JD Food Delivery is just three steps away from the battlefield | Deep Dive Lite
Text | Ren Cairu
Editor | Qiao Qian Yang Xuan
Fang Li has received three Internet companies that are ambitiously trying to develop local life services.
The first one is Douyin. In 2021, Fang Li joined a fast - food brand with thousands of stores, responsible for online business mainly dealing with Meituan. That year, Douyin entered the local life services market, and he soon received an invitation to join the whitelist. With a large user base and strong determination, Fang Li's team conducted three rounds of tests with Douyin.
The second one is Xiaohongshu. In the first half of 2024, Xiaohongshu conducted an internal test of its group - buying business, but its determination and basic capabilities made Fang Li skeptical. This time, he declined the offer.
This time, it's JD.com. It wants to tackle the most difficult part of local life services - food delivery.
In November 2024, Fang Li received an invitation from an executive of JD Instant Delivery. During the meeting, the other party clearly expressed three points - local life services have been placed at a strategic level within the company, the early - stage charging policies are extremely favorable, and the "food" sector will be the key area of investment. To show their emphasis, the other party specifically mentioned, "Mr. Dong (Jingdong founder) personally assigned this business to connect with you and make your brand a model for JD's 'food' sector."
Like all platform - based businesses, merchants and users are the two ends of the food - delivery business. The difference is that food delivery requires much higher fulfillment capabilities than e - commerce, group - buying, etc. A large - scale local delivery network is both the infrastructure and the moat.
In the Chinese Internet industry, there are only a few companies with such a "network". JD.com, which owns Dada Group, is one of them. As of 2023, Dada Group had 1.2 million active riders. Although it still lags behind Meituan's 7.45 million riders during the same period, it is still large enough to support a certain market share.
More importantly, just delivering general goods is not enough. Only the "high - frequency and essential" service of food delivery can truly make full use of this network and achieve large - scale profitability.
After understanding JD's intention, Fang Li decided to "give it a try". He used the stores in Beijing as samples. In the early stage, the average daily order volume per store was about a dozen, but due to the unstable overall traffic, the daily order volume of some stores once dropped to zero.
On February 11th, a notice titled "JD Food Delivery! Zero Commission!" suddenly appeared. JD Food Delivery shifted from a low - key state to a high - profile one, and Fang Li saw "a large number of orders pouring in all at once".
One week later, JD officially announced that it would pay the five social insurances and housing provident fund for food - delivery riders. Merchant commissions and riders' social insurance and housing provident fund are two issues that can easily arouse public emotions in the food - delivery industry. The message JD wants to convey is simple: "To be the changer."
No one wants to see a monopoly, so merchants are equally enthusiastic about new entrants.
"You can't imagine how much merchants value it." Zhao Ming is the person - in - charge of a Meituan Food Delivery agency. Just one week ago, a salesperson in his company contacted more than 20 catering merchants, hoping to become their agents on the Meituan platform, but often received no responses to the messages sent.
On the day when JD made its high - profile official announcement, the salesperson simply sent a group message: "JD is doing food delivery. If you meet the requirements, you can take a look." Ninety percent of the customers immediately asked: "How can I join?" "Can you come to the store to help with the setup?" He spent the whole afternoon replying to these messages.
However, food delivery is a business with high entry barriers, strict requirements for delivery capabilities, and requires long - term investment and tolerance for losses. The solid flywheel formed by Meituan over the years is like a huge network that encompasses merchants, consumers, and riders. It's not easy to find a breakthrough.
In the past 20 days, merchants and service providers in the JD Food Delivery ecosystem have experienced excitement, waiting - and - seeing, confusion, and some disappointment. After all, choosing to restart an old - fashioned Internet service in 2025 is a difficult start.
"Get the merchants on board first"
"Get the merchants on board first."
This was the most crucial signal that Si Yuan, an employee, received at the all - staff meeting of JD Food Delivery on February 14th.
It was a "morale - boosting" meeting. Lao K, the chairman of Dada Group, mobilized everyone present to "work hard" and actively "expand the supply" for food delivery. Although no more specific battle plans were announced, the orientation was clear and the goal was focused.
Overnight, internal employees, service providers, and part - time salespeople were active everywhere on social platforms. "The whole circle is very enthusiastic. People think this business is just like when Meituan and Ele.me first launched in a new city, and they are eager to make money at this emerging opportunity." After paying a 100,000 - yuan deposit, Wu Hai's company obtained the qualification of a JD Food Delivery service provider on February 14th.
JD offers an incentive of 200 yuan per store to service providers. Their job is to get eligible merchants to agree to join JD. Within a week, Wu Hai recruited about 400 part - time salespeople for the Sichuan team. They went from street to street. "All the merchants we contacted were interested, unless they didn't do food delivery at all."
