Platforms to rein in aggressive discounting

The Star

3 days ago

JD delivery worker Li Hualu displays a notification that says he now has full social insurance and a housing provident fund on March 6 in Hangzhou, Zhejiang province. Local media reported that he was the first delivery rider to enjoy such benefits in the city. BU ENSA/HANGZHOU DAILY
China's leading e-commerce and food delivery platforms including Meituan, Taobao, Ele.me and JD have pledged to rein in aggressive discounting practices, in a coordinated response to foster fairer competition and a more sustainable digital economy.
The four firms released statements on Friday outlining a range of commitments, including better planning of subsidies, refraining from irrational promotional campaigns, and avoiding selling goods and services significantly below cost.
The moves come just weeks after China's top market regulator summoned major platforms over concerns about cutthroat competition in the sector.
Meituan published an open letter titled Prospering the Industry Ecosystem, Resisting Disorderly Competition via its official WeChat account, saying it would "firmly regulate promotional activities and eliminate unfair competition."
The company emphasized that all subsidies must comply with antitrust laws and must not involve pricing far below cost. It also committed to transparent disclosure of subsidy amounts, avoiding exaggerated marketing, and ensuring that merchants retain the right to set prices independently.
Meituan said it would protect the interests of small and medium-sized businesses, apply subsidies without discrimination, and aim to build a multi-stakeholder ecosystem that benefits consumers, vendors, delivery workers and the platform alike.
JD made similar pledges via its internal bulletin, stating that it would "resist vicious competition" and focus instead on differentiated offerings and quality service. The company said it would rely on technological innovation and supply chain upgrades to build long-term competitiveness and consumer trust.
"Subsidies should not be a race to the bottom. We believe in winning users through quality, price and service — not by burning cash," the company said.
Taobao's flash sales subsidiary and Ele.me issued a joint statement, pledging to "resolutely oppose malicious competition and jointly foster a win-win ecosystem."
The two Alibaba-owned platforms said they would better tailor subsidies to the needs of both consumers and merchants, avoid irrational large-scale giveaways such as "0-yuan purchases", and uphold merchants' rights to be informed, to choose and to set prices.
The flurry of statements followed a July 18 announcement from the State Administration for Market Regulation, which said it had summoned several platforms and ordered them to curb improper promotional conduct and to participate in competition rationally.
The regulator urged platforms to take primary responsibility for industry standards and "correct irregular promotional activities" to support the healthy development of the catering and delivery sectors.
The move also aligns with broader policy goals set during the Central Economic Work Conference in December, which called for greater oversight of monopolistic behavior and disorderly competition in the digital economy.
Those priorities were further reinforced in the 2025 Government Work Report, which advocated eliminating market entry and exit barriers and creating a unified national market.
Li Mingtao, chief e-commerce analyst at the China International Electronic Commerce Center, said the coordinated pledges marked a "proactive" shift by platforms to address early signs of violations and unfair competition in the food delivery sector.
"All these efforts sent a clear signal on regulating market behavior and set an example for fostering a healthier, more orderly platform economy," Li said. - China Daily/ANN