Editor's note: The expert consultation group of the State Council's Anti-Monopoly and Anti-Unfair Competition Committee held a meeting on May 21 in Beijing. The meeting reiterated the need for comprehensive measures to address "involution" in competition. Additionally, an article in the People's Daily last week pointed out that low-level "involution" competition wastes social resources and is detrimental to industry growth in the long term. In fact, the concept of addressing "involution" competition was first mentioned in this year's National People's Congress when the Government Work Report highlighted the issue, drawing attention to the topic. The renewed focus on this issue now raises questions about its implications.
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. The expert consultation group of the State Council's Anti-Monopoly and Anti-Unfair Competition Committee held a meeting on May 21 in Beijing. The meeting reiterated the need for comprehensive measures to address "involution" in competition. Additionally, an article in the People's Daily last week pointed out that low-level "involution" competition wastes social resources and is detrimental to industry growth in the long term. In fact, the concept of addressing "involution" competition was first mentioned in this year's National People's Congress when the Government Work Report highlighted the issue, drawing attention to the topic. The renewed focus on this issue now raises questions about its implications. To discuss this, we invited Li Daxiao, former chief economist of a securities brokerage firm; Ren Xinglei, executive president of the China Association of Small and Medium Commercial Enterprises; and financial commentator Guo Shiliang for analysis. Hello, everyone!
The concept of "anti-involution" first gained attention earlier this year when delivery platforms gradually eliminated penalties for riders who exceeded delivery times, marking a significant shift in the delivery industry. However, this time, the People's Daily article highlighted the delivery platforms again due to involution. Mr. Ren, what do you think?
【Ren】The dramatic shift in the role of delivery platforms is a complex result of intertwined industry competition and deepening policy enforcement. In 2025, under the central government's anti-involution policy, platforms like Meituan responded swiftly, showcasing a proactive reform attitude. Meituan canceled penalties for delivery riders exceeding time limits, alleviating their psychological and mental burdens, and invested 1 billion yuan in merchant subsidies to help businesses relieve cost pressures. These measures precisely targeted the long-standing pain points in the industry, significantly enhancing riders' work motivation and providing merchants with broader profit margins, serving as a model for correcting vicious competition and improving the resilience of the industry chain.
In February 2025, JD.com Delivery entered the market aggressively with a zero-commission strategy, recruiting quality dine-in merchants to focus on a high-end differentiated approach. This action disrupted the existing market balance.
To maintain their market share, Meituan and Ele.me were forced to follow the price war, and their original anti-involution results were greatly reduced. Luo Wen, director of the State Administration for Market Regulation, criticized the platforms for using capital subsidies to create ultra-low prices, and clearly pointed out that this practice deviated from the competitive direction of quality and service as the core. The food delivery industry has thus changed from a pioneer in anti-involution to an object that needs to passively accept regulatory rectification, highlighting the imbalance between self-discipline and supervision in the development of the industry.
【Anchor】Good. Mr. Li, what are your thoughts on this?
【Li】Anti-involution, at its core, is about reducing inefficient competition. This is a major trend and direction in our society today. It represents a shift from scale to quality and value. In various industries across society, we are starting to combat involution. This is correct and aligns with social development. It reflects progress in society. The platform economy, especially in the food delivery and retail sectors, has reached a new stage. Actions like aggressive subsidies and penalties for delays are outdated forms of competition. They do not align with the genuine interests of businesses, the direction of social development, or the evolution of the industry. Thus, platform companies are generally engaging in anti-involution against this broader backdrop.
【Anchor】Good. Mr. Guo, in your view, what are the differences between the earlier actions of food delivery platforms that initiated the "anti-involution" trend and the current situation of involution?
【Guo】First, the food delivery industry is a profit-driven sector. From the perspective of delivery companies, even under the influence of anti-involution policies, they still pursue profit maximization. In practice, although algorithm rules are being mandated to increase transparency, delivery companies may adopt cost-shifting strategies, leading to hidden assessments or exploiting social security loopholes to evade social security responsibilities. This has resulted in inadequate retirement insurance protection for delivery riders.
Moreover, while the transparency of algorithm rules is increasing, this transparency can also intensify competition as algorithms upgrade. The cycle of moving from anti-involution to renewed involution and now back to anti-involution reflects an ongoing search for a balance between the continuous expansion of capital and the genuine interests of workers. The food delivery industry has experienced rapid development over the years, but it is now in a stage of zero-sum competition. There are significant uncertainties in how to transition from zero-sum competition to an incremental market. The growth rate of the food delivery market has noticeably slowed down since 2019. Therefore, platforms are gradually transitioning from zero-sum competition to pursuing incremental markets, but this process is certainly not easy.
【Anchor】Good. Mr. Ren, what do you think?
【Ren】Why did they fire the first shot? Firstly, it's due to high social sensitivity. The food delivery industry connects over 6 million riders with millions of small and micro enterprises, and every move they make is closely related to people's livelihoods. The anti-involution measures implemented by platforms, such as canceling penalties and subsidizing merchants, directly benefit practitioners and align with the public's expectations for a fair, reasonable working environment and a healthy business ecosystem. This makes it easy to gain support and encouragement from policymakers. There is significant room for efficiency optimization. Food delivery platforms have a unique foundation for optimization. By making algorithms public, they allow riders and merchants to understand the logic behind order distribution, reducing unreasonable order assignments.
