Beijing Business Daily (Reporter Guo Binlu) On July 24, a Beijing Business Daily reporter learned that Meituan recently held a symposium on high-quality development of the food delivery industry in Shanghai, inviting merchants, academics and industry association representatives to offer suggestions on industry development issues. At the symposium, many national chain brands, local restaurants in Shanghai, and individual merchants expressed concerns: being forced to participate in price wars, unit prices for takeaway customers falling by 7 to 10 yuan, income received reducing by 15%, customers may reduce consumption once subsidies are suspended, etc.
The person in charge of the takeout business of a leading tea drink brand said that this kind of irrational subsidies brings "false prosperity". "We usually pay about 20 yuan for a cup, but now after the subsidy, users can buy a cup for only a few yuan. When the subsidy is gone, many people will stop drinking or reduce consumption." He said that ultra-low prices have also changed consumption habits and perceptions. After the subsidy was reduced last month, the unit price and order volume both dropped, making it difficult to restore the normal price system.
"Without subsidies, even old customers were lost, but after subsidies, profits dropped and survival was at risk." Some merchants said that although high subsidies brought short-term growth, after the subsidy stopped, "customer prices and orders dropped", which is not conducive to long-term development.
In addition, the order peak caused by large-scale subsidies has also increased the work pressure of front-line employees in stores. The person in charge of the takeout business of a tea drink brand gave an example. Normally, if a store has about 100 takeout orders, it requires two employees. If the order is doubled, the manpower will also be doubled. "But the problem is that I can't judge whether the doubled order is normal. If the subsidy stops later and the orders are reduced, the extra labor cost will not be covered." Therefore, under the current situation of high uncertainty of subsidies and large fluctuations in daily orders, stores are conservative in manpower arrangements, which has also led to a linear increase in the labor intensity of existing employees.
Experts attending the meeting called on price wars to compress the living space of small and medium-sized businesses, and at the same time consume a large amount of resources in subsidies, which inhibits the innovation ability of the industry. It is recommended to ensure fair competition opportunities for small and medium-sized businesses and avoid vicious price wars.
Yuan Zhe, a researcher at the School of Economics of Zhejiang University, pointed out that the current social focus is more on the increase in sales of large chain brands under the subsidy war, but for quality merchants and small and medium-sized merchants with high unit prices, the impact of the price war is mainly negative. When platforms and catering companies invest a large amount of resources in the subsidy war, R&D expenditures may be compressed. In the long run, this misallocation of resources will inhibit the transformation and upgrading of the industry, and ultimately weaken market vitality and consumer welfare. Platforms should invest more resources in the infrastructure construction of the food delivery industry to help catering companies reduce operating costs and improve the endogenous efficiency of the industry.