Why does the market still need a JD Takeaway?

In February 2025, JD.com officially increased its investment in food delivery business, with "quality food delivery" as its core positioning, and launched a year-round 0 commission policy to recruit quality dine-in restaurant merchants. This move marks JD.com's new layout in the food delivery field, and has also attracted widespread attention from the market to changes in the food delivery industry.

This article will conduct an in-depth analysis of JD Takeout’s core differentiated advantages, its basic capabilities and potential challenges in entering the food delivery market, and the new changes it may bring to the food delivery market.

On February 11, JD.com took another step to boost its food delivery business, recruiting quality dine-in restaurant merchants with a year-round 0 commission attitude.

JD.com said that this is to better meet consumers' pursuit of food safety and quality takeout, and will work with merchants to promote the healthy and sustainable development of the takeout industry.

As soon as this move was made, people close to JD told "Narrow Broadcast", JD Takeout instantly received responses from a large number of merchants, including leading merchants with more than 1,000 stores.

JD’s journey into food delivery has gone through a process of gradually expanding its layout and clarifying its business positioning.

In May 2024, JD.com integrated JD.com 24-hour delivery and JD.com home delivery and launched "JD.com Seconds Delivery". The "Coffee and Milk Tea" section was launched, supporting delivery services from merchants such as Shanghai Auntie and Luckin Coffee; in September, the importance of JD.com Seconds Delivery on the APP homepage increased again, and some fast food merchants such as Burger King and Yonghe King also appeared on JD.com Seconds Delivery; at the end of the year, the "Takeaway Channel" in JD.com Seconds Delivery was officially launched.

To date, JD Takeout has been soliciting investments from a wide range of catering categories and has clearly defined its core positioning as quality takeout. This also marks that JD's attempts and explorations in the takeout business have entered a new stage, and it is not impossible for it to make large-scale investments in the future.

The food delivery market has maintained a stable market structure for quite a long time. However, merchants' demand for more channel opportunities and opportunities to reach more consumers, and consumers' demand for more choices and more precise services, always exist.

As JD.com has deepened its operating genes in the tough retail business and expanded its various delivery and operating capabilities, it is no longer surprising that it has extended its business layout to the entire food delivery category.

However, facing a stable market structure, how to improve its own penetration rate, achieve differentiated development, and achieve sustained growth and profitability of its own business while meeting the needs of merchants and consumers still needs time and market testing. However, it is also destined to bring new changes to the food delivery market.

01 The core difference is quality takeout

The core differentiation of JD.com's re-launch of food delivery is that it attracts merchants with high-quality dine-in services and provides food delivery services that pay more attention to product quality.

It should be pointed out that quality takeout does not mean high-priced takeout. Quality mainly refers to the requirements for the product quality and service capabilities of the merchants. At present, "quality dine-in" is mainly used as the supply screening threshold, without any requirements on the average customer price, category, etc. Therefore, it is still aimed at all people, all categories, and all price ranges.

Now when you open the "Second Delivery" - "Takeaway" page of JD APP, you can see that in addition to the existing coffee, milk tea, hamburger and fast food brands, there are also full-course meal brands such as Mr. Rice, Yuanji Dumplings, Haidilao, Zuotingyouyuan, etc. Almost every one of them has a coupon for 5 yuan off for every 6 yuan spent. However, because it is still in the early stage, the overall supply is still relatively small.

Haidilao and other catering brands have appeared on JD Takeaway

JD.com's quality food delivery service, to a certain extent, meets the needs of some merchants and consumers in the food delivery market.

From the perspective of merchants, the entire catering market is in a stage where the level of homogeneity is rising, the era of relying on single hot-selling products to conquer the world is over, and natural traffic is being intercepted and reduced by multiple scenarios. Therefore, providing multi-category, all-time, and multi-scenario products and services has become the mainstream choice for many catering brands.

One manifestation of this is that some formal dining brands are embracing takeout with a more open mind.

For example, Xibei, a leading Chinese casual dining brand, has launched a variety of options on its takeaway platform, including one-person meal, multi-person meal, children's meal, afternoon tea meal, etc. According to its 2023 takeaway business revenue data, the annual takeaway revenue exceeded 2 billion yuan, and the order volume increased by more than 35% year-on-year. Local cuisine brands such as Chef Fei and Lan Xiangzi have also achieved good results in the takeaway field.

For such merchants, JD.com’s quality food delivery may be a new channel that can be developed and a potentially better business environment.

Consumers have always needed safe and healthy takeout products. Many consumers have the habit of looking at the store before ordering takeout, and some even only order takeout from stores they have eaten in.

02 Why JD.com can do food delivery

Takeout is undoubtedly a huge but complex market.

According to data from the China Internet Network Information Center and the China Hotel Association, as of 2023, the scale of my country's catering takeaway market will be approximately 1.2 trillion yuan, accounting for more than 22% of total catering revenue; as of 2024, the scale of my country's online takeaway users will reach 545 million, accounting for about half of the total Internet users.

From the first takeout transaction in 2008 to the sale of Baidu Takeout and Ele.me in 2018, the takeout industry as a whole has shifted from "dividend-driven" to "efficiency-driven". To today, the takeout market has actually maintained a stable pattern of 70%-30% between Meituan and Ele.me for quite a long time.

Douyin's concentrated attempt to develop the food delivery business since 2022 has also made some splashes in the market, but its exploration has never made any major breakthroughs in categories, scale, and penetration. Its business attribution has also been