On February 11th, JD.com officially launched its food delivery service, marking a pivotal entry into a market dominated by established players like Meituan and Ele.meAs part of this launch, JD announced a recruitment drive for “quality dine-in restaurants,” promising zero commissions for merchants that join by May 1, 2025. This bold move addresses a common pain point in the food delivery industry: exorbitant commission rates.

Interestingly, JD had already dipped its toes into the food delivery pool prior to this official launchIn late October 2024, reports emerged highlighting that JD’s instant delivery service, JD Miao Song, had started offering milk tea products delivered straight to customers’ doorsAt that time, JD had not yet branded itself as “JD Delivery,” which indicates a more substantial investment into this growing sector.

As JD shifts into the delivery space, competitors are taking noticeAlongside giants like Meituan and Ele.me, platforms such as Douyin and Kuaishou have also been venturing into the food delivery arenaThe future landscape of the market remains uncertain, and with JD's entry, Ele.me has announced plans to strengthen its logistics operations, hinting at an intensifying competitive environmentIndustry experts, including Zhuang Shuai, founder of Baichuan Consulting, describe JD’s approach as a defensive strategy aimed at leveraging frequent food delivery orders to promote its instant retail business and mitigate competitive pressures.

Merchants grapple with the dual-edged sword of food delivery platforms

Wang Duan, a pseudonym for a restaurant owner in a provincial city in Hubei, operates a chain of Chinese hamburger shopsHe recounted overhearing delivery workers discuss their city’s impressive daily order volume of over 10,000, with peaks reaching up to 20,000. Given that his city has just over a million residents, this statistic implies that daily, roughly one in 100 residents places an order.

For many restaurants, delivery has become a critical revenue stream

Advertisements

Currently, more than half of Wang’s daily sales come from delivery ordersRevenue figures for January 2025 show that his store’s delivery sales exceeded 90,000 yuan, accounting for around 50% of overall revenue.

“In January, the proportion of dine-in was higher due to the Spring Festival,” Wang explained. “But in regular months without holidays, deliveries usually account for a larger share.” According to his records, the share of delivery sales in November and December 2024 reached 53% and 55% respectively.

For beverage sellers, the delivery share can be even higherXiaozhang, another business owner in Hubei running a “Houston Auntie” shop, shared that her sales hover around 2,000 yuan daily, with delivery accounting for about 60% of the business.

For many in the food service industry, joining delivery platforms is crucial for expanding their customer base and boosting salesHowever, the high commission rates on these platforms leave many merchants torn between appreciation and resentmentIndustry observers note that the food delivery landscape has developed into one where high commission rates threaten the viability of smaller merchants, pushing some out of business.

High commissions have fueled a cycle of poor practices in the industry, including the prevalence of subpar delivery servicesConsequently, JD's commission-free initiative could significantly bolster the health of the food delivery sectorLower commissions could mitigate operational costs for merchants and enhance food quality.

Both Wang’s hamburger shop and Xiaozhang's store are subscribed to Meituan and Ele.me, where the commission rate is generally around 20%. It’s worth noting that commission rates can vary based on city, business type, and exclusivityAccording to information from Meituan, they charge a technical service fee ranging from 6% to 8%, plus additional fees for delivery personnel.

Wang illustrated that some of his orders indicate that commission fees can sometimes exceed 20%, especially when discounts are applied

Advertisements

He suggested that in a bid to maintain profits, some businesses may sacrifice quality or cut costs.

Chen Liteng, an analyst from the E-commerce Research Center, noted that commission fees represent a key revenue source for delivery platformsAs competition intensifies and costs rise, these fees have drawn criticism from merchants, particularly smaller restaurants where high commission rates can severely cut into profit margins and even threaten their existence.

Interestingly, while JD's zero-commission strategy may sound appealing, a closer inspection reveals that only merchants who register before May 1, 2025, receive full commission waiversEstablished merchants saw their commissions waived starting February 11. However, JD has yet to disclose the commission rates for future users.

Insider sources indicate that JD's zero-commission initiative only pertains to the 6% to 8% technical service fee and applies exclusively to pre-approved quality merchants.

Experts like Chen stress that delivery platforms should establish reasonable commission rates based on individual circumstances and market demand, while regulatory bodies must enhance oversight and normativity within the delivery industry.

The return of fierce competition in the food delivery market

The food delivery sector previously witnessed fierce battles that seemingly culminated in a three-way competition between Meituan, Ele.me, and Baidu WaimaiHowever, intensified capital pursuits led to Ele.me being acquired by Alibaba, while Baidu exited the market, cementing a “2+N” market structure.

JD and other tech giants attempted to infiltrate the food delivery sector, yet neither Douyin nor Kuaishou has managed to substantially threaten the stronghold of Meituan and Ele.me, with Meituan showcasing particularly impressive market performance.

Xiaozhang reported that her sales ratios between Meituan and Ele.me saw about 80:20—with peaks even reaching 85:15. Similarly, Wang’s shop primarily sees sales from Meituan, capturing around 40% of total revenue, while delivery sales split around 75% Meituan to 25% Ele.me.

While merchants are excited about JD's entry as potentially beneficial competition, how much impact this new player will have remains uncertain

Advertisements

JD's rich logistics distribution and instant retail experience indeed position it well for a successful foray into food delivery.

Analysts like Chen believe that zero commissions could quickly attract numerous merchants, giving JD a promising startNonetheless, they caution that this is merely an initial strategyLong-term success for JD in food delivery hinges on continued value offerings to merchants, such as supply chain support and data analytics.

Near the end of 2024, Xiaozhang’s shop had already joined JD's instant delivery service, yet she reported almost no orders coming through this platform. “Many days I receive zero orders,” she shared, “Few people in smaller towns know they can order food through JD, so it may take time for this service to mature.”

This hints that JD needs to invest significantly in user marketing to establish consumer awareness and recognition of “JD Delivery.”

Furthermore, insiders imply that currently, JD is primarily seeking to onboard “quality dine-in restaurants” through meticulous vetting processes including reviewing business licenses, shop images, and in-person evaluations to ensure qualityRecruitment is currently limited to the Beijing area, with merchants from other regions invited to apply but not guaranteed immediate onboarding.

While the majority of the market is held by Meituan and Ele.me, new entrants like JD and Douyin continue to emerge without significantly altering the competitive landscapePresently, JD is focusing on high-quality delivery to distinguish itself from its competitorsHowever, Zhuang suggests that if JD aims to disrupt the current market, it will need substantial efforts in expanding merchant resources, optimizing service experiences, and possibly implementing subsidy policies—a long-term endeavor.

In Zhuang’s view, JD’s venture into food delivery feels like a tactical response to perceived threats from Meituan, whose business model links high-frequency delivery services to drive less frequent e-commerce sales

Advertisements

Advertisements