BUSINESS

Chinese Regulators Demand Tech Giants End ‘Instant Retail’ Subsidy War

Published: Jul. 19, 2025 3:11 a.m. GMT+8

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The latest chapter of this subsidy war began in earnest when e-commerce powerhouse JD.com officially entered the food delivery market in Februar

China’s market regulator has summoned three of the country’s top e-commerce platforms — Meituan, JD.com and Alibaba Group-backed Ele.me — in a bid to cool an escalating price war driven by aggressive subsidies.

The State Administration for Market Regulation (SAMR) issued a statement late Friday demanding the companies adhere to fair competition rules and engage in rational market behavior.

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Explore the story in 30 seconds

China’s market regulator summoned Meituan, JD.com, and Ele.me to address an intense price war in the instant retail sector, demanding fair competition.
Aggressive subsidies, highlighted by Alibaba's 50 billion yuan ($7 billion) plan, led to record order volumes, system crashes, and backlash from industry groups over sustainability and worker impact.
Regulatory intervention targets predatory pricing and market distortion, with Beijing’s 2025 policy prioritizing correction of “involution-style” competition in e-commerce.

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Who’s Who

Meituan: Meituan is one of China's top e-commerce platforms specializing in "instant retail" deliveries. It's currently engaged in an aggressive price war with competitors like JD.com and Ele.me, offering substantial customer subsidies. Regulators have intervened due to concerns about "involution-style competition," urging Meituan and others to ensure fair practices and rational market behavior.

JD.com: JD.com is an e-commerce platform that entered China's food delivery market in February, directly challenging Meituan and Ele.me. It experienced rapid growth, reaching 25 million daily orders by June 1, but has since stopped releasing further data. JD.com, along with Meituan and Alibaba Group-backed Ele.me, has been summoned by China's market regulator for engaging in a price war driven by aggressive subsidies, which regulators call "involution-style competition."

Ele.me: Ele.me is an Alibaba-backed e-commerce platform in China. It's a major player in the "instant retail" sector, delivering goods within an hour. Ele.me is involved in an escalating price war, fueled by aggressive subsidies, leading to scrutiny from China's market regulator for "involution-style competition."

Alibaba Group: Alibaba Group's Ele.me, an e-commerce platform, is involved in an "instant retail" price war in China, offering significant subsidies. This has led to regulatory scrutiny from the State Administration for Market Regulation (SAMR). Alibaba's Taobao Flash Sale, using Ele.me's infrastructure, initiated a 50 billion yuan subsidy plan, contributing to increased order volumes but also facing concerns over market distortion and sustainability.

Taobao Flash Sale: Taobao Flash Sale, backed by Alibaba, sparked a price war in China's instant retail sector with a 50 billion yuan ($7 billion) year-long subsidy plan. This included handing out coupons worth up to 188 yuan per user, covering various purchases through Ele.me's delivery infrastructure. This aggressive discounting led to a surge in orders but also prompted regulatory scrutiny due to unsustainable competition.

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What Happened When

February 2025：: JD.com officially entered the food delivery market, directly challenging Meituan and Ele.me.

May 2025：: The State Administration for Market Regulation (SAMR) and four other government bodies held talks with Meituan, JD.com and Ele.me, urging 'fair and orderly competition.'

By June 1, 2025：: JD.com reported rapid growth, hitting 25 million daily orders before ceasing to publish further data.

July 2025：: Alibaba’s Taobao Flash Sale, using Ele.me’s delivery infrastructure, unveiled a yearlong subsidy plan worth 50 billion yuan.

On Saturdays in July 2025：: Taobao Flash Sale handed out coupons worth up to 188 yuan per user.

Weekend of July 5, 2025：: Meituan reported surpassing 120 million daily instant-retail orders for the first time; Taobao and Ele.me's joint orders exceeded 80 million.

July 12, 2025：: Meituan’s orders hit 150 million on Saturday; demand spikes caused system crashes and delivery delays.

Week of July 14, 2025：: Dalian Food Industry Association issued a public appeal warning of a 'systemic crisis' for restaurants caused by the subsidy war.