The government has taken timely action.
On January 9, the State Administration for Market Regulation disclosed that the Office of the State Council's Anti-Monopoly and Anti-Unfair Competition Committee has initiated an investigation and assessment into the competitive conditions within the food delivery platform service industry, based on the Anti-Monopoly Law of the People's Republic of China.
The related news was accompanied by a Q&A session.
A reporter's question was phrased as follows: Could you please introduce the relevant background and primary considerations behind the Office of the State Council's Anti-Monopoly and Anti-Unfair Competition Committee announcing the investigation and assessment of competitive conditions in the food delivery platform service industry?
The respondent was a responsible comrade from the Office, whose answer consisted of two paragraphs.
The first paragraph was divided into four sentences. The first two sentences expressed affirmation: "The Party Central Committee and the State Council attach great importance to the innovation and healthy development of the platform economy. As an important component of China's platform economy, the food delivery platform service industry has played a significant role in promoting consumption, expanding employment, and driving innovation." The second sentence was the most crucial, beginning with "However": "However, recently, prominent issues in the food delivery platform service industry such as competing through subsidies, engaging in price wars, and controlling traffic have become pronounced, squeezing the real economy, intensifying 'involutionary' competition within the industry, and drawing strong reactions from various sectors of society." The key phrase: "involutionary" competition. The third sentence outlined the measure: "In order to promote lawful, compliant operation and fair, orderly competition among food delivery platforms, forming a market order characterized by high quality commanding high prices and benign competition," the Office "has decided to conduct an investigation and assessment of the competitive conditions in the food delivery platform service industry."
The second paragraph was divided into two sentences. The first sentence stated that this investigation and assessment would extensively solicit opinions from all parties through various means, "comprehensively investigate market competition conditions, organize analysis and论证, convey regulatory pressure, and propose处置 measures." Particularly the last twelve characters, "convey regulatory pressure, and propose处置 measures." This means that platforms should feel the pressure, and there will certainly be specific handling opinions. The second sentence presented specific requirements: "Food delivery platforms should actively cooperate with the market investigation and assessment work, strictly implement their primary responsibility for anti-monopoly compliance, effectively prevent and resolve monopoly risks, participate in market competition fairly, and promote innovation and healthy development in the food delivery platform service industry."
This action is undoubtedly targeted.
In fact, this is not the first time the government has intervened.
There have been at least three previous instances. The first was on May 13 last year. Five departments—namely, the State Administration for Market Regulation together with the Central Social Work Department, the Cyberspace Administration of China, the Ministry of Human Resources and Social Security, and the Ministry of Commerce—summoned platform enterprises including JD.com, Meituan, and Ele.me for talks regarding prominent issues in food delivery industry competition. Please note the order: JD.com led. This is likely straightforward, as JD.com initiated the "Billions in Subsidies" food delivery war. The second was on July 18 last year. The State Administration for Market Regulation intervened again, summoning Ele.me, Meituan, and JD.com for talks, demanding that all parties strictly implement their primary responsibilities, further standardize promotional activities, and participate in competition rationally. Please note the order: Ele.me was listed first. This followed the entry of Taobao Flash Purchase on July 2, which announced direct subsidies totaling 50 billion yuan to consumers and merchants within 12 months, causing market震动. The third was on August 1 last year. Meituan, Taobao, Ele.me, and JD.com successively issued statements on their official websites, pledging to "standardize promotions" and proposing multiple measures to restrict subsidy behaviors. There was no unified arrangement; the statements were not issued simultaneously. A review shows Meituan's statement was titled "Prospering the Industry Ecosystem, Resisting Disorderly Competition," Taobao Flash Purchase and Ele.me's was titled "Continuously Improving Services, Promoting Benign Competition, Igniting the Vitality of Consumption," and JD.com's official blog published a similar article, committing to resist恶性 competition. Please note the order: Meituan led. After all, Meituan remains the market leader.
