If the continuous internal strife does not stop, many merchants in food delivery or instant retail have no future, and it will also affect other areas of the overall economy. One example is the surplus of 16 million delivery riders after the food delivery war: the industry only needs 4 million riders, but 20 million people actually flooded in, with more than 5 riders competing for one order. Looking back, over the past year, internet giants have fought several rounds of the food delivery war. They thought that after dividing the world into three parts like in the Romance of the Three Kingdoms, it would eventually reunite. But everyone underestimated the pitfalls here. First, almost all food delivery platforms suffered huge losses, which we will detail later. But I think the more painful ones are the merchants, and the entire platform economy ecosystem, as well as the misleading infection of involution to many industries. Indeed, the involution in food delivery and instant retail may have become an infectious disease, affecting other industries such as automobiles, mobile phones, robotics, and retail. Because the food delivery industry has set an extremely unfriendly example. This vigorous war lasted a whole year, and there were no real winners. When the fireworks of burning money faded, everyone had to face the most simple and heart-wrenching question: After all this hype about the instant retail trend, who actually made money?
Food delivery is bleeding money; money is hard to earn, and food is hard to eat. A boss downstairs who runs a braised chicken rice restaurant, a few months ago at the end of 2025 when settling accounts, smoked one cigarette after another, filling the ashtray three times. He pressed the calculator all afternoon, then slammed the pen on the table and cursed: "After a year of work, revenue increased by 120,000 yuan, but I lost 10,000 yuan. I worked from dawn to dusk, all for the platforms and riders." Later, seeing many news reports about the food delivery war, I realized this was not just this boss's experience. In 2025, giants spent nearly 100 billion yuan on the food delivery and instant retail war, turning the entire industry upside down. The giants' financial reports showed revenue in the red, but behind it were shocking losses; and some merchants looked at the soaring order volumes but couldn't find real profits in their pockets. Looking back, the 2025 food delivery battlefield was a modern melee. Some were like Cao Wei occupying the Central Plains, strong and mighty; others were originally weaker, like Sun Wu in Jiangnan, relying on a big tree, with money and food, rising rapidly; and some became the suddenly emerging Shu Han, with the top leader personally leading the army to charge. Each was determined to kill the other and unify the world. After a year of fighting, no one killed anyone, but some lost everything.
Where did the money go? Much was spent on subsidies. Because of this, Alibaba's performance in this sector was not good either. External reports say that in fiscal year 2026, Alibaba's China e-commerce group's adjusted EBITA was 107.509 billion yuan, down 44% year-on-year. In Q1, Alibaba's China e-commerce business adjusted EBITA fell 40% year-on-year, with a loss of over 20 billion yuan. JD.com is also fighting a protracted war. When JD.com first started food delivery, it was extremely ambitious, as if the world was within reach. As a result, after the new business lost money last year, in this quarter, JD.com's revenue was 315.7 billion yuan (RMB, same below), up 4.9% year-on-year; net profit attributable to shareholders was 5.1 billion yuan, down 53.17% from 10.9 billion yuan in the same period last year. JD.com's new business (including JD Food Delivery, JD Property, Jingxi, and overseas business) revenue was 6.279 billion yuan, up 9.1% year-on-year. Operating loss expanded sharply from 1.3 billion yuan in the same period last year to 10.3 billion yuan, with an operating loss rate as high as 164.9%. This growth was mainly driven by the initial investment in JD Food Delivery. What does that mean? It's like throwing money away on food delivery. Looking back, the industry is far from the original slogan of "one of the three parts of the world." Sometimes, when a user orders a 10-yuan milk tea, the platform can subsidize 5 yuan; when a merchant receives a 20-yuan food delivery order, the platform can return 3 yuan. But even with such a big investment, if the platform subsidies stop, those users who used to collect red envelopes on time every day will switch to other platforms. Isn't that infuriating? In short, these users are not real users of the platforms; they are users of red envelopes. When the red envelopes disappear, they will disappear too. This is like the warlord melee in ancient times: you seize my city, I take your fortress, fighting back and forth, and in the end, someone suffers, and you also exhaust yourself. In the final analysis, the food delivery business has no moat. If you can subsidize 5 yuan, I can subsidize 6; if you can increase delivery fees for riders by 1 yuan, I can increase by 2. In the end, it's not about who is smarter or who has better technology, but who can burn more money. But money always runs out. When the giants' cash reserves dwindle and investors' patience wears thin, this meaningless war of attrition is destined to end.
