China's delivery wars heat up

[Anchor]

In China, as competition among delivery platforms intensifies, there have even been cases where delivery fees and food prices are free.

Both small business owners and delivery platforms are suffering from excessive cutthroat competition.

Beijing, Kim Min-jung reports.

[Report]

On one wall of a beverage store, order receipts are stuck closely together.

In another store, overflowing receipts have to be piled on the floor.

As the endless discount competition among delivery platforms has led to free delivery and free beverages, orders have surged.

[Beverage store part-time worker/Chinese SNS: "No, no, no more!"]

This year, the e-commerce company 'JD' has also entered the delivery market, leading companies to competitively distribute discount coupons to capture customers.

Consumer reactions are enthusiastic.

In the case of competitor 'Meituan', the number of delivery orders on the day of the discount event exceeded 150 million.

Despite the increase in orders, complaints are emerging among food business owners.

They have to share the costs of the delivery platform and discounts, and the surge in delivery orders has also increased labor costs.

With customers who pay the full price dropping off, overall profits have decreased.

[Business owner participating in discount event/Chinese SNS: "They say the delivery war will continue, but I really don't want to participate. However, if I don't participate, customers won't come to the store, and the losses will be greater."]

Delivery platforms are also reluctantly conducting discount events that eat into their own profits.

There are projections that platforms will incur losses exceeding 5 trillion won over the next year.

Both the industry and the Chinese authorities are urging an end to excessive competition, but the industry anticipates that cutthroat competition will continue at least until the second half of this year.

This is Kim Min-jung from KBS News in Beijing.