INDUSTRY BRIEF: China regulators intervene in growing food delivery wars

Regulators have stepped in to try to tamp down a growing price war in China’s takeout dining sector. On the evening of May 13, the State Administration for Market Regulation (SAMR), along with four other government agencies, summoned major operators JD.com (JD.US; 9618.HK), Meituan (3690.HK) and Alibaba (BABA.US; 9988.HK)-owned Ele.me over prominent issues in the industry, according to financial media Caixin.

According to the Caixin report, the five ministries told the trio to strictly comply with relevant laws and regulations, and urged them to fulfill their corporate and social responsibilities, conduct business lawfully and fairly, and safeguard the rights of consumers, merchants and delivery riders. Government ministries increasingly intervene in new industries when competition is getting out of hand, aiming to ensure healthier and more orderly development.

JD.com made a bold entry into the takeout dining market this year, with founder Richard Liu personally leading the charge. The company pledged to cap commissions paid by restaurants at 5% and promised to fully cover social insurance for full-time deliverymen. Meituan responded with its own pension subsidy programs. The two sides have also traded accusations over the controversial practice of forcing deliverymen to choose one platform or the other.

Alibaba joined the battle on April 30, with Ele.me launching a 10 billion yuan ($1.39 billion) subsidy campaign and teaming up with Taobao Instant Commerce to give away millions of free beverages.

Since late 2024, regulators have repeatedly emphasized the importance of standardizing platform operations and protecting gig workers’ rights. Future competition among takeout dining platforms is expected to center not only on subsidies and delivery speed, but also on compliance with increasingly rigorous legal and social standards.

By Lee Shih Ta

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