context: The 2025 government work report calls for rectificating of ‘involution-style’ competition, with e-commerce as a key sector. Meituan, for example, notoriously cut costs by outsourcing the recruitment of food delivery drivers to third-party vendors that offer minimal social insurance and protection. JD.com saw an opportunity to enter the food delivery sector by advocating for protection for food delivery riders, but that sparked a price war in 2025 as all platforms dropped subsidies to attract and retain drivers, which eventually transferred costs to individual restaurant owners and caused food safety concerns.
SAMR (State Administration for Market Regulation) summoned three major platform companies (Ele.me, Meituan and JD.com) for discussions on strengthening compliance with e-commerce and competition laws amid escalating ‘zero-cost’ and large-scale subsidy promotions in the food delivery sector, on 18 July, reports Caixin. The move follows concerns that aggressive price competition is distorting the market and triggering systemic risks across the industry.
According to Caixin, the SAMR mandated these platforms to
- implementat corporate responsibility
- regulate promotional practices
- engage in rational competition
- foster a win-win ecosystem for consumers, merchants, delivery riders and platforms
- promote healthy, sustainable development of the catering services industry
Beijing E-Commerce Association responded, saying it
- advocates for regulated promotional management
- prohibits below-cost dumping aimed at excluding competitors
- encourages differentiated service models over low-price wars
- calls for fair competition, anti-monopoly measures and banning ‘choose one out of two’ practices
Dalian Catering Industry Association argues that disorderly competition among platforms has triggered systemic crises in the restaurant sector. It highlights that excessive subsidies have led to a 'lose-lose' situation, eroding merchant profits, causing operational instability, and threatening the long-term viability of the delivery ecosystem. The association urges a shift from price wars to high-quality development, with greater investment in food safety, operational efficiency and digitalisation.
In May 2025, SAMR, in coordination with other government departments, summoned Ele.me, Meituan and JD.com regarding issues in the food delivery competition. Yet, these platforms launched major subsidy campaigns over the subsequent weekends in July, notes Caixin.
SAMR defines ‘involution-style’ competition as featuring low-price, low-quality, repetitive and non-innovative competition, undermining market order and industry profitability.