From “0 yuan milk tea” to “full discount coupon”, from “618 divine price” to “double hundred plan”, this subsidy war not only made consumers soft, but also caused merchant orders to skyrocket and platform daily activity soared. However, is the subsidy a shot in the arm to activate the market, or a short-term carnival to quench thirst? This article deeply dismantles the subsidy strategies and effectiveness of major platforms, revealing the business logic and potential concerns behind this “burning money” competition. Can the food delivery industry be “great again” with this? The answer may not be in the subsidy itself.
On July 8, JD Takeaway announced the launch of the “Double Hundred Plan”, which marked the official start of the second wave of subsidy wars in the food delivery industry, and all three major platforms of JD.com, Meituan, and Ele.me (joint Taobao flash sale) participated in the war.
Since JD.com’s high-profile entry into the market in March, the takeaway war has intensified – major platforms have shown their swords in an attempt to seize a more advantageous position in the market with fierce stock competition.
However, among all the means of competition, the most effective is still the simple and crude “real money subsidy”. From JD.com’s 10 billion subsidy, to Meituan’s three-year investment of 100 billion, to Taobao Flash Sale & Ele.me’s 50 billion subsidy combination, to the “Takeaway Carnival Day” on July 5, every subsidy measure affects the nerves of the market. However, Liu honestly, like most people, has a doubt, that is, can these crazy subsidies make the takeaway market “great again”? In this regard, we might as well review the subsidy strategies of major platforms since April and speak through data.
JD Takeaway: Tens of billions of subsidies have sounded the charge, setting off a new wave in the industry
On April 11, JD Takeaway officially sounded the clarion call to charge, and its 10 billion subsidies were fully launched, with “national subsidies + direct drop of explosive products” as the core mechanism, and plans to invest more than 10 billion yuan within one year. This move was regarded as a “table-flipping” competition in the industry, which instantly attracted the attention of the entire industry.
On the user side, JD Takeaway has launched a very attractive subsidy policy. All users can enjoy a subsidy of up to 20 yuan, covering many leading catering brands such as McDonald’s, Haidilao, and Nai Xue’s tea, so that consumers can enjoy benefits while tasting well-known food.
PLUS members and college students have received special care, and they can draw additional “25-20 yuan” exclusive coupons every day, limited to 100,000 tickets. This subsidy for specific groups not only increases the loyalty of these users, but also expands the user base of JD Takeaway to a certain extent.
B-end product manager’s ability model and learning improvement
The first challenge faced by B-end product managers is how to correctly analyze and diagnose business problems. This is also the most difficult part, product design knowledge is basically not helpful for this part of the work, if you want to do a good job in business analysis and diagnosis, you must have a solid …
View details >
For PLUS members, they themselves are core users in the JD.com ecosystem, and such exclusive subsidies further strengthen their dependence on JD.com products. The college student group is the main force of future consumption, and locks in this part of the user in advance through subsidies, which reserves the potential for the long-term development of JD Takeaway.
The setting of the explosive product area is a highlight of JD.com’s takeaway. After subsidies for coffee, burger sets and other products, the price of some products is only 1/3 of that of other platforms, such as a brand of coconut latte for only 4.9 yuan. Such a low price has greatly stimulated consumers’ desire to buy, so that more people are willing to try to place an order on JD.com.
These explosive products are often the categories that consumers consume frequently on a daily basis, and can quickly attract users’ attention through low-price strategies, allowing users to gradually form usage habits after experience.
In addition, JD Takeaway has also optimized the entrance. The “Second Delivery” channel on the homepage of the JD App is placed at the top of the subsidy entrance, making it convenient for users to quickly find subsidy activities; Users can view the estimated price in real time when placing an order, which greatly simplifies the price comparison process and improves the user’s shopping experience.
In the era of information explosion, users have extremely high requirements for the convenience of operation, and the optimization of the entrance reduces the user’s operation steps, lowers the threshold for use, and helps to improve the user’s conversion rate and retention rate.
The original intention and purpose of JD Takeaway’s move is very clear, which is to use its strong distribution capabilities and supply chain advantages to break the industry monopoly through the “catfish effect” and get a piece of the pie in the highly competitive food delivery market.
