China fines Alibaba, PDD for food delivery business failures
The country’s hyper-competitive instant delivery market engaged in a price war in the past year as platforms tried to defend their market share
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[HONG KONG] Chinese regulators fined leading food delivery platforms, including Alibaba Group Holding, PDD Holdings and Meituan, for failing to filter out unqualified merchants.
The State Administration for Market Regulation took a total of 3.6 billion yuan (S$672 million) from several platforms, which also included JD.com and ByteDance’s Douyin, via fines and confiscation of income generated through improper use, according to a statement from the market watchdog on Friday (Apr 17). The penalty was the largest ever for delivery platforms since China’s food safety law was amended in 2015, according to the official Xinhua news agency.
The watchdog’s decision followed a series of investigations by local governments into “ghost deliveries”, in which merchants registered with delivery platforms using fake locations and falsified government-issued licenses. In some instances, merchants outsourced orders to others without informing customers.
SAMR said that it found that the penalised platforms did not have a rigorous review process for merchants as required by law, but the platforms had all removed unlicensed shops after the probe started. SAMR also separately fined legal representatives and executives in charge of food security for these platforms a total of 19.7 million yuan.
PDD repeatedly declined to provide related materials as required, and resorted to violence to obstruct regulatory enforcement, the market regulator said in a separate statement. At least two fistfights broke out in late 2025 between PDD employees and regulators performing checks related to fraudulent deliveries at the e-commerce company’s Shanghai premises, Bloomberg News reported.
PDD said that it has accepted and will comply with administrative penalties imposed by China’s market regulator over so-called “ghost takeaway” practices, pledging to tighten oversight, standardise operations and strengthen its social responsibility commitments, according to a post on the company’s official Weibo account.
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Meituan pledged to strengthen compliance and crack down on illegal practices to safeguard food delivery safety, according to a statement in response to the penalty. The firm also announced measures to upgrade its delivery governance system.
Douyin vows to strictly comply with regulatory requirements, strengthen compliance governance, and work with merchants to improve service quality, according to a company statement. Alibaba’s Taobao Flash Sales said in a texted statement that it will fully comply with regulatory penalties, conduct comprehensive inspections, strengthen ongoing platform compliance and crack down on illicit practices to ensure food safety.
China’s hyper-competitive instant delivery market engaged in a price war in the past year as platforms tried to defend their market share. Authorities have stepped up scrutiny of the sector, repeatedly warning the most aggressive contenders to ensure the interests of merchants and consumers. BLOOMBERG
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