Entering 2026, the direct intervention by the Office of the State Council's Anti-Monopoly and Anti-Unfair Competition Committee clearly represents the highest-level and most significant action to date.
How should this be viewed? In one word: Good! More specifically, three preliminary points can be made. First, firmly saying no to "involutionary" competition. As I have said before, market competition is a good thing; progress often stems from fierce competition. However, disorderly market competition ultimately leads to a mess. True prosperity is not a "life-or-death" zero-sum game, but should be a symbiotic ecosystem where "a rising tide lifts all boats." Aiming for number one is fine, but one should not overlook the ecosystem beyond the data. The battle among several players indeed produces impressive-looking data, but what is the result? "Only an increase in milk tea orders, not an increase in proper meal orders"! A research group led by Professor Zhang Jun from the School of Economics at Fudan University found that under the influence of large subsidies, merchants普遍呈现 a state of "increased volume without increased revenue." During the period of intensified competition since July last year, the average daily total order volume ("delivery plus dine-in") for merchants increased by 7%, but the average daily actual revenue collected by merchants decreased by approximately 4%. Among these, independent stores saw a relatively larger decline in revenue compared to branded chain merchants. As a People's Daily commentary previously stated, ultra-low prices might benefit consumers, increase orders for merchants, and boost income for delivery riders in the short term. However, it must be acknowledged that the "explosive orders" effect leads to irrational consumption, thinning profit margins per order, delivery riders being run ragged, and impacts on product and delivery service quality. Ultimately, profits across the entire industry decrease, and the platforms involved in the battle will also suffer backlash.
Second, the focus must remain on long-term development. The government's intervention clearly indicates that it has spotted unfavorable trends. Despite repeated reminders and talks, some platforms continue to ramp up their investments. Competition is necessary, but the best competition should be about competing on innovation and service. A company's stature is never determined by how low it can push prices, but by how much space it can create for value and experience. In August last year, discussing food delivery competition, Wang Xing stated during an earnings call: "First, let me be clear, we are firmly opposed to involution... Ultimately, instant retail is still a form of retail. To succeed in the retail business, after all the fancy stuff, you ultimately have to return to the basics, return to the fundamentals." He continued: "We always focus on doing the right things. We ensure we have a continuously rich selection of high-quality products, ensure we can provide fast and reliable delivery services, and also ensure prices are always affordable. There's nothing fancy, just returning to the basics." Essentially, this food delivery war is fighting for market share, for traffic入口, coveting greater profit margins. But given the stage of development of China's internet industry today, resorting to such low-level tactics is quite disappointing. After all, racing to the bottom on price has no winners. Racing to the top on innovation is what holds the future. The wheel of history always favors those who push it forward, not those who merely spin in circles on the tracks it has already碾压.
Third, don't become a laughingstock for the whole world. Writing this article is not meant to criticize anyone. Frankly speaking, if merchants are willing to offer large subsidies, as consumers, we would certainly welcome it with both hands—why not take advantage of the羊毛? From a positive perspective, after a period of quiet in the Chinese internet sector, this sudden burst of activity also demonstrates the resilience and ambition of Chinese enterprises, as well as the potential and vitality of the Chinese economy. It's not all bad. But the outcome of excessive involution is an exhausted industry and becoming a global laughingstock. One friend expressed痛心疾首: Look, foreign companies are all going ALL IN on AI, While here we are, all going ALL IN on WAIMAI (food delivery)! Oh, both have 'AI', but the latter has one more letter. But is this good? The government's intervention will certainly lead to handling results, and this also sends a strong signal: encourage competition, but avoid "involution"! As state media has put it, internet companies have innovative genes and should be the ones to broaden their horizons and pursue loftier goals. Major tech companies理应 use better services and more dazzling innovations to drive greater social progress, thereby inevitably ushering in broader prospects for themselves. The direction of the tide is more important than the sound of the waves. Let's just forget about involution.
Personal views, do not represent any institution.