JD.com is providing solid confidence for the subsidy war in this way. JD.com has been deeply involved in the logistics field for many years and has a wide coverage and highly efficient distribution network, which gives it a natural advantage in the timeliness and stability of takeaway delivery; At the same time, JD.com’s strong supply chain system can ensure the quality of goods and the stability of supply, providing a guarantee for the smooth development of subsidy activities.
Judging from the achievements, after the launch of the 10 billion subsidy, the number of users and orders of JD Takeaway have increased significantly. According to JD.com’s internal data, in the first week of the subsidy’s launch, the number of new user registrations for JD Takeaway increased by more than 300% month-on-month, and the number of orders increased by more than 5 times compared with before the launch.
For example, McDonald’s orders for JD.com takeaway increased by 200% in a week, and Haidilao’s growth also reached 150%.
These data fully show that JD Takeaway, which has just entered the world, has successfully made a name for itself in the market with its 10 billion subsidy strategy, allowing more consumers to know and use JD Takeaway, laying a solid foundation for its subsequent development.
Meituan Takeaway: 100 billion investment focuses on the long term to help the healthy development of the industry
On the evening of April 14, Xue Bing, general manager of Meituan Takeaway, announced that in the next three years, Meituan Takeaway will invest 100 billion yuan in the catering industry as a whole to help catering partners grow healthily.
This huge investment plan covers four major directions, including helping merchants subsidize consumer activation demand, issuing subsidies to help merchants increase their income, supporting and rewarding quality merchants, and promoting bright kitchens to cover 100,000 stores and strengthening industry infrastructure.
As a leader in the food delivery market, Meituan’s original intention of investing 100 billion yuan is to achieve win-win development between the platform and catering merchants.
In the current situation of increasingly fierce competition in the takeaway market and many challenges faced by catering merchants, Meituan Takeaway hopes to stimulate consumer demand, increase order volume, and help merchants increase revenue through huge investment; On the other hand, support quality merchants, promote the construction of industry infrastructure, and improve the service quality and development level of the entire takeaway industry, so as to achieve the healthy and sustainable development of the industry.
In Meituan’s view, only when the entire industry ecology is good, the platform can achieve long-term development, so its investment is not only limited to short-term market competition, but also focuses on the long-term value improvement of the industry.
From the perspective of the focus of its plan, Meituan Takeaway pays more attention to the overall development of the industry, not only focusing on the activation of consumer demand, but also on the growth of merchants and the infrastructure of the industry.
By helping merchants subsidize consumers, they can attract more consumers to place orders and increase the merchant’s customer flow and sales; The issuance of subsidies directly increases the income of merchants and alleviates the operating pressure of merchants, especially during the critical period of recovery of the catering industry after the epidemic. Supporting and rewarding quality merchants can guide more merchants to improve the quality of their products and services, form healthy competition, and allow consumers to enjoy better takeaway services; Promoting the construction of industry infrastructure such as bright kitchens and stoves will help improve the transparency and safety of the takeaway industry, enhance consumers’ trust in the industry, and fundamentally solve consumers’ concerns about takeaway food safety.
Meituan participated in the distribution of 618: divine coupon packages for the first time, fully covering consumer groups
On May 27, Meituan announced that from May 28 to June 18, it will launch a 618 promotion activity with millions of physical stores under the top 100 well-known catering and retail brands. With a well-designed subsidy strategy, this event has an advantage in the highly competitive market, which has a profound impact on consumers, merchants and the development of the platform itself.
During the event, Meituan launched the 618 Yuanshen coupon pack to all consumers, which is characterized by covering the two core businesses of takeaway and flash sales, and is suitable for physical store shopping in many categories such as alcohol and beverages, snack food, digital home appliances, beauty and skin care, sporting goods, maternal and child products, etc. Whether ordering takeout, buying digital products, or purchasing daily necessities, consumers can enjoy discounts with the help of divine coupon packages, which are fully suitable for diverse life scenarios. For members, the platform provides exclusive upgrade benefits: black gold members can receive 818 yuanshen coupon packs, and black diamond members can receive 888 yuanshen coupon packs. This differentiated setting enhances members’ sense of belonging and loyalty, motivates members to spend more, and deeply taps their consumption potential. Consumers can easily participate by searching for “Meituan 618” on the Meituan App to enter the event page and receive benefits with one click, which greatly lowers the participation threshold and improves the reach and participation of the event.
