants and willing to pay for convenient takeout services. The (catering industry) market of over 5 trillion yuan could potentially reach 6 trillion or 7 trillion yuan; wouldn’t it be better to grow the pie together?” Liu Jingjing stated.

For catering businesses in the current new environment, she advises everyone to strengthen their internal capabilities and develop unique characteristics. “Unlike retail, catering is a differentiated competition; consumers do not eat at just one restaurant; they need to vary their culinary experiences and continually try different categories, so every catering brand has a chance to survive. If your brand can provide consumers with a unique experience and a clear positioning, making them remember and choose you, that is your intrinsic driving force for development,” Liu Jingjing said.

“The regulatory signals are already very clear: stop the involution and guide the industry towards technological innovation and service optimization transformation. I believe the catering industry will soon welcome a blossoming spring. When everyone stops competing over 9.9 yuan and 9.8 yuan but instead competes on ingredients, service, and craftsmanship, consumers will be the ultimate beneficiaries. This is not just a victory for the industry but a return of the city’s vibrancy and happiness,” Liu Jingjing said.

Daily Economic News