Meituan's flash purchase service saw orders exceed 18 million on Flash Purchase Day, which is a strong testament to its success. New players like JD.com are recognizing the opportunity and attempting to gain a share of the market through subsidy strategies. This has triggered intense competition for market share. The issue of homogenized competition remains unresolved, as various food delivery platforms lack significant technological or service differentiation in their core business models and offerings. This makes it difficult to break free from the conventional mindset of using subsidies to attract users and merchants, leading to an excessive reliance on price competition. Consequently, the entire industry has fallen into a path dependence characterized by low-level repetitive competition.
【Anchor】In fact, as we mentioned at the beginning, "anti-involution" has already become a hot topic during this year's Two Sessions. After more than two months, the authorities have once again raised the issue of "anti-involution." Mr. Guo, what do you think it indicate?
【Guo】This time, the authorities have once again raised the issue of anti-involution, signaling that the food delivery industry needs regulation. After all, the food delivery sector is closely tied to public welfare and involves health and safety concerns. Therefore, the excessive expansion of the food delivery industry needs to be corrected. It is not only important for algorithm rules to be transparent, but also crucial to consider the genuine interests of consumers, merchants, and riders. Find a relative balance while pursuing capital expansion.
【Anchor】Good. Mr. Ren, what do you think it indicates?
【Ren】The official reiteration of anti-involution after the National Two Sessions marks a transition in policy from early principle-based advocacy to a new stage of refined governance. The scope of the policy has expanded. The regulatory focus has shifted from traditionally overcapacity industries, such as photovoltaics and steel, to the platform economy, which is closely linked to public welfare. The food delivery industry, due to its typical nature and prominent issues, has become a focal point of attention, highlighting the government's determination for comprehensive market regulation and safeguarding public welfare.
There is also an upgrade in enforcement measures. Luo Wen, director of the State Administration for Market Regulation, proposed targeted crackdown by sector, specifically targeting malicious price comparisons and predatory pricing practices in the food delivery industry. This indicates that the sector will soon face stricter special reviews, and the previously lax competition methods will be subject to severe constraints.
Additionally, there is an emphasis on building long-term mechanisms that stress industry self-regulation within a unified national market. Food delivery platforms are required to proactively adhere to regulations, strengthen self-restraint, and work towards eliminating local protectionism and unfair practices, such as tax rebates that undermine fair competition, to create a unified, fair, and orderly market environment for the food delivery industry.
【Anchor】Earlier, the State Administration for Market Regulation and five other departments interviewed food delivery platforms, including JD.com, Meituan, and Ele.me, demanding fair competition and the protection of the rights of consumers, merchants, and delivery riders, opposing "involution."Mr. Li, what related policies do you expect to be introduced after this discussion, and what impact do you think they will have on the relevant industries?
【Li】Our response to the key issues raised during the Two Sessions is a follow-up and feedback. Firstly, we are intensifying our efforts to address the inwardly competitive practices of platform companies. I believe this will help advance anti-involution in the food delivery and retail sectors, promoting fair competition and reducing inefficiencies. We need to focus on creating more value for customers and users. By competing on quality and value rather than engaging in inward competition, we can foster a healthier environment. Ultimately, this will benefit both food delivery companies and customers, enhancing the overall service quality on platforms. The industry will experience orderly competition, contributing to sustainable development. In the future, a series of regulatory policies may be introduced to ensure the healthy and stable development of the industry.
【Anchor】Good. Mr. Guo, what do you think?
【Guo】The recent interviews with JD.com, Meituan, and Ele.me by five government departments, demanding fair competition and the protection of the rights of consumers, merchants, and delivery riders, essentially oppose involution and aim to regulate healthy market behavior. In the context of zero-sum market competition, we can expect algorithm audits to gradually become more transparent, allowing technology to evolve positively. This transformation towards constructive technology is an inevitable trend for reconstructing the healthy development of the entire industry.
Looking ahead, on the one hand, the rights of riders, including social security coverage, will gradually improve. On the other hand, the pressure on merchants regarding fees will significantly ease, ultimately enhancing the genuine interests of consumers.
【Anchor】Recently, it's earnings season, and several internet platform companies have announced their results. For instance, Meituan clearly stated last week that it opposes"low-price, low-quality inward competition."In the context of more and more companies entering the market, Mr. Li, how do you think healthy competition should unfold? What breakthroughs can food delivery platforms seek?
【Li】I believe that with more food delivery platforms entering the market, we need to provide riders with better protection. We should ensure that riders can work safely, with greater security and stability. At the same time, platforms should achieve sustainable profits and develop in a way that allows them to offer higher-quality services and better food to customers. This situation should be attainable.
【Anchor】Yes, Mr. Ren, what are your thoughts?
【Ren】I think the key transition from involution to evolution in the food delivery industry demonstrates that anti-involution is not a short-term action, but rather a profound reconstruction of competitive paradigms. In the short term, strong policies need to play a restrictive role to eliminate the breeding ground for vicious competition and safeguard industry development. In the long run, platforms must rely on continuous technological innovation, optimization of user experience, and ecosystem construction to create new growth poles.
As the food delivery industry shifts from competing purely on subsidies to focusing on innovations like satellite stores, drone delivery, and rider development, it can truly build a healthy ecosystem that meets central expectations, achieving sustainable, high-quality development.
【Anchor】OK, thank you. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung, Sammi | Translate: Kato Ip | Proofread: Chris Liu
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