In the field of catering takeaway, Meituan launched a 618 takeaway coupon that “swells every day, minus 18 for 18”, which directly hits consumers’ daily catering needs and allows consumers to get practical benefits when ordering takeout. Whether it is fast food or milk tea, it can be reduced or exempted with coupons, which stimulates the desire for catering takeaway consumption, prompts consumers who were originally hesitant about prices to place orders, and effectively promotes the growth of catering takeaway orders.
Meituan Flash Sale performed well during the 618 period, launching the 618 God Price event, focusing on mobile phones and computers, digital home appliances, wine and milk powder and other categories, providing ultra-low price discounts on big-name products, and the products are delivered directly from brand stores, promising 30 minutes delivery. For example, consumers can enjoy low prices and receive goods quickly, greatly improving the shopping experience. This is very attractive to consumers who need to shop urgently, and it has strongly promoted the development of the flash sale business. In addition, for popular products such as mobile phones and liquor, activities such as “200 yuan off the national subsidy” and “10,499 yuan Feitian Moutai limited-time grab” have also been launched to further stimulate enthusiasm for purchasing and attract many consumers to participate.
Meituan 618’s subsidy strategy successfully ignited consumers’ enthusiasm for participation, and after the event started, the platform traffic grew explosively, and the daily active users of the Meituan App increased significantly in the early days of launch, and consumers poured into receiving coupons and placing orders.
The subsidy strategy directly led to a surge in order volume. In terms of catering takeaway, the number of orders from many catering merchants has increased explosively. Small and medium-sized catering businesses that originally had stable orders have gained a lot of exposure, and the number of orders has increased several times compared with usual, such as the order volume of some specialty snack bars and fast food restaurants has increased by 200%-300% month-on-month. Large chain catering brands also performed well: Starbucks launched Meituan’s exclusive new products in the live broadcast room for the first time, and the sales of the Frappuccino series increased by 370% year-on-year on the week; Cudi Coffee Coconut Latte Sales Weekly Increase of 138%; Haidilao’s weekly sales increased by 51% year-on-year.
On the first day of Meituan’s flash sale 618, the alcohol category increased by more than 18 times, of which liquor increased by more than 70 times. Within 12 hours of the opening of the promotion in the early morning of the 28th, the turnover of liquor exceeded 300 million yuan, an increase of more than 200 times year-on-year; The turnover of alcohol in 20 hours increased by 90 times year-on-year, and many local wine chain brand stores exploded. Feitian Moutai became a “nuclear explosion point”, and tens of thousands of bottles of 1,499 yuan of affordable Moutai launched on the platform instantly triggered 230,000 people to rush to buy it. According to social platforms, the goods can be received in as little as 30 minutes, and there are even scalpers in the comment area who recycle them at a high price, making a net profit of nearly 600 yuan per bottle. This “instant gratification” experience allows consumers to feel the charm of instant retail.
During the 618 period, the overall turnover of Meituan’s flash sales reached a new high, with the turnover of more than 60 categories of goods increasing by more than 1 times year-on-year, the overall turnover of more than 20 categories of high-priced “large” products such as mobile phones, liquor, milk powder, and large and small household appliances increased by 2 times, and the turnover of nearly 850 retail brands doubled, fully reflecting consumers’ strong purchasing power and willingness to spend on flash sale platforms.
The event benefited many merchants and significantly improved sales performance. In the field of catering, a large number of small and medium-sized businesses have borrowed traffic support and subsidies, and their business has improved significantly, and small shops with low visibility have attracted a large number of new customers, accumulated loyal customers, and laid the foundation for long-term development; Large chain catering brands have expanded their market share and enhanced their brand influence, such as Wallace’s sales exceeded 150 million yuan, setting a new record for the “Divine Coupon Festival”. In the retail sector, merchants participating in flash sales have gained a lot, with Suning.com’s transaction volume increasing 16 times month-on-month, and Yili’s room temperature sales increasing by 143% year-on-year, setting a peak sales in the first half of 2023. With the help of platform advantages and subsidy activities, many brands have achieved rapid sales of goods and widespread brand dissemination, enhancing market competitiveness and market share.
