Several ambitious internet companies have set their sights on China’s local lifestyle sector, but few have been as aggressive as JD.com.
Fang Li, a digital operations manager working in the restaurant industry, has already met with three major players trying to make inroads.
The first was Douyin. In 2021, Fang, then overseeing online operations for a fast food chain with over 1,000 locations, received an invitation to join Douyin’s pilot program for local services. Douyin, armed with massive traffic and strong intent, conducted three rounds of testing. Fang’s team followed closely.
The second was Xiaohongshu. In early 2024, the platform soft-launched a group buying feature, but its lack of commitment and operational depth left Fang skeptical. He declined the invitation.
Now, it’s JD.com’s turn—this time targeting the most challenging segment in local lifestyle services: food delivery.
In November 2024, Fang was approached by senior executives from JD Daojia, JD.com’s local on-demand delivery arm. Their message was clear:
- JD.com considers local lifestyle services a strategic priority.
- It will offer highly favorable terms for merchants to gain traction.
- Food delivery will be a core focus of its investment.
To underscore its commitment, JD.com’s founder Richard Liu personally requested the teams to collaboratively build the food delivery model from the ground up.
Food delivery, like all platform businesses, relies on two key factors: merchants and consumers. But unlike e-commerce or group buying, it also hinges on fulfillment capabilities, an area where JD.com has a critical advantage.
Only a handful of companies in China operate their own large-scale, last-mile delivery networks. JD.com, through its control of Dada Nexus, is one of them. As of 2023, Dada Nexus had 1.2 million active delivery riders—a significant figure, though still well behind Meituan’s 7.45 million.
More importantly, parcel delivery alone isn’t enough to maximize network efficiency. Only a high-frequency, essential service like food delivery can fully leverage an on-demand logistics system, creating economies of scale.
Recognizing JD.com’s intent, Fang decided to test the waters, using his brand’s Beijing stores as a pilot case.
Early results were mixed. Daily orders per store hovered in the low double digits, and in some cases, dropped to zero due to inconsistent traffic.
Then, on February 11, JD.com announced a 0% commission policy for food delivery merchants, shaking the industry overnight. The quiet pilot phase suddenly turned into a high-profile national rollout, and Fang immediately saw orders surge.
A week later, JD.com pledged full social security benefits for its delivery riders—directly addressing two of the food delivery industry’s biggest pain points: merchant commission rates and rider welfare.
Merchants welcomed the competition. No one likes a monopoly.
“You can’t imagine how much merchants care,” said Zhao Ming, an agency partner for Meituan’s food delivery business.
A week before JD.com’s announcement, one of Zhao’s sales reps had reached out to over 20 restaurant owners, offering operational services for Meituan. Most never even responded.
But on the day JD.com launched its zero-commission push, that same sales rep sent a simple message in a group chat: “JD.com is entering food delivery. If you meet the requirements, check it out.”
Within minutes, 90% of recipients responded, eager to learn how to sign up. He spent the entire afternoon replying to messages.
Yet, food delivery is a high-barrier business. It demands strong logistics, long-term investment, and the patience to endure losses. Meituan has spent years refining a powerful flywheel that tightly integrates merchants, consumers, and riders. Breaking into this ecosystem won’t be easy.
Over the past month, JD.com’s food delivery ecosystem—including merchants, service providers, and sales teams—has experienced waves of excitement, hesitation, confusion, and even frustration. Relaunching an old internet business model in 2025 is proving to be anything but easy.
“Bring in the merchants first. We’ll figure out the rest later.” That was the key takeaway for Si Yuan, a JD.com food delivery employee, during a company-wide meeting on February 14.
The meeting was intended to boost morale. Dada Nexus chairman Kevin Guo urged the team to go all in on food delivery, emphasizing one core directive: aggressively expand merchant supply.
What followed was a frenzy of activity. Almost overnight, JD.com employees, service providers, and freelance sales reps flooded social media.
“The whole industry was buzzing. Everyone felt like it was the early days of Meituan and Ele.me’s city launches—everyone wanted to make a quick buck while the window was open,” said Wu Hai, who paid a RMB 100,000 (USD 14,000) deposit to become a JD.com food delivery service provider on February 14.
JD.com offered service providers an incentive of RMB 200 (USD 28) per onboarded merchant. Their job? Convince qualifying restaurants to join JD.com’s platform.
Within a week, Wu had recruited nearly 400 offline sales reps for his Sichuan-based team. His team went door-to-door, covering entire streets:
“Every merchant we approached was interested, unless they had never considered doing food delivery at all.”
“Right now, service providers are everywhere. Even internal teams from JD.com’s restaurant and supermarket divisions are helping out,” Si said.
By February 20, when Si visited a key account (KA) restaurant in a provincial capital, he barely had time to introduce JD.com’s zero-commission policy before the merchant interrupted him:
“A service provider just offered me RMB 150 (USD 21) per store to sign up. What can you give me?”
