Regulators call for a halt; don't let "penny-priced takeout" drag down the entire industry | Yellow River Commentary

Ask AI · What industry crises are hidden behind the e-commerce delivery war that regulators have shut down?

“Have you gotten a freebie voucher from a food delivery platform in the past few days?” A question posed in a report by the Economic Daily revealed the real experiences of countless consumers over the past year. From “a one-cent milk tea” to “a three-yuan coffee,” the subsidy war among food delivery platforms once made users feel the benefits. However, this seemingly people-first, involution-style competition has finally come to an end under the regulators’ clear stance.

Recently, the State Administration for Market Regulation disclosed updates on its antitrust investigation into food delivery platforms, and reposted a commentary article by the Economic Daily titled “The Food Delivery War Should End” on its official website, clearly signaling that regulators will put a stop to the malicious competition among food delivery platforms.

The decisive regulatory move won a positive response from the market. Capital markets reacted quickly to news that the “delivery war” has been “snuffed out,” relevant sectors’ sentiment warmed up, and investors regained rational expectations. This fully shows that the market itself is also tired of an endless money-burning model and wants to return to healthy, sustainable competition. Regulatory intervention is not only about maintaining market order, but also about protecting the real economy and the consumer environment.

This is not only a way to draw a period at the end of involution-style competition, but also to press the “loss-minimization” button for the catering industry that has been dragged down by low prices.

Over the past year, the money-burning battle among food delivery platforms has only intensified. Alibaba, JD.com, and Meituan have cumulatively provided subsidies totaling as much as 80 billion to 100 billion yuan, and the intensity is on full display in financial report figures.

On the surface, this looks like platforms passing benefits to consumers and consumers getting real savings, but the underlying impact is worrying. The China Hotel & Restaurant Association noted that large subsidies have become an important factor constraining the growth rate of the catering industry. Industry insiders believe this war has directly “pushed dine-in average spending back 10 years.” In the price war, the catering industry has been forced to squeeze profits and sacrifice quality, and the whole industry has fallen into a vicious cycle of “you’ll die without subsidies, and you’ll get chaotic with subsidies.” And this involution-style competition ultimately drags down the “temperature” of the macroeconomy—against the backdrop of catering consumption accounting for nearly 30% of the CPI weight, the decline in catering prices directly pulls down the overall consumer price index, adding chill to a consumer market that was supposed to be warming up.

What’s worth pondering is that this money-burning battle is far more than a simple “platform passing benefits along.” It is a zero-sum game. Ultra-large platforms in areas such as e-commerce and retail have entered the fray across industries by leveraging strong capital and existing traffic advantages, buying market share with subsidies and dragging the food delivery industry into a vortex of “involution-style” low-price competition. This not only squeezes the survival space of small and medium-sized merchants, but also leaves those in the catering sector struggling in the tight squeeze of the price war. When corporate profits are as thin as paper, where do jobs come from? And where does wage growth come from? The bitter fruits of involution-style competition will ultimately be transmitted to every link of the industry.

Faced with this situation, the market regulatory authorities’ response has been swift and forceful. It is understood that the State Administration for Market Regulation has previously held multiple talks with food delivery platforms, and the State Council’s Anti-Monopoly and Anti-Unfair Competition Commission has also launched an investigation and assessment into the food delivery industry, pointing directly at involution-style issues such as “competing on subsidies, competing on prices, and controlling traffic.” Now, the State Administration for Market Regulation has clearly stated that it has moved into relevant platforms to conduct on-site investigations. Next, it will further transmit regulatory pressure through methods such as questionnaires and verification.

Putting a stop to the food delivery war does not mean denying competition—it means calling for higher-quality competition. True healthy competition should focus on technological innovation, efficiency improvements, and service optimization, not on subsidy games propped up by piling on capital. Let food delivery prices return to a reasonable range; let the catering industry get rid of malicious involution; let platforms put resources into areas that genuinely create value—such as supply-chain optimization, rider protections, and food safety. This is the long-term plan that benefits businesses and the public.

The cheapness of “one-cent food delivery” is the most expensive price the entire industry pays. Over the past year, food delivery platforms used trillion-level subsidies to buy a kind of fake prosperity, but it caused catering businesses to take losses, consumers to lose out on quality, and added chill to the broader economic picture. Regulators’ action is not to end competition, but to end disorderly practices. Let prices return to reasonable levels, let competition return to service, and let the industry return to rationality—that is the true way to benefit businesses and the public.

Commentator: Zhang Chengdi Editor: Sun Feifei Proofreader: Yang Hefang