From the perspective of market competition, Meituan has further consolidated its market share with the 618 subsidy strategy and has a more stable position in the fierce takeaway and instant retail markets. Since mid-June, Meituan’s average daily payment orders have remained above 90 million, and the market share has remained stable at about 70% in terms of single-day GMV and order volume in the meal takeaway market. Even in the face of competition and subsidy impacts from new platforms, Meituan has maintained strong growth and a slight increase in market share, indicating that it has successfully attracted and retained a large number of users through the 618 subsidy strategy, strengthened its competitive advantage in the market, and consolidated its leading position in the industry.
Taobao flash sale & Hungry: “Hunger subsidy exceeds 10 billion”, full of sincerity to benefit the public
On April 30, Ele.me and Taobao flash sale “Hunger Supplement Over 10 Billion” officially opened the first wave, announcing: Search for “more than 10 billion” on the Ele.me App, there are surprises every day, so cheap that you have no temper! We don’t fight words, we only give real benefits. Therefore, whether you are happy or not is what we care about in the end. Then make up for it in a big wave! Cheap to the end!! Happy to the end!! These words are full of sincerity and make consumers feel full of benefits.
At that time, Taobao Hourly Dagang was upgraded to Taobao Flash Sale, and officially cooperated with Ele.me to participate in this takeaway war, and the original intention of Taobao Flash Sale & Ele.me subsidy was to bring real discounts to consumers, so that consumers can enjoy more happiness and benefits in the shopping process.
At this moment, they do not participate in the war of words in the industry, but focus on providing real benefits to consumers, which is commendable. In the market environment at that time, other platforms had fallen into a public opinion war, but Ele.me chose to speak with practical actions and benefit consumers through real money subsidies, which was easier to gain consumer recognition and favor.
From the perspective of the focus of subsidies, Ele.me’s “hunger subsidy of more than 10 billion” activities focus more on making consumers feel “cheap” and “happy”. By launching surprise benefits every day, consumers can continue to gain new gains in the process of using the Ele.me app.
This continuous and diversified subsidy method can effectively improve the frequency and satisfaction of consumers. Daily surprise benefits are like a “little luck”, making users have a sense of anticipation when opening the app, thereby increasing user stickiness.
In addition, Taobao Flash Sale & Ele.me also protects merchants’ profit margins and promotes business growth through measures such as store subsidies, commodity subsidies, distribution subsidies and commission waiver and commission reduction.
After the launch of the “Hunger Supplement of More than 10 Billion” campaign, it attracted a large number of consumers’ attention and participation, and the user activity and order volume of the Ele.me App have increased significantly.
Ele.me’s subsidy activity not only benefits consumers, but also brings tangible benefits to merchants, achieving a win-win situation for consumers and merchants. This consumer-centric, practical subsidy strategy demonstrates Ele.me’s corporate responsibility and deep understanding of the market.
Taobao flash sale & Ele.me: 50 billion subsidies, do not roll up merchants themselves
On July 2, Taobao Flash Sale announced that it would directly supplement consumers and merchants by a total of 50 billion within 12 months.
Taobao flash sale relies on technology and business model innovation to build an efficient and collaborative consumption platform, and feed back offline with huge traffic. By issuing large red envelopes, free single cards, and official subsidies for fixed-price goods, we will bring preferential and convenient services and experiences to consumers, and further stimulate consumption vitality. At the same time, measures such as store subsidies, commodity subsidies, distribution subsidies, and commission exemption and commission reduction have been launched to promote the growth of merchants’ businesses.
This move of Taobao flash sale fully reflects its strong strength and determination to seek benefits for consumers and merchants. Its original intention is not only to allow consumers to enjoy more discounts and convenience, but also to drive the development of offline merchants through its own platform advantages and achieve online and offline synergy and win-win results.
