Chongqing Coffee Industry Urges JD.com to Halt Subsidy-Driven Price War
On June 5, the Chongqing Coffee Industry Association, alongside several local independent coffee brands, issued a joint statement urging JD.com’s food delivery platform to cease its aggressive Billion-Yuan Subsidy campaign. The coalition criticized the e-commerce giant for offering steep discounts on freshly brewed coffee, arguing that this strategy has triggered a rapid market-wide price collapse and jeopardized the long-term sustainability of the local coffee sector. The statement highlighted that large chains, such as Luckin Coffee and Cotti Coffee, disproportionately benefit from these subsidies, allowing them to sell drinks below cost, with prices dropping as low as RMB 1.68 per cup. This practice reportedly squeezed out smaller local competitors, leading to a 12% decline in online sales and a 13% drop in average order values for independent cafés in Chongqing during May. The association warned that continued price wars could accelerate store closures and result in significant job losses. Consequently, they called on JD.com to disclose its subsidy mechanisms and redirect resources toward fostering a sustainable delivery ecosystem. Although the open letter was subsequently removed, the incident underscores growing tensions between digital platforms and traditional retail sectors regarding fair competition practices.
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Chongqing Coffee Industry Urges JD.com to Halt Subsidy-Driven Price War
On June 5, the Chongqing Coffee Industry Association, alongside several local independent coffee brands, issued a joint statement urging JD.com’s food delivery platform to cease its aggressive Billion-Yuan Subsidy campaign. The coalition criticized the e-commerce giant for offering steep discounts on freshly brewed coffee, arguing that this strategy has triggered a rapid market-wide price collapse and jeopardized the long-term sustainability of the local coffee sector. The statement highlighted that large chains, such as Luckin Coffee and Cotti Coffee, disproportionately benefit from these subsidies, allowing them to sell drinks below cost, with prices dropping as low as RMB 1.68 per cup. This practice reportedly squeezed out smaller local competitors, leading to a 12% decline in online sales and a 13% drop in average order values for independent cafés in Chongqing during May. The association warned that continued price wars could accelerate store closures and result in significant job losses. Consequently, they called on JD.com to disclose its subsidy mechanisms and redirect resources toward fostering a sustainable delivery ecosystem. Although the open letter was subsequently removed, the incident underscores growing tensions between digital platforms and traditional retail sectors regarding fair competition practices.
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