China’s Delivery Price War Overwhelms Food Shops
Deep discounts trigger buying frenzy, leaving businesses struggling to keep up
A fierce price war among China’s major food delivery platforms led to a weekend of chaos as deep discounts triggered a surge in orders, leaving many food and beverage shops struggling to fulfill demand and sparking concerns about the sustainability of such practices.
Unprecedented Demand
A barista from the popular Chinese milk tea chain **ChaPanda**, known online as **ChaPanda Working Diary**, posted a photo on Xiaohongshu showing receipts piled on the floor of a Zhejiang outlet. The barista lamented, “We are still 2,000 orders behind,”
adding, “Today is a nightmare for milk tea shops.”
Platforms Battle for Market Share
Major food delivery players like **Meituan**, **Alibaba’s** Taobao Flash Sale and **Ele.me**, as well as **JD.com**, launched summer campaigns with generous vouchers. The rock-bottom prices led to a buying frenzy, with some customers stocking up and others placing large advance orders.
**Meituan** collaborated with beverage brands such as **Mixue**, **ChaPanda**, and **Cotti Coffee**, offering coupons for “0 yuan milk tea”.
According to IT Times, Taobao Flash Sale released coupons promising “20 yuan (US$2.79) off for orders above 25 yuan”.
Government Scrutiny Intensifies
This escalation in the battle for market share has drawn increasing concern and scrutiny from the government. According to a recent report by the China Chain Store & Franchise Association, operating costs for chain restaurants have risen by 15% in the past year, making deep discounting unsustainable for many businesses. (CCFA Report 2024)
Delivery App Briefly Crashes
The surge in orders overwhelmed merchants and even briefly crashed a delivery app. Many shops faced immense pressure to keep up with demand, resulting in long wait times and frustrated customers. Some businesses struggled to manage the sudden influx, leading to operational challenges.
The long-term impact of these deep discounts on the food delivery industry remains to be seen, but the weekend’s events highlight the intense competition and the potential consequences for merchants and consumers alike.