At present, Taobao’s flash sale subsidy of 50 billion yuan is being carried out more efficiently, more orderly and more affordable. This concept of balancing the interests of users and merchants allows Taobao flash sales to receive wider support for subsidy activities.
Judging from the achievements, Taobao’s flash sale 50 billion subsidy plan has achieved remarkable results. Taobao Flash Sale and Ele.me jointly announced that the number of daily orders on Taobao Flash Sale exceeded 80 million, including more than 13 million non-catering orders and more than 200 million daily active users on Taobao Flash Sale.
According to the latest data, the number of orders for 3,724 non-catering brands has increased by more than 100% compared with the beginning of Taobao’s flash sale, and orders for food, mother and baby, personal care, home appliances, wine, 3C digital and other categories have also increased by more than 100%. Taobao Flash Sale launched a 50 billion subsidy plan on July 2, and the enthusiasm for social consumption was greatly ignited.
From the perspective of order structure, Taobao flash sales have been greatly expanded to all categories. According to the data, on July 5, Taobao flash sales increased by 489% in orders for grain, oil, rice and noodles, snack food increased by 388%, trendy toys increased by 236%, sportswear increased by 144%, beauty and personal care increased by 114%, and sportswear, nourishment and health care, books, audio-visual and other categories also increased by more than 100%.
The expansion of all categories means that Taobao flash sales are no longer limited to a specific field, but have become a comprehensive consumption platform that can meet the diverse needs of consumers. This full-category layout not only increases the frequency of user use, but also enhances the competitiveness of the platform.
Among the 3,724 non-catering brands with an increase of more than 100% in orders, there are big brands, as well as established brands, new brands and small and medium-sized businesses. Food brands have collectively soared in Taobao flash sales: Nongfu Spring, Baisui Mountain, and Zhao Yiming’s orders soared dozens of times, Master Kong increased by 1090%, Jiu Xiaoliu increased by 600%, Guangming increased by 558%, Xue Ji increased by 425%, Tsingtao Beer increased by 327%, and Three Squirrels increased by 219%.
These data fully illustrate the wide coverage of Taobao flash sale subsidy activities, which have had a positive impact on different types of merchants. Big brands have further expanded their market share with the help of the platform’s traffic advantages, time-honored brands have been revitalized through this opportunity, and new brands and small and medium-sized businesses have gained the soil for rapid growth.
The head mass snack brand Wanchen Group has 5 brands, including Hao Xianglai, Lai Youpin, Di Di, Lu Xiao Greed, and Wife, which has entered Taobao flash sale in June this year, and has quickly launched nearly 2,000 stores, currently mainly covering East China, North China and other regions, and orders on July 5 increased by 922% month-on-month compared with last week, of which the order explosion of Huo Xiang Lai reached 100 times. BESTORE has also effectively expanded its near-field order business in Taobao flash sales, especially since the launch of the 50 billion subsidy, BESTORE’s overall order volume has doubled month-on-month, and Taobao flash sale orders in Xiaogan, Huangshi, Yichang, Xiangyang and other places have increased by more than 200% month-on-month.
Among the TOP100 chain brands in flash sale warehouses, half of the brands have more than 50% of the orders from Taobao flash sales. Kilometer Shopping is a 24-hour comprehensive department store supermarket, which has grown rapidly since its full entry into Taobao flash sale in June this year, and has launched nearly 100 stores, mainly covering East China, with orders on July 5 increasing by 158% month-on-month.
3C digital, FMCG, sports outdoor, clothing and other brand merchants have also gained considerable business increments in Taobao flash sales. Apple stores have seen a more than 100% increase in orders for Taobao flash sales in two months. Recently, consumers urgently placed orders for power banks in Taobao flash sales, driving orders from Pinsheng and Greenlink to skyrocket. Clothing FMCG comprehensive brands such as Cotton Times, Decathlon, Lingzhi Group, Watsons, MINISO, etc. have seen a significant increase in flash sales orders on Taobao, and plan to continue to expand the scope of cooperation.
