China Steps In to Curb 'Zero Yuan Purchase': Three Major Food Delivery Platforms Summoned for Talks

China’s food delivery platforms launched an aggressive 'zero yuan purchase' subsidy war to grab traffic, which in recent days has led to multiple market disruptions. On the 18th, the three major platforms were summoned by China's State Administration for Market Regulation, and were required to regulate promotional activities and participate in competition rationally.

On the 18th, China's State Administration for Market Regulation summoned the platforms Ele.me, Meituan, and JD.com, and demanded strict compliance with laws and regulations such as the "E-commerce Law of the People’s Republic of China," the "Anti-Unfair Competition Law of the People’s Republic of China," and the "Food Safety Law of the People’s Republic of China." They were told to strictly implement their primary responsibilities, further regulate promotional activities, participate rationally in competition, jointly build a mutually beneficial ecosystem involving consumers, merchants, delivery riders, and platform companies, and promote the standardized, healthy, and sustainable development of the food service industry.

Netizens Lament, "Don’t Stop the Coupons"

The news immediately shot to the top of China’s social media hot topics that night, with many netizens lamenting, "Don’t stop the coupons."

Leading food delivery platform Meituan and Taobao Flash Sale (a collaboration between Ele.me and Taobao) kicked off a new round of the food delivery war on the 5th. Over the past two Saturdays, the two platforms have massively distributed zero-yuan vouchers and full-reduction coupon packs to compete for orders and traffic.

According to sources, last Saturday (July 12), Taobao Flash Sale’s subsidies exceeded 1.2 billion RMB (about 710 million MYR), while Meituan’s subsidies also ranged from 300 to 400 million RMB. In the past two weeks, the weekday subsidy amount for Taobao Flash Sale is about 400 million RMB per day.

Meituan issued about 20 million orders' worth of "eat for free" or "drink for free" coupons in a single day. Taobao Flash Sale’s coupons are all full-reduction food delivery vouchers, including "18.8 yuan off for orders over 18.8 yuan," "18.8 yuan off for orders over 28 yuan," "10 yuan off for orders over 20 yuan," and other high-value full-reduction coupons.

Chinese media noted that this year’s food delivery war was originally initiated by JD.com Food Delivery. On April 10th, JD.com launched its "Hundred Billion Yuan Subsidy," with some merchants offering very large subsidies. This boosted daily order volumes to 10 million within just a few days.

On July 2nd, Taobao Flash Sale also announced that over the next year it will release a total of 50 billion RMB in platform consumption coupons and subsidies to consumers and merchants.

The food delivery platform war has triggered multiple market issues. Platforms distributed coupons for free milk tea and coffee, causing merchants’ daily order numbers to soar several times above normal but leading to unmanageable workloads, with little profit or even forced participation in losses due to subsidies. Delivery riders had to work overtime for more orders, voicing complaints; users queued up restlessly, and massive order cancellations resulted in food waste and severely degraded consumer experiences.

Previously in May, the State Administration for Market Regulation, together with other departments, had also summoned JD.com, Meituan, Ele.me, and other platforms, requiring them to strictly follow relevant laws and regulations, enhance internal management, conduct business legally and compliantly, and compete fairly and orderly.