Meituan Warns China’s Food Delivery Boom Masks a Brewing Bubble
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While China’s food delivery orders have surged since May, the average value per order has fallen sharply
A fierce price war in China’s food delivery industry is inflating an unsustainable bubble, according to a top executive at Meituan, who cautioned that using subsidies to trade discounts for volume may offer only short-lived gains.
“The growth driven by price-for-volume subsidies is not durable,” said Xue Bing, general manager of Meituan’s food delivery unit, during a catering industry conference on Oct. 16. While orders have surged since May, he noted, the average value per order has fallen sharply.
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- China’s food delivery market faces an unsustainable bubble due to heavy price-for-volume subsidies, with Meituan warning of short-lived gains.
- Order volumes have surged but average order value and dine-in spending have dropped; restaurant oversaturation and increased competition from JD.com and Alibaba intensify the pressure.
- Meituan plans a 2 billion yuan push for sustainable growth as consumer spending shifts to smaller, lower-cost meals and revenue growth slows.
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Who’s Who
- Meituan
- Meituan is a major player in China's food delivery industry. They are currently involved in a fierce price war, using subsidies to attract customers, though a top executive believes this growth model is unsustainable. In response to industry trends, Meituan plans to invest 2 billion yuan to support high-quality restaurants and promote sustainable growth.
- JD.com
- JD.com formally entered the food delivery market in February, intensifying the competition in the industry. This move contributed to the ongoing price war, leading to a surge in orders but a sharp decline in the average value per order, according to a Meituan executive.
- Alibaba Group Holding Ltd.
- Alibaba Group Holding Ltd. revamped its instant retail platform and announced a 50-billion-yuan ($7 billion) subsidy plan in July to compete in China's food delivery market. This move intensified a price war, leading to a "deep reshuffle" in the catering industry amidst oversupply and weak consumer spending.
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What Happened When
- February 2025：
- JD.com formally entered the food delivery market, igniting a new round of competition.
- April 2025：
- Alibaba Group revamped its instant retail platform.
- By May 2025：
- Orders in China’s food delivery sector began to surge, though average order value fell.
- First half of 2025：
- Sales in Beijing dropped 2.3% year-over-year.
- June 2025：
- Nationwide restaurant revenue growth slowed to 0.9%.
- July 2025：
- Alibaba Group announced a 50-billion-yuan ($7 billion) subsidy plan.
- August 2025：
- Nationwide restaurant revenue growth edged up to 2.1%.
- Oct. 16, 2025：
- Xue Bing and Wei Wei of Meituan discussed the unsustainable price war and sector 'reshuffle' at a catering industry conference.
- 2025：
- The State Administration for Market Regulation summoned food delivery companies multiple times to urge fair competition.
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