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Chongqing coffee industry leaders urge JD.com to end subsidy-driven price war
On June 5, the Chongqing Coffee Industry Association urged JD.com to stop its subsidy-driven price war, criticizing heavy discounts on coffee that hurt local businesses. They reported a 12% drop in online sales among independent cafes and warned that continued price competition could lead to closures and job losses. The association called for transparency in subsidies and a sustainable approach to delivery.
Key points
- On June 5, the Chongqing Coffee Industry Association issued a joint statement with local coffee brands.
- The group criticized JD.com’s Billion-Yuan Subsidy campaign for leading to steep discounts on coffee.
- Large chains like Luckin and Cotti are benefitting from subsidies, pricing their products unsustainably low.
- Independent cafés in Chongqing experienced a 12% drop in online sales and a 13% decrease in average order price.
- The association warned of potential store closures and job losses if the price war continues.
- They called for JD.com to be transparent about subsidy mechanisms and to support sustainable delivery practices.
Why it matters
- The current trend of aggressive discounting in the food delivery sector mirrors the broader price competition seen across various industries driven by major e-commerce platforms.
- Concerns over the sustainability of local businesses amidst large-scale subsidies reflect ongoing discussions about the impact of tech giants and monopolistic practices on small enterprises.
- The situation highlights a potential trend as consumers demand more from delivery services while local businesses struggle to compete, aligning with sustainability trends anticipated in the 2025 IT landscape.
The urgent call from the Chongqing Coffee Industry Association underscores the pressing need for a balance between market competition and local business sustainability, as aggressive pricing strategies threaten the viability of smaller entities.