The fierce competition in China’s food delivery market has moved from aggressive price cuts to alleged smear campaigns, with Meituan reportedly paying merchants for negative information about Alibaba’s Taobao Shangou, as regulators intensify efforts to curb unhealthy competition.
- Meituan paid merchants to expose Taobao Shangou’s pricing irregularities.
- Regulators penalized Alibaba for unfair low-price listings in March 2026.
- Police uncovered a coordinated online smear campaign against Alibaba and JD.com.
What happened
China’s top food delivery companies are escalating their turf wars beyond discount battles to involve paid smear tactics. An investigative report by Shanghai Securities News, a state-owned publication, revealed that Meituan paid multiple merchants to report alleged wrongdoing by Alibaba’s Taobao Shangou, particularly concerning unauthorized price reductions on menus. One example involved a dumpling restaurant receiving nearly $740 to disclose Taobao Shangou’s undercutting of its dish's price without permission.
These revelations come amid heightened regulatory campaigns initiated in October 2025 designed to suppress harmful price wars in the sector. Authorities penalized Alibaba for pricing a dumpling dish at a fraction of its usual cost, which gave Taobao Shangou an unfair advantage. Meanwhile, Meituan itself allegedly applied similar discounting tactics on merchants in its platform without their consent, paying at least eight merchants to support its efforts through so-called “merchant support funds.”
Why it matters
The accusations highlight growing tensions in China’s rapidly evolving food delivery market, where Meituan and Alibaba’s delivery arm Taobao Shangou fiercely compete for market dominance. Market projections indicate Meituan’s current 73% gross transaction value share could drop to 55% by 2027, while Alibaba’s share is expected to nearly double from 21% to 40%. This intensifying race appears to be pushing players toward ethically questionable tactics to protect or expand their market positions.
Regulatory bodies in China have increased scrutiny to prevent unhealthy pricing and competitive practices, as such battles threaten to destabilize the market landscape and hurt merchants and consumers. The recent uncovering of coordinated smear campaigns against Alibaba and JD.com further exemplifies the lengths some actors may go to undermine rivals, reinforcing the importance of official oversight in maintaining fair competition.
What to watch next
Observers should monitor responses from Meituan and Alibaba as regulatory investigations continue, including any potential penalties or policy actions aimed at curbing smear campaigns and unfair pricing strategies. How regulators address these intertwined issues will influence the competitive dynamics and future conduct of major food delivery platforms in China.
Additionally, the evolving market shares and promotional strategies employed by both Meituan and Alibaba will be key indicators of whether the sector can move away from destructive tactics toward healthier competition. Any further discovery of coordinated campaigns or merchant involvement in smear efforts may prompt broader crackdowns or require new regulatory frameworks to ensure a level playing field.