E-commerce Delivery Fee War Leaves Small Merchants Struggling, Their Plight Dire

Jakarta, CNBC Indonesia – The delivery fee war in China’s food and instant retail sectors has indeed begun to subside after strict government intervention. However, behind the waning of massive discounts from technology giants such as Meituan, Alibaba and JD.com lies a dark legacy: heavy losses for small merchants and restaurants.

Previously, the brutal battle for market share forced digital platforms to spend billions of dollars on coupons, free delivery promotions and incentives to pamper consumers.

Whilst consumers in major cities have grown accustomed to the convenience of instant shopping, from food ingredients to cosmetics delivered within 60 minutes, small-scale business owners have instead borne the negative consequences.

“The battle indeed benefited consumers, but the damage to small restaurant operators remains,” said food industry analyst Zhu Danpeng, quoted by Reuters on Monday (7/9/2026).

Heavy Burden Amid Changing Shopping Behaviour

The impact of this price war is evident in the financial performance of several businesses that once partnered with the platforms. For example, the Luckin Coffee chain reported a 5.3% decline in same-store sales for self-operated outlets last quarter.

That performance contrasts sharply with a 13.8% surge in the same period a year earlier. The company said the decline was partly due to the high comparison base created by previous delivery app subsidies.

Meanwhile, the technology giants themselves suffered from this cash-burning strategy. Meituan fell into a loss-making abyss, Alibaba’s profitability slumped, and JD.com’s profits nearly evaporated—a phenomenon described by observers as “completely irrational and unsustainable”.

Now, as the major players shift their focus towards building long-term logistics infrastructure, such as rapid-delivery warehouses and supermarkets to lock in consumer loyalty, small merchants must still fight on their own against the onslaught of changing public shopping habits that have shifted entirely to instant retail.