Merchants in new categories such as books, bags, bicycles, and swimwear that have settled in Taobao flash sales are also emerging day by day. China’s professional racing swimsuit merchant Zhouke fully opened cooperation with Taobao flash sale in its offline stores in July. Liu Danyang, general manager of Zhouke, said that at the key node of the 30th anniversary of its establishment, Taobao flash sales have added many online orders around dealer stores of 5 kilometers, expanding the business radius and making them more confident in the large consumption model of online and offline business in the future.
Taobao’s huge online capabilities, Ele.me’s strong supply chain fulfillment capabilities, and the affordable effect of 50 billion subsidies to consumers and merchants have driven the number of daily orders on Taobao flash sales to grow rapidly by nearly 20 million in the short term.
Such a brilliant result not only reflects consumers’ high recognition and love for Taobao flash sale subsidy activities, but also reflects the efficiency and attractiveness of its business model, bringing real business increments to merchants, fully expanding market capacity, and breaking the “involution” competition.
Meituan takeaway makes another effort: diversified subsidies and sniper opponents to rush orders
On July 5, Meituan Takeaway suddenly subsidized by issuing a large number of free coupons and large coupons, once again demonstrating its determination in market competition, and also to snipe at its biggest competitors.
Meituan’s takeaway subsidies are diverse.
Issuing “0 yuan purchase” red envelope coupons, users can get milk tea, burgers, etc. for free after receiving it, delivery needs to be full of a certain amount and pay the delivery fee, and it is completely free to pick up at the store, which directly attracts a large number of consumers to try to pick up at the store, increasing the customer flow of offline stores. In-store pick-up not only reduces the platform’s delivery costs, but also brings popularity to offline stores, helping to increase other consumption in stores.
After using these coupons, a cup of Americano is less than 4 yuan and free of delivery fees, and 5.5 yuan can buy 2 cups of Mixue Bingcheng’s stick fresh oranges, etc., such an affordable price makes consumers irresistible. These large full discount coupons are mainly aimed at high-frequency consumption categories, which can quickly stimulate consumption and increase order volume.
Set up a breakfast reservation coupon for the next day, and the discount of “25 minus 15” attracts users to order breakfast in advance, locking in future consumption and cultivating consumers’ consumption habits.
The breakfast market is a huge potential market, and users can form fixed consumption behaviors through reservation coupons, thereby occupying this market share.
Provide free coupons for delivery and in-store pick-up, mainly for milk tea, coffee and other products in tea shops, involving brands such as Chabaidao, Mixue Bingcheng, and Shanghai Auntie, further expanding the coverage of subsidies. Tea is a category loved by young people, and it can attract more young users through free coupons.
Set up supermarket fruit and vegetable red envelopes, such as 15 minus 15 red envelopes for supermarket fruits and vegetables, as well as up to 13 red envelopes for takeaway 15 or more, as well as 5 yuan and 7 yuan Alipay/Taobao channel exclusive non-threshold red envelopes, which lowers the takeaway consumption threshold and stimulates users to buy supermarket fruits and vegetables and other products. Supermarket fruits and vegetables are daily necessities, and subsidies can increase the proportion of online purchases by users in this category.
The original intention of Meituan Takeaway’s subsidy is to further activate market demand, lock in more consumers, and maintain an advantage in competition with other platforms. Through diversified subsidy methods, it covers different categories of goods and different consumption scenarios, which can meet the needs of more consumers and improve user stickiness.
Judging from the results, as soon as these subsidy measures were launched, they were warmly welcomed by consumers, and a large number of users received coupons and placed orders, and Meituan’s order volume data on the same day soared at an eye-popping speed. At 20:45 that night, Meituan’s intranet showed that takeaway orders successfully exceeded 100 million. Just over two hours later, as of 22:54, this number climbed to 120 million, of which more than 100 million were catering orders.
Obviously, this round of surprise attack caught its opponents off guard, and the 120 million result also allowed it to declare that it was the real and only king of the food delivery industry. However, it is worth reflecting on how many times will Meituan’s surprise attack be used, and what will be the follow-up effect?