It was then that Si realized—the merchant had already been approached by dozens of service providers and even JD Daojia’s supermarket team.
The enthusiasm was undeniable, but some industry veterans viewed JD.com’s approach with skepticism.
Despite witnessing firsthand how eager merchants were to join, agency partner Zhao hesitated to jump in.
In Zhao’s view, JD.com should have followed a structured rollout strategy, rather than launching nationwide overnight. He outlined a more measured approach:
- Start in a single city to fine-tune operations before scaling.
- Select four to five experienced service providers and train them rigorously.
- Set clear operational targets—including store setup, menu uploads, delivery fees, and discount structures.
- Create a competitive system where service providers are incentivized to perform, with the top one or two managing city-wide operations.
“If you can build a few model stores, both merchants and consumers will quickly follow. City launches should follow a clear pace, ensuring the backend can handle everything smoothly,” Zhao said.
This top-down approach mirrors Meituan’s well-established playbook. But JD.com took a radically different path—going for an overnight, nationwide launch and enlisting service providers en masse.
The decision led to unintended chaos.
Zhao recalled a friend in the loan industry whose company had a street sales team. Seeing JD.com’s lucrative incentives, the firm immediately signed up as a service provider. But once approval was received, the company didn’t even understand JD.com’s policy documents.
Meanwhile, restaurant owner Zheng Guodong first heard about JD.com’s zero-commission offer from a real estate broker who helped him find shop spaces.
Soon after, he noticed something interesting: his restaurant staff and even delivery riders he frequently interacted with had picked up side gigs as JD.com sales reps.
A question began to form in Zhao’s mind. While it’s common for consumer-focused businesses to use aggressive signup bonuses to spur adoption, getting registrations is only the first step. Zhao wondered, who’s responsible for operations, like menu uploads and promotions?
In food delivery, service providers typically fall into two categories: basic onboarding teams whose job is just to get merchants registered on the platform, and full-service operators who handle everything from marketing to long-term strategy.
So far, Zhao has yet to see the second type enter JD.com’s ecosystem.
The result? JD.com’s wildly ambitious expansion strategy left behind a trail of newly onboarded, but utterly confused, merchants.
A backlash begins
For restaurant owner Zheng, it took just one day for JD.com to approve his store listing. But getting his menu online was another story.
JD.com required each restaurant to upload at least 15 dishes before releasing the sales rep’s commission. But the merchant dashboard was a mess—multiple overlapping categories, unclear labels, and no clear guidance on which to choose.
More problems surfaced as Zheng tried to upload menu items.
As a malatang vendor, he typically sold combo meals with varying ingredients. But JD.com’s system required every dish to include precise weight measurements:
“How am I supposed to weigh meatballs individually? We usually list them by quantity, not weight!”
“JD.com clearly built its backend using its grocery and fresh produce system. It’s not designed for restaurants at all,” Zheng complained in a social media post.
A JD.com employee later assured food delivery merchants that the system would be fully optimized within two to three months, promising it would eventually match Meituan and Ele.me’s platforms.
For now, however, merchants struggled to get things running smoothly.
This wasn’t just an operational issue. If JD.com couldn’t onboard merchants efficiently, it wouldn’t have enough variety to satisfy consumer demand. Without orders, delivery riders wouldn’t make enough money. And the initial enthusiasm would soon fade.
“The more excited people were at the start, the more disappointed they are now,” Zhao said.
Merchants who had once eagerly inquired about JD.com were now frustrated, frequently asking who’s responsible for fixing their store setup.
Still, there were signs of improvement. JD.com tightened service provider requirements, shifting from just approving store listings to evaluating operating hours, order volume, and menu pricing—in line with Meituan and Ele.me’s standards.
Zhao saw this as a positive shift, saying that “raising the bar for service providers is a necessary step.”
But compared to Meituan’s highly structured system, JD.com’s requirements were still relatively lenient.
By now, Wu’s sales team had completed their street-by-street merchant sweep. For them, the JD.com project was over, and that it became time to shift back to his core business of helping restaurants with marketing Alipay’s tap-and-go payment system.
JD.com’s open-door policy for service providers had led to chaotic early-stage growth. Now, it needed to rein in the disorder.
While rival food delivery platforms spar over issues like rider social security policies, for merchants, order volume remains the real priority.
For Xin Xin, the founder of a Shanghai-based coffee chain, the contrast is stark. He receives over 4,000 daily orders on Meituan. On JD.com, the figure barely reaches 40 orders.
A JD.com representative tried to reassure him:
“A national coffee chain has already seen its JD.com orders grow from under 100 per day to nearly 1,000.”
Xin quickly did the math.
“That’s still only about one order per store per day. Not a game changer,” Xin said.
