Chinese Food Delivery Platforms Ele.me and Meituan
"We Will Regulate Promotional Activities and Eradicate Unfair Competition"
Chinese food delivery platforms, including Ele.me and Meituan, as well as related companies, have issued a joint statement pledging to refrain from excessive competition and to pursue mutual growth. This statement comes after Chinese authorities repeatedly warned food delivery platforms about engaging in excessive competition.
Chinese authorities issued a warning to food delivery platforms engaged in excessive competition, prompting related companies to release a statement pledging to curb cutthroat competition and promote mutual growth. Photo by Getty Images
According to Yonhap News Agency on August 1, citing local Chinese media such as Jiemian News, Meituan announced its position on its official social media account that day. The statement said, "We will strictly regulate promotional activities and eradicate unfair competition," and added, "We will not force participating merchants to join subsidy programs, and we will guarantee the rights and interests of delivery riders," promising to foster mutual growth.
Alibaba Group's shopping platform Taobao and delivery platform Ele.me also issued a joint statement, saying they would provide subsidies to consumers and participating merchants in a reasonable manner based on demand. They added, "We will refrain from irrational promotions or marketing activities such as 'zero-yuan purchases.'
The successive pledges by delivery platforms to refrain from excessive competition came after the State Administration for Market Regulation, China's market regulation and supervision authority, summoned major delivery platforms such as Meituan, Ele.me, and JD.com on July 18 to issue a warning.
The regulatory authorities urged the creation of an ecosystem in which all stakeholders?including consumers, participating merchants, and delivery riders?can achieve a win-win outcome, thereby promoting the healthy and sustainable development of the industry.
The National Development and Reform Commission of China also emphasized at a press conference that it would encourage appropriate competition in emerging sectors and eliminate cutthroat competition in traditional sectors.
Subsequently, last month, the National Development and Reform Commission and the State Administration for Market Regulation released a draft amendment to the "Price Law of the People's Republic of China." This is the first amendment to the Price Law in 27 years since its implementation in 1998.
The amendment prohibits dumping sales below cost in order to drive out competitors or monopolize the market. However, it makes exceptions for reasonable price reductions, such as for fresh produce or seasonal goods. The scope of dumping practices has also been expanded from goods to include services and platforms.
Previously, on July 30, at a meeting of the Central Politburo?the highest decision-making body of the Communist Party of China?presided over by President Xi Jinping, there was also an order to crack down on disorderly low-price competition among companies.
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