Goodbye to Unhealthy Price Wars, Hello to "Brand Value War"
Every Brand Value Research Institute Feng Kuitao
August 1st, Meituan, Ele.me, and JD.com, three major food delivery platforms, made a rare joint statement, announcing the end of unhealthy price wars and returning to fair competition.
The news sparked a rapid reaction in the capital market, with Meituan, Alibaba, and JD.com's stock prices surging, with the highest increase reaching over 3%.
The capital market has cast its vote of confidence in gold, announcing the end of China's food delivery industry's unhealthy price wars and returning to "brand value war".
It is undeniable that the 18th market regulator's warning on July 7th, asking for a halt to unhealthy price wars and prohibiting the transfer of costs to merchants, has already put a stop to this price war; but the internal damage caused by the price war to the industry and the market may be the reason why major platforms cannot help but step back.
Because everyone feels the same pain, the price war is a "zero-sum game" that has no winner. Going down this road only means "three losses for all parties".
Many years ago, internet platforms fell into the vicious cycle of "subsidy-burn-money-monopoly-retaliation". From ride-hailing to community group buying, low-price strategies may be able to harvest a short-term market share, but they will eventually deplete the industry's lifeblood: squeezing profits from merchants, undermining rider interests, and reducing consumer experience, leaving only a small amount of profit.
When subsidies become the only competitive weapon, platforms' core abilities, including technology, services, and ecosystem, are neglected. In reality, subsidy-induced irrational competition has deviated from its commercial essence.
On the surface, consumers seem to be the biggest winner in the price war. With 0 yuan milk tea and 1 yuan fast food, the daily average food delivery order volume soared from 1 billion to 2.2 billion. However, chain brands occupy 90% of orders, while small merchants unable to keep up are eliminated, forming a distorted ecosystem where platforms burn money and merchants bleed. This irrational competition not only reduces merchant profits to a razor-thin margin but also seriously erodes consumer trust.
The industry laments the destruction of China's catering spirit by price wars. Even some platforms admit that the soaring order volume is mostly a bubble, and from a commercial perspective, it has no meaning. The capital market has already grown tired of this "digital bubble".
When unhealthy price wars come to an end, disorderly expansion retreats, and massive quarterly industry losses are expected to be significantly reduced, which is the fundamental logic behind the stock price surge.
The collective shift of three major platforms marks the entry of China's internet platforms into a new stage of "brand value competition", shifting from "capital-driven" to "rule-based collaboration". The stock price rebound is actually a strong recognition of the market's revaluation of brand values.
Returning to brand values means correcting commercial logic, reconstructing industry ecosystems, and recreating enterprise competitiveness. Compared with price wars, in this new battlefield, food delivery platforms' paths will become wider.
It is a revolution of quality, meaning moving from scale-first to quality-first. For example, Meituan's "Feng Lou Kitchen" uses concentrated kitchen and live broadcast modes to let users view the production process for each dish; JD.com's "Qixian Small Kitchen" adopts self-operated models, controlling food materials and the entire production process; Ele.me's "Optimal Store Plan" takes a unique path, investing heavily in supporting high-quality merchants and using resources instead of simple subsidies.
It is an evolution of efficiency, meaning moving from human-driven to technology-enabled. For example, Meituan has already delivered 1 million intelligent helmets to riders, freeing up hands through voice interaction, detecting falls automatically, and optimizing routes to improve efficiency; JD.com's food delivery has achieved average delivery times by coordinating logistics, greatly reducing the pressure.
It is a reconstruction of ecosystems, meaning moving from zero-sum games to multi-party cooperation. For example, Meituan provides pension insurance coverage for millions of riders; JD.com provides scholarships for the children of frontline employees; Ele.me establishes a merchant rights guarantee fund. The three major platforms have also simultaneously pledged not to force merchants to participate in subsidies and ensure their right to set prices independently, responding to the requirements of regulatory bodies and breaking the "platform takes away from merchants" old pattern.
Everyone knows that the battle for food delivery is a game for 40 billion yuan's instant retail market. The collective shift of three major platforms not only represents the return of commercial logic but also awakens long-termism, which is the strategic upgrade of internet companies from "traffic thinking" to "brand thinking". In the future, the food delivery industry will no longer be a battle for subsidies, but who can truly become the creator of beautiful lives, the enabler of merchant growth, and the contributor to social value.
The end of unhealthy price wars is only the starting point for brand value competition.