Hundreds of Billions in Operations, Fierce as Tigers The Instant Retail Wind Didn't Blow for Everyone While the giants were fighting fiercely above, the merchants and practitioners below were having a hard time. Everyone says instant retail is a trillion-yuan track, the next wealth-creation myth, and the last chance for ordinary people to turn their lives around. But those truly standing at the forefront of the trend, few flew up; instead, most fell flat on their faces, even breaking their bones. There is a truth circulating in the industry scarier than a ghost story: out of 10 people doing instant retail, 1 makes big money, 3 barely make a living, and the remaining 6 are all working for the platforms. Those who make money are basically chain giants like Luckin Coffee and Mixue Ice City. They have a high degree of standardization, mature supply chains, and can squeeze costs to the extreme. For example, for chain coffee brands, the raw material cost of a cup of coffee is less than 5 yuan, and they sell it for 20 yuan. Even if the platform takes 5 yuan, there is still a 10 yuan profit. Coupled with economies of scale, they naturally make money. But small and medium-sized merchants are not so lucky. A research report by Professor Zhang Jun's research group at Fudan University, based on transaction data from more than 40,000 catering merchants, shows that after July 5, 2025, as food delivery subsidies increased, merchants' daily total orders (delivery plus dine-in) increased by an average of 7%, but daily actual revenue decreased by an average of about 4%, and merchants' total profit (delivery plus dine-in) decreased by an average of 8.9%. A survey by Lixin Consulting of more than 2,000 catering merchants painted an even crueler picture: nearly 70% of merchants saw a decline in revenue, 80% saw a decline in net profit, and more than one-third saw net profit decline by more than 30%. In other words, most merchants not only don't make money from food delivery but also lose money. So much so that some bosses might say with a bitter smile: previously they thought food delivery was a lifeline, but now they realize it's a noose. If your order volume is low, the platform won't give you traffic, and you slowly die; if your order volume is high, the platform's commissions and fines increase, and the more you do, the more you lose. Either way, it's a dead end. Catering merchants are suffering, and bosses of online supermarkets, front warehouses, and new retail formats are not having an easy time either. First, the ideal is beautiful: there are predictions that in 2026, China's instant retail scale will exceed 1 trillion yuan, and by 2030, it will reach 2 trillion yuan, with an average annual growth rate of 12.6% during the "15th Five-Year Plan" period. So can everyone get a piece of the pie? Think again. Jiu Bianli is a typical example. In 2025, its revenue reached 1 billion yuan, which seems large, but it decreased by 39.71% year-on-year; and its gross margin was only 9.31%, compared to 14.15% in the same period last year. Finally, net profit was still negative, with a net loss of 161 million yuan. Inventory pressure, rising rents, and high labor costs—these three mountains weigh down, and even immortals can't bear it. Many bosses opened front warehouses thinking they could catch the trend and make big money, but they closed within three months, not even earning back the renovation costs. What's even funnier is that the hyped AI empowerment didn't help merchants make much money either. Everyone is boasting about how powerful their AI is: it can help merchants reduce inventory in restocking, AI scheduling systems shorten delivery times, and AI customer service saves labor. But the benefits of these efficiency improvements have basically been taken by the platforms themselves. Merchants found that AI did reduce the platform's operating costs, but their commissions didn't decrease at all. Instead, due to the precise squeezing of AI algorithms, life became even harder. In short, AI is not here to help merchants and riders make money; it's here to help platforms make money more efficiently. It calculates every link to the extreme, squeezes out every possible penny, and leaves merchants and riders with only thinner profits and greater pressure. In fact, the essence of instant retail is retail, not the internet. What is the core of retail? In my opinion, it's supply chain, efficiency, squeezing costs penny by penny, and serving customers down-to-earth. But some people insist on treating it as an internet traffic business, thinking they can smash out a trillion-yuan market by burning money. What's the result? Burning money created false prosperity but didn't create sustainable profitability. Just like the shared bikes of that era: hundreds of billions were thrown in, and in the end, only a pile of scrap metal remained. When subsidies fade, users will return to the most cost-effective places, and merchants will return to platforms where they can make money. The scale bought by burning money is ultimately a castle in the air, collapsing at the slightest wind.
The World Has Long Suffered from Traffic Wars Profitability Is the Only Way Home for Instant Retail and New Consumption At the beginning of 2026, the entire industry suddenly became quiet. Compared to last year, there are fewer overwhelming subsidy advertisements and fewer bold declarations from giants. Some giants have announced stopping large-scale subsidies, and everyone realizes that the money-burning game can't continue. If they keep burning, not to mention unifying the world, they will go bankrupt first. Profitability has become everyone's only goal. Why is it so hard to make money in instant retail? Because it has an unavoidable Achilles' heel: fulfillment costs. The average fulfillment cost per food delivery order is 6-8 yuan, accounting for more than 15% of the average order value. No matter what you sell, as long as you need riders to deliver, this cost cannot be avoided. And most instant retail orders have an average order value below 30 yuan. After deducting fulfillment costs, product costs, and platform fees, merchants should be grateful if they don't lose money. To be profitable, there are only two ways: either increase the average order value and gross margin, or reduce fulfillment costs. For merchants, it's time to wake up. Instant retail is not a lifeline; it's just an ordinary sales channel. Don't expect to get rich from platform subsidies, and don't blindly follow the trend to open front warehouses or do full-category delivery. Those who truly make money are the merchants who do their products and services well. In my opinion, there has never been an eternal trend in this world, only eternal business. The bubbles blown by burning money will eventually burst. In the thousand-group buying war back then, hundreds of companies fought fiercely, and only one remained; in the shared bike era, billions of funds were thrown in, and in the end, only a pile of scrap metal remained. So history tells us time and again that markets grabbed by burning money cannot be held. Only businesses that can sustain profitability can last long. Instant retail is not a disruptive innovation; it's just an extension and supplement of traditional retail. It allows us to buy things more conveniently and improves industry efficiency, but it cannot change the essence of business. The essence of business is to create value and then obtain reasonable profits. When the smoke of the food delivery war dissipates and the bubble of instant retail bursts, what remains will be those who do business down-to-earth. Instead of continuing to burn money to grab market share, giants should calm down, optimize supply chains, improve service quality, and work with merchants for win-win outcomes. Instead of following the giants in involution, merchants should do their own products well and serve their customers well. After all, a business that can make money is a good business. And those players who only know how to burn money but not how to make money will eventually be eliminated by history.