- Data analytics
China's new competition law bans below-cost pricing in food delivery
Beijing is cracking down on 'involution' in food delivery. Discover how data intelligence helps platforms pivot from subsidies to sustainable innovation.
Beijing is intervening in the digital economy to stop what it calls toxic price competition, or involution. New regulations are forcing food delivery giants like Meituan and JD.com to pivot away from massive consumer subsidies and toward high-tech innovation.
Winner-takes-all aggression has long defined China's food delivery market. In 2025, the three major players burned through roughly $14 billion in just two quarters to gain market share, offering deep discounts to win users and often selling services below cost. Consumers enjoyed the cheap meals, and the government now argues the cycle prevents long-term technological progress, such as automated delivery and robotics.
The new Anti-Unfair Competition Law targets this behavior directly: Article 14 now bans platforms from forcing or encouraging below-cost pricing. The old playbook of spending for scale is effectively over, and companies must hold their market shares without relying on the subsidy tap, a massive change in how platforms manage their margins and merchant relationships.
Regulators looking for below-cost violations analyze the total discount stack, including merchant-funded promos and platform-wide coupons. Tracking these variables manually across millions of restaurants is impossible, so data intelligence has become a defensive tool. Analysis of competitor discount patterns and merchant participation rates helps platforms keep their pricing within legal bounds while remaining attractive to the customer.
Promotion data separates loyalty spend from wasted subsidies
Platforms need to transition their budgets into research and development as the focus moves from price to service quality. No company can stop all promotions overnight without losing users to a competitor that spends more efficiently, so delivery platforms should run a promotion analysis to monitor market activity and identify which subsidies actually drive loyalty and which merely burn cash in a way that risks regulatory scrutiny.
Moving from raw discounting to data-driven promotion management protects margins and satisfies the government's push for innovation. The winners will be the platforms that can prove they compete on efficiency and technology, beyond the size of their subsidy fund.
If you need to know which of your promotions drive loyalty and which only burn cash, contact DoubleData.