"Now, service providers are running around everywhere. The catering team, supermarket team, etc. within the company are also all involved." Si Yuan said.
On February 20th, Si Yuan visited a CKA merchant in a provincial capital city. As soon as he mentioned the "zero - commission" offer, the merchant looked up and asked: "A service provider offered to give me 150 yuan back for each store if I join. How much can you offer?" Only then did he know that the merchant had been contacted by dozens of service providers and had also been invited by the JD Instant Delivery supermarket team.
Amid the hustle and bustle, there are also onlookers outside the game who are full of confusion about JD's approach.
Although Zhao Ming, the agent, felt the merchants' enthusiasm for JD Food Delivery at the first time, he didn't immediately get involved because "the profit model is not clear enough".
In his imagination, if JD wants to do the food - delivery business, it should follow a normal route: When launching in City A, first select 4 - 5 experienced service providers, conduct pre - training, and clarify detailed task goals - including store setup, menu upload, delivery - fee and discount settings, etc. Each service provider is responsible for a specific area and competes with each other. Finally, 1 - 2 service providers that perform well will be responsible for the promotion and refined operation of all merchants in the city. Service providers can make continuous profits by taking a percentage from the operation, rather than simply earning a "one - time" promotion fee.
In this process, it would be even better if several benchmark stores could be established. The butterfly effect on both the merchant side and the user side would appear quickly. And the city - launching should also be carried out in a planned way, with important cities being tested first. "There should be a stage for merchants and the platform to grow together, at least to ensure that everything in the background can run smoothly."
Zhao Ming's experience is also the common logic of Meituan Food Delivery, which is very "top - down", while JD obviously didn't follow this path. It suddenly made an official announcement, recruited service providers nationwide, and spread the business overnight.
Zhao Ming has a friend who is in the "loan business". Since his company has a sales team for street - to - street promotion, he also applied for the JD Food Delivery service - provider qualification at the first time. "But after getting the qualification, they couldn't even understand some of the policy requirements issued by JD."
Zheng Guodong runs a spicy - hot - pot brand with 4 stores in Beijing. The invitation for zero - commission entry to JD Food Delivery was sent by a store intermediary he knew before. Now, several clerks in Zheng Guodong's stores and many food - delivery riders he usually meets are also working part - time as JD Food Delivery salespeople.
A question emerged in Zhao Ming's mind. For a new platform and new business to attract new users, the "referral" method of street - to - street promotion can be used. But for the expansion of food - delivery merchants, store registration is just the first step. "Who will be responsible for the subsequent services such as menu upload and event setup?"
There are two types of service providers in the food - delivery industry. One type only focuses on street - to - street promotion and considers their job done once they sign up restaurants. The other type not only does promotion but also the subsequent merchant operation and doesn't rely on one - time deals. Around Zhao Ming, professional service providers of the latter type have not entered the market yet.
Driven by the simple goal of "expanding the supply", the rather unruly street - promotion companies have swept through the market, leaving behind a large number of confused merchants after joining, just like a whirlwind passing by.
The "boomerang" that comes soon
After a smooth one - day review, Zheng Guodong's spicy - hot - pot brand encountered some problems when being listed on the platform.
Merchants must list 15 dishes for the corresponding salesperson to be considered successful in promotion. However, the merchant background of JD Food Delivery is very confusing. There are options like "Food Delivery (Old)", "Food (Old)", "Food Delivery & Food (Old)", "Food Delivery & Food", etc. "There are so many versions that I don't know which one to click."
More specific and non - standard small problems also emerged during the menu upload. As a spicy - hot - pot merchant, Zheng Guodong mainly lists set meals, which contain different types of dishes. But in the menu design of JD Food Delivery, it requires filling in the net weight of each dish. "This is one of the required fields, but for meatballs, we used to just fill in the quantity. How can we calculate the weight?"
"JD's product design obviously follows the original design concept for fresh food and vegetable sales, not the logic of the catering industry." Zheng Guodong helplessly posted a WeChat Moment, "I'm worried about the product R & D of JD Food Delivery. The business is rushed to launch, but the product is not ready yet."
All the "hiccups" in the background system can be explained by "it's still in the early stage of the business". Just as an employee of JD Food Delivery promised Xin Xin, "The internal goal is to be able to match the background of Meituan and Ele.me within 2 - 3 months."
Xin Xin is the founder of a chain coffee brand in Shanghai. As early as early January this year, the above - mentioned JD employee sent him a list of materials required for joining and asked, "Anyway, one more order is one more, do you want to go live?" But it wasn't until JD made its official announcement in February that Xin Xin chose to join, "It's more to show the franchisees that the company is aware of and actively responding to the new market trends."
