China’s government is moving to rein in intense competition among major food delivery platforms, including those run by leading tech firms, amid concerns that aggressive price wars are harming profitability and contributing to broader economic pressures. The State Administration for Market Regulation (SAMR) announced on Friday that the State Council has decided to launch an investigation to promote fair competition and establish a more stable market environment with reasonable pricing. (Reuters).
The inquiry focuses on the rapidly expanding instant retail and food delivery markets, where items from meals to over-the-counter medicines are often delivered within an hour. Regulators have raised alarms over “involution-style” competition—excessive rivalry that drives diminishing returns—caused by excessive subsidies and discounting strategies. Such practices, the authority said, have placed stress on the real economy and exacerbated deflationary trends.
China’s consumer prices ended 2025 flat, missing the government’s target of around 2%, despite policy efforts to reduce overcapacity and stabilize costs. Within this context, the delivery sector’s intense price competition has drawn particular scrutiny.
Companies including Meituan, Alibaba, and JD have invested heavily in the fast-growing delivery segment, betting that rapid logistics will become a key driver of China’s e-commerce future. Meituan, for example, posted its first quarterly loss since late 2022 in the third quarter of last year, warning of further margin pressures from ongoing price battles.
Both Meituan and Alibaba welcomed the investigation, pledging full cooperation with the regulators. The State Council emphasized that the review aims to create a healthier competitive landscape while supporting high-quality service and sustainable pricing.