He Wei, a businessman, constructed something noteworthy somewhere in Jiangsu province. About ten years ago, he began with a single restaurant selling boiled beef noodles and eventually expanded it into a chain of 100 locations. This is the kind of low-key entrepreneurial success story that seldom makes headlines. However, He Wei’s story has recently taken a turn that many Chinese small restaurant owners would recognize right away. In a war he never chose to fight, the platforms that once brought him clients have begun to send him bills he didn’t consent to, requiring him to foot the bill for subsidies he never requested.
When JD.com, one of China’s biggest e-commerce companies, announced it was joining the food delivery market in February 2025, that war really got underway. Meituan, the dominant super-app that had dominated the market for years, and Alibaba’s Ele.me, which had fallen into a distant second place, were the targets of this calculated and aggressive move, which used significant subsidies to entice users away.
| Category | Details |
|---|---|
| Industry | Food Delivery / Instant Retail |
| Key Players | Meituan, JD.com, Alibaba (Ele.me) |
| Market Size | 1.6 trillion yuan (~$223 billion) in annual deliveries (2024) |
| Price War Began | February 2025, when JD.com entered food delivery |
| Estimated Subsidies Spent | ~80 billion yuan across major platforms (2025) |
| JD.com Q4 2025 Loss | 2.71 billion yuan (~$392.9 million) — first loss in nearly four years |
| Meituan Loss (Recent) | 15 billion yuan reported loss amid ongoing competition |
| DoorDash (U.S.) Valuation | ~$85 billion; holds more than double U.S. market share of nearest competitor |
| Key Outcome | No outright winner; consolidation, exhausted margins, negative real yields for platforms |
| Official Reference | economist.com |
The type of platform conflict that doesn’t yield clear winners ensued. It results in wreckage and a sizable bill that is given to those who weren’t present when the decisions were made.
When the subsidy war reached its height of absurdity, it resulted in something that briefly gained online fame: bubble tea that could be purchased for zero yuan through platform promotions. Not discounted. Nothing. On some days, customers in some cities who ordered through JD or Meituan could get a drink that would typically cost 20 or 30 yuan for nothing at all. Watching a market do that gives me a strange feeling, one that is both delightful and unsettling because, behind the freebie, someone is losing money, and the math doesn’t add up for very long.
It didn’t. The major platforms are estimated by analysts to have spent about 80 billion yuan on subsidies between now and 2025. This amount may seem abstract until you compare it to their actual profits. In its fourth quarter of 2025, JD.com, the company that initiated all of this, reported a net loss of 2.71 billion yuan, marking its first quarterly loss in almost four years.
Markets were astounded by the figure. Although the analysts’ consensus estimate was about 200 million yuan, they had anticipated a loss. JD was more than thirteen times worse. That’s a strategy beginning to crumble under its own weight, not a rounding error.
Due to the intense competition, Meituan also suffered a loss of 15 billion yuan. The company that had dominated Chinese food delivery for years—establishing its power through merchant connections and sheer logistical scale—found itself in a situation it most likely never fully expected: spending ferociously to hold onto what it already had. That has an almost Pyrrhic quality. Building a kingdom is sometimes less expensive than defending one.
The irony of it all is that some of the worst effects of the war were borne by those least accountable for its outbreak. At first, the flood of subsidies helped coffee and tea chains like Luckin and Mixue by increasing orders, visibility, and the number of customers who would not have clicked through at regular prices. However, the economics subtly deteriorated as platforms required merchants to bear an increasing portion of the discount burden. Restaurants with already narrow profit margins were forced to choose between staying in and losing money more gradually or opting out of promotions and losing customers. The 100-store noodle chain owned by He Wei is not an anomaly. It’s the model.
In the meantime, a more subdued and perhaps more disciplined version of this tale unfolded with a more tidy conclusion in America. After emerging from the U.S. delivery wars with more than twice the market share of its closest rival, DoorDash was valued at $85 billion by the end of 2025.
It is instructive to see the contrast. DoorDash survived its harsh early years against Uber Eats and Grubhub by progressively tightening operations while rivals burned through capital chasing coverage, rather than by spending more carelessly than everyone else. Although it’s still unclear if that model accurately reflects the dynamics of the Chinese market, the discipline appears to be the real competitive advantage when observing DoorDash’s growth from the outside.
As 2025 gave way to 2026, the price war in China has somewhat subsided, with takeout prices returning to something approaching normal. In retrospect, the entire subsidy exercise appears even stranger—billions spent trying to stimulate demand in a market where the demand problem was never really about price—because consumer spending is still slow throughout the economy.
Although JD’s goal of a 30 percent market share by 2026 might eventually come to pass, the expense of getting there has already changed what profitability looks like for everyone in the industry.
It’s difficult to ignore the fact that both countries’ delivery wars ended in the same basic manner: with a field of worn-out fighters, thinner margins overall, and a customer base that enjoyed inexpensive meals for a season before watching prices gradually rise again. The eateries remain. There are still riders on the streets. The platforms continue to function. However, one quarterly earnings report at a time, the cost of all that complimentary bubble tea is now being quietly paid.