Alibaba and Meituan have intensified their competition in China’s food delivery market with large-scale free drink promotions in August 2025.

Alibaba, operating Ele.me and Taobao Instant Commerce, offered 1 million free milk teas daily from August 7 to August 10.

Meituan matched this with a similar offer over seven days, both using the popular meme “the first cup of milk tea in autumn” to promote their campaigns.

JD.com, which entered the on-demand delivery sector in February 2025, joined the ad push with discounts on fried chicken and drinks.

These aggressive promotions led to a surge in orders and prompted China’s State Administration for Market Regulation to urge “rational” competition in July.

Although all three firms pledged to scale back direct subsidies in August, ad activities remain active.

According to company data, Meituan leads in order volume and delivery crew size, followed by Alibaba and JD.com. Analysts expect competitive intensity to peak in the third quarter of 2025.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Price wars in China’s delivery market carry massive financial stakes

While the “free drinks war” between Alibaba and Meituan might seem like simple promotional tactics, the financial scale behind these campaigns is significant.

Recent analysis shows that China’s food delivery giants spent approximately $4 billion on discounts in a single quarter during their competitive battle 1.

The market impact has been notable—Alibaba alone lost $100 billion in market value due to the prolonged food delivery price war 1.

This context helps explain why even “limited” promotions like 1 million free milk teas per day represent substantial investments, especially when China’s food delivery market serves 355 million users and generates over $37 billion in annual value 2.

The companies aren’t just competing for customer loyalty. They’re making billion-dollar bets on market dominance in a sector expected to reach 1 trillion yuan in revenues this year.

2️⃣ Regulatory intervention follows a predictable cycle in Chinese tech competition

Recent Alibaba developments