Initially, Xin Xin didn't actively cooperate. One important reason was the cumbersome process of integrating with the mini - program. Their ordering system is already quite mature and can handle coupon verification on Meituan and Douyin, as well as ordering on Meituan Food Delivery and Ele.me. However, it has always been difficult to connect to JD's port.
The city - launching rhythm and merchant operation are aspects that can be improved. However, if the early - stage preparation and execution are not solid enough, the subsequent impact may be comprehensive - it will be difficult for merchants to gather quickly, users' diverse needs will be difficult to meet, the order volume of merchants will become dull, the income of riders will not be attractive, and the high - spirited market sentiment will soon fade.
"The higher the initial hope, the greater the current disappointment." Zhao Ming, the service provider who is still waiting and seeing, sighed. Those customers who were initially enthusiastic are now mostly complaining to him, "There is no one to contact for store setup and follow - up services."
A good sign is that JD is raising the settlement conditions for service providers - from the initial requirement of passing the review and listing at least 5 products, now it also requires the daily business hours, effective business days, and effective order volume of the merchants they recruit. Moreover, the number of products and the original price of products are also starting to be "aligned" with Meituan and Ele.me.
Zhao Ming seems to see some hope. "This must be a good thing. It's inevitable to raise requirements for service providers."
However, compared with Meituan Food Delivery, which he has been dealing with for a long time, "JD's assessment requirements are actually not very high." Ignoring merchant classification and various annual campaigns, Meituan Food Delivery also has extremely strict basic assessments for its business development (BD) staff. The indicators include the number of listed products, overall business hours, merchant subsidy intensity, delivery - fee reduction, and special coupons. In addition, Meituan has the same assessment goals for its direct - sales BD staff and agents - Zhao Ming emphasized its "top - down" characteristic again.
In the past 20 days, Wu Hai's service - provider team has completed the "street - sweeping" in their area. "This project is basically over." He plans to shift his focus to the company's main business, which is the promotion of catering merchants for Alipay's "Tap - to - Pay" service.
During the street - to - street promotion of JD Food Delivery, Wu Hai advanced the payment for nearly 400 temporary salespeople. Now that the official settlement conditions have become stricter, he can only rely on a small number of full - time team members under him to try their best to follow up on merchant services in order to get paid.
However, the "loose entry and strict exit" policy for service providers also indicates that the situation is starting to move from chaos to order.
The unmet opponents
In the past period, several food - delivery platforms have been engaging in a virtual battle around the issue of riders' social insurance, but merchants have always focused on the more practical order volume.
Now, the daily total order volume of Xin Xin's coffee brand on Meituan exceeds 4,000, while the order volume on JD Food Delivery is basically stable at around 40. The JD employee in contact with him hopes to give him some confidence by citing the growth of a peer: "A coffee brand with thousands of stores has increased its average daily order volume from less than 100 before the Spring Festival to nearly 1,000 currently."
Xin Xin simply calculated, "That's only about 1 order per store per day." This is not much different from the current order volume of his own brand.
Obviously, JD Food Delivery and Meituan Food Delivery are not in the same league yet. However, since the former entered the market with a high profile, the latter has naturally become the "target" in various senses.
"Meituan doesn't guard against JD as it did against Douyin." This is the common feeling among merchants.
When Douyin first entered the food - delivery market, as soon as Zheng Guodong registered his account, he received a message from a Meituan offline manager, who said, "As long as you don't join Douyin, I'll give you a large - amount subsidy." During the week when he decided to join JD, "Meituan hasn't taken any similar actions yet."
Xin Xin has the same feeling. "When we launched on Douyin Food Delivery in 2023, we would receive a call from Meituan as soon as we went live."
"At that time, many of us merchants thought that Douyin would at least become a new channel with a 5% - 10% market share." In Xin Xin's view, Douyin has sufficient penetration into offline life, and scenarios such as "influencer restaurant reviews" and "in - store group - buying" in the catering industry have been well - established. "Douyin also has the content gene of Dianping. In comparison, the (traffic) connection between JD's existing business and food delivery is relatively weak."
The expectations of all parties are similar.
"For now, it's okay. We'll observe JD Food Delivery, but it doesn't pose a problem for the time being." A Meituan Food Delivery employee told 36Kr bluntly, "The barriers and scale of the food - delivery industry are obvious. JD may have to outperform Ele.me first."
A JD Instant Delivery employee with a Meituan background also agrees with this judgment. In the past, he got to know many peers through work. After JD entered the food - delivery market with a high profile, none of his Meituan friends asked him about it, while external partners showed more interest.
In the same business, Douyin