JD Takeaway: Launch the “Double Hundred Plan” to do quality takeaway
On July 8, JD Takeaway officially launched the “Double Hundred Plan”, planning to invest more than 10 billion yuan in real money to support the sales of more category benchmark brands to exceed one million.
To achieve this goal, the platform will help merchants develop through a 5A-level merchant service system, which covers traffic support, marketing subsidies, explosive product operations, high-quality delivery and exclusive after-sales, aiming to help more high-quality catering merchants achieve sustainable growth in online business, while jointly providing consumers with a better takeaway experience.
As of July 8, nearly 200 catering brands have sold more than one million takeaway on JD.com, and data from third-party research institutions shows that JD.com ranks first in the industry with a 45% share in the quality takeaway market.
In terms of sales performance, Luckin, Cudi, Mixue Bingcheng, etc. have become the first batch of JD.com takeaway brands with sales exceeding 100 million; more than 10 brands such as Bawang Chaji, Gu Ming, Tustin, and Wallace have sold more than 10 million; Many well-known brands such as KFC, McDonald’s, Haidilao, Starbucks, Burger King, Small Vegetable Garden, Nancheng Xiang, Fish You Together, Yuan Jiyun Dumplings, Ziyan Baiwei Chicken and many other well-known brands have collectively entered the “Million Club”, fully demonstrating the strong attractiveness and market recognition of JD Takeaway in the catering field.
JD Takeaway adheres to a unique business philosophy, emphasizing that “good business does not rely on ‘burning’, let alone ‘brushing’!” Sustainability is real growth! and guided by “anti-involution, no routines, real growth”, demonstrating its determination to work hard in the field of quality takeaway.
However, in the highly competitive takeaway market, can JD Takeaway open up its own development path with differentiated strategies and adherence to quality, and bring a different takeaway ecology to merchants and consumers? This remains to be further verified by time.
Subsidy war: short-term benefits or long-term hidden dangers?
From JD.com’s 10 billion subsidies in March to the “Double Hundred Plan” in July, the subsidy war has lasted for four months. In the short term, subsidies do bring benefits to consumers and greatly increase market vitality; But in the long run, the food delivery market “great again” cannot rely solely on subsidies.
On the positive side, the subsidy war has indeed brought real benefits to consumers in the short term.
Taking the recent Taobao flash sale and Meituan’s subsidy activities as examples, consumers can buy their favorite goods and delicacies at very low prices, such as “0 yuan purchase” milk tea, a few yuan bento, etc., which greatly stimulates the desire to consume and allows consumers to enjoy real benefits.
At a time when prices are rising, these subsidies have reduced the cost of living for consumers to a certain extent and improved their quality of life. At the same time, for merchants, the significant increase in order volume has also brought more revenue. For example, in Jinan, a chain of tea shops saw a surge in orders during the subsidy period, and merchants generally made a small profit in the “explosive order”, such as a cup of milk tea with a starting price of 19 yuan, excluding delivery fees, platform commissions and other expenses, the merchant received about 9 yuan, and the actual price was 47% of the price; In the subsidy activities, the “explosive” drinks are concentrated at about 10 yuan, and the merchant gets about 8 yuan, and the actual price is 80% of the price, which is more profitable than the takeaway order before the subsidy.
From the perspective of industry development, the addition of new platforms and fierce competition, such as JD.com’s 10 billion subsidies have broken the original calm of the industry and accelerated the change of the industry.
In order to stand out from the competition, each platform continuously optimizes its own services, such as JD Takeaway optimizes the entrance, making it easier for users to find subsidy activities and view the estimated price, and improving the user’s shopping experience; Meituan Takeaway plans to invest 100 billion yuan to promote industry infrastructure, such as promoting the coverage of bright kitchens and bright stoves, which will help improve the service quality and transparency of the entire industry. This healthy competitive atmosphere can promote the continuous progress of the industry and promote the improvement of the overall level of the industry.
In addition, the subsidy war has also driven the development of related industries. The surge in takeaway orders has led to a significant increase in demand for takeaway delivery, providing riders with more employment opportunities and increasing their income. At the same time, related industries such as takeaway packaging and catering raw material supply have also developed due to the growth of orders, forming a complete industrial chain and promoting economic growth.
