For years, the hyper-competitive landscape of Chinese food delivery was defined by a race to the bottom, where 'one-cent meals' were the norm and market share was bought with billions in venture capital. This era of unsustainable largesse is facing a terminal reckoning. China’s State Administration for Market Regulation (SAMR) recently unveiled the 'Ten Articles on Delivery Platform Subsidies,' a draft regulation designed to dismantle the predatory 'money-burning' strategies that have come to dominate the sector.
The regulatory pivot comes in the wake of a massive surge in delivery volume, which saw daily orders across the country jump from 100 million to 220 million between May and July 2025. However, this growth masked a toxic economic cycle where platforms leveraged their capital advantages to monopolize traffic. By offering deep discounts, platforms effectively coerced merchants and couriers into a system where volume increased but margins vanished.
The human cost of this 'subsidy trap' has become increasingly visible. Small-scale merchants found themselves in a catch-22: participate in loss-leading promotions and face bankruptcy, or refuse and be buried by the platform’s visibility algorithms. Cases reported in Beijing revealed merchants receiving a mere 1.25 RMB for meals listed at 18 RMB, illustrating how platforms shifted the cost of consumer discounts directly onto the backs of small business owners.
Delivery riders, the visible lifeblood of the industry, have also seen their earnings cannibalized to fund the price wars. During peak shopping festivals in 2025, delivery fees for some platforms dropped below the psychological floor of one RMB per order. The result was a workforce pushed to the edge of safety and exhaustion to maintain the fiction of low-cost convenience. Consumers, meanwhile, have seen food quality decline as merchants prioritize standardized, pre-packaged meals to survive the thinning margins.
The new 'Ten Articles' mandate transparency, requiring platforms to disclose subsidy sources and implementation methods at least seven days in advance. More critically, it bans the practice of forcing merchants to bear the cost of platform-wide discounts. This represents a strategic shift in Chinese regulation, moving away from reactive fines toward a proactive dismantling of the 'low-price-at-all-costs' business model that has defined the platform economy for a decade.