JD.com’s food delivery service is still a fraction of Meituan’s scale, but as the newest challenger, it has clearly positioned Meituan as its main target.
Yet, something unusual stood out to merchants: Meituan hasn’t reacted to JD.com the way it did to Douyin.
When Douyin first launched its food delivery service, Zheng recalled that the moment he registered an account, Meituan’s sales team immediately reached out, offering him large subsidies to stay off Douyin’s platform.
But after signing up for JD.com’s service?
“Nothing from Meituan. No counteroffers, no phone calls,” Zheng told 36Kr.
Xin had a similar experience.
“When we listed on Douyin in 2023, Meituan called us immediately,” Xin said.
Why the difference?
For many merchants, Douyin is a natural sales channel, adding a 5–10% revenue boost due to its strong local lifestyle traffic. Douyin already has restaurant discovery content, group buying features, and user-generated reviews—all similar to Meituan’s Dianping. This makes Douyin a direct competitor with an organic traffic advantage.
JD.com, by contrast, has weaker organic ties to the restaurant industry.
Even Meituan insiders see JD.com’s challenge differently from Douyin’s threat. “At this stage, JD.com isn’t a concern. If anything, it first needs to compete with Ele.me,” a Meituan food delivery employee said.
A former Meituan executive who now works for JD.com’s JD Daojia service concurs:
“I still talk to my former Meituan colleagues, and not one of them has asked me about JD.com’s food delivery push. Interestingly, external industry players seem far more curious.”
Head-to-head, Douyin poses a greater threat because it offers something Meituan doesn’t have: organic content-driven traffic.
The battle with JD.com, however, will be a test of execution and commitment.
Meituan is a company that thrives on competition. When food delivery competition turned brutal seven to eight years ago, Meituan outmaneuvered rivals by aggressively poaching riders, running deep discounts, and pressuring merchants into exclusivity deals. And it won.
For JD.com, fighting from behind means higher costs.
So far, JD.com’s biggest play has been its zero-commission promise. But even that hasn’t fully materialized yet.
For Xin’s coffee chain, JD.com still charges a 6% commission, which is just 1% lower than Meituan’s rate.
His JD.com contact admitted that tea and beverage brands presently don’t qualify for the zero-commission offer, but added that major KA brands can apply for a 4% rate.
Another restaurant chain Xin knew was also not eligible to waive the commissions.
Meanwhile, Zheng pointed out that commission fees aren’t the biggest cost on Meituan—discounts and marketing expenses are. Discount coupons, first-time buyer deals, and delivery fee reductions all contribute to these two cost areas.
“These two factors are way bigger expenses than commission rates. JD.com will need to decide who covers these costs,” Zheng said.
Meituan’s quiet countermoves
Although Meituan hasn’t openly engaged in a pricing war with JD.com, it hasn’t been idle either.
One of its first responses was to push rider social security policies into the spotlight.
JD.com has repeatedly claimed to be the first platform to offer full benefits to riders, framing the move as an industry disruptor. Meituan hit back, insisting that JD.com was “jumping the gun.”
But industry insiders say the impact won’t be immediate.
According to Goldman Sachs, the first-year cost increase for Meituan due to rider social security is projected at RMB 0.1–0.2 (USD 0.014–0.028) per order, with total additional costs reaching RMB 2–3 billion (USD 280–420 million).
Given that Meituan’s profit per order (as of Q3 2024) was RMB 1.35 (USD 0.2), the financial impact remains manageable. Both Meituan and JD.com still primarily rely on gig workers, meaning structural change will take time.
Then, on February 27, Meituan quietly launched a new initiative, offering merchants hardware subsidies and extra traffic exposure.
A Meituan employee told 36Kr: “This program has existed internally for three years, but outside of Zhejiang, no one really pushed it. Now, it’s suddenly on the Meituan homepage.”
The timing was telling—it appeared to be a subtle response to JD.com’s quality-focused branding.
Meituan is also gently discouraging agencies from working with JD.com.
On February 22, a Meituan sales rep casually told Zhao not to “mess around with JD.com.”
But Zhao remains undecided: “I need to think carefully—should I go with JD.com or stick with Meituan?”
Industry veterans know that Meituan’s deep operational expertise makes it difficult to dislodge.
“Meituan’s backend has hundreds of promotional tools, on-the-ground sales reps constantly visiting stores, and advanced pricing algorithms. Even Ele.me still struggles to match them.” Xin said.
That said, Xin has assigned a dedicated employee to monitor JD.com’s food delivery progress.
“JD.com says it’ll ramp up consumer subsidies from March to May. We’ll wait and see,” Xin added.
For JD.com, staying in the game remains the top priority.
In a strong show of commitment, the company announced on January 25 its formal offer to acquire full control of Dada Nexus, reinforcing its long-term vision for food delivery.
With JD.com continuing its aggressive push, competition looks set to heat up from here.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.