However, there are also many drawbacks to the subsidy war. From the perspective of the platform itself, it is facing huge cost pressure and declining profits in the short term.
On July 7, the stock prices of Meituan and Alibaba were both affected, with Meituan falling more than 3.5% and Alibaba falling more than 2.2% at one point, reflecting the capital market’s concerns about the platform’s “burning money” subsidy model.
Goldman Sachs warned that the short-term profits of the three giants would be under pressure, and under the benchmark scenario, Alibaba’s food delivery business would lose 41 billion yuan in the next 12 months, JD.com would lose 26 billion yuan, and Meituan’s EBIT profit would fall by 25 billion yuan. In the long run, if the platform cannot find an effective profit model and only relies on subsidies to maintain market share, it will face huge financial risks, and may even affect the survival and development of the platform.
Wang Xing, founder and CEO of Meituan, also reflects the possible adverse effects of the subsidy war from the side. He made it clear: “First, we are very welcome to enter more participants. Second, I reiterate Meituan’s firm opposition to involution. Third, we are confident in long-term development. ”
Wang Xing further explained that Meituan has been involved in the food delivery field since 2013 and has witnessed years of development and changes in the industry. Although the addition of the new platform has intensified competition, Meituan resolutely resists vicious competition characterized by below-cost price promotions, because this not only damages the consumer experience, but is also extremely detrimental to the smooth operation of merchants, which is contrary to the current anti-involution industry spirit. This kind of subsidy competition below cost price is a typical involution behavior, which cannot bring progress and development of the industry, but will only cause waste of resources and damage to the industry ecology.
For merchants, although the number of orders has increased, they also face many problems. Some merchants reported that the platform subsidy activities were not notified in advance, resulting in unprepared “explosive orders” and increased costs such as labor and ingredients. In order to cater to the platform’s price strategy, some merchants have to reduce the amount of dishes, such as the owner of a beef noodle restaurant in Chongqing in response to subsidy activities, making “compromises” on the amount of dishes, suggesting that consumers dine-in to eat enough beef noodles. This practice of sacrificing product quality in order to reduce costs not only harms the interests of consumers, but also affects the brand image and long-term development of merchants themselves.
From a consumer perspective, long-term dependence on subsidies can lead to distortions in consumption habits. After enjoying long-term low-price subsidies, consumers will have lower price expectations for goods, and when subsidies are reduced or canceled, it may be difficult to accept normal prices, thereby reducing consumption. This will not only affect the sales performance of merchants, but also affect the normal order of the entire market.
In addition, in order to reduce costs, there may be discounts in delivery services, product quality, etc., affecting the consumer experience.
From the perspective of industry development, excessive subsidy competition may lead to disorderly development of the market. Some weaker platforms may be eliminated because they cannot afford the cost of subsidies, leading to increased market concentration and the formation of a new monopoly situation. Once a monopoly is formed, the platform may increase the commission ratio and reduce the quality of service, harming the interests of consumers and merchants. At the same time, over-reliance on subsidies will also make the platform lack innovation motivation, and it does not think about how to attract users by improving service quality and optimizing business models, but blindly competes through subsidies, which is not conducive to the long-term development and progress of the industry.
Judging from the subsidy strategies of major platforms, this subsidy war has undoubtedly brought great vitality to the food delivery market. For example, Taobao flash sale and Ele.me’s subsidies always put the interests of consumers first, and impress every user with sincere subsidies and high-quality services. They do not engage in war of words, nor do they engage in empty marketing methods, but are down-to-earth for the welfare of consumers, which not only enhances their own brand image, but also sets a good example for the entire food delivery industry.
At present, major platforms have begun to explore differentiated paths: Meituan focuses on industry ecological co-construction, Taobao flash sale focuses on full-category collaboration, and JD Takeaway emphasizes quality and supply chain – these directions may be more valuable than mere subsidies.
After all, subsidies are only catalysts, not the final answer. The next growth point of the food delivery market will definitely return to the essence of “user experience, merchant value, and industry efficiency”.
