Food Delivery War Nears Its End? Analysts Say Regulation Signals Shift From Price Battles To Ecosystem Competition

On March 26, the State Administration for Market Regulation reposted an Economic Daily commentary titled “The Food Delivery Battle Should End,” a move widely interpreted by the market as a clear regulatory directive to curb destructive platform competition and steer the sector toward healthier development. Industry specialists speaking to Cailian Press indicated that instant retail competition will increasingly center on service quality and operational efficiency rather than on aggressive price subsidies.

The article argued that the apparent consumer benefits of the food delivery war mask a deeper problem of destructive internal competition. From a macroeconomic perspective, the price war has disrupted the restaurant industry’s pricing structure and pushed many operators into loss‑making promotional cycles, thereby undermining the broader recovery in consumption and running counter to central policy objectives to stimulate spending. Zhuang Shuai, founder of Bailian Consulting and a retail e‑commerce expert, told Cailian Press that the State Administration for Market Regulation intends to halt capital‑driven, subsidy‑led “involution” and to encourage a transition toward innovation and service optimization.

Under the comprehensive anti‑involution campaign, local market regulators have begun concrete enforcement. On March 23, Beijing’s Market Supervision Bureau, together with the Municipal Commerce Bureau and the Municipal Culture and Tourism Bureau, summoned and provided administrative guidance to twelve platform operators, including JD.com, Taobao Flash Sale and Meituan, reporting the initial issues identified since the launch of the campaign and issuing rectification requirements.

For platform operators, the subsidy war has materially eroded profitability. In recent quarterly disclosures, JD.com  (09618.HK) and Alibaba (09988.HK) both reported significant impacts attributable to the delivery price war. JD.com’s new business division recorded an operating loss of RMB 46.641 billion in 2025, while Alibaba’s e‑commerce group reported adjusted EBITA of RMB 34.613 billion in the third quarter of fiscal 2026, a year‑on‑year decline of 43%.

Investor focus has shifted from market share to sustainable profitability. At its recent results briefing, JD.com  CEO Xu Ran stated that the company aims to sustain healthy scale growth for its delivery business while steadily improving operational efficiency and unit economics. Alibaba e‑commerce CEO Jiang Fan indicated at the company’s earnings meeting that the group expects its instant retail operations to reach overall profitability by fiscal 2029.

Market participants are now looking beyond subsidy spending for new competitive levers in instant retail. Zhuang Shuai told Cailian Press that the next phase of competition among leading platforms will emphasize supply‑chain ecosystem integration, fulfillment efficiency, AI‑enabled capabilities, and expansion into higher‑ticket non‑food categories, shifting the emphasis from “who burns the most cash” to “who delivers superior service, efficiency and ecosystem value.”

Following the reposting of the article, shares of major delivery platforms rose. At yesterday’s close, Meituan (03690.HK) advanced 13.92%, Alibaba gained 4.63%, and JD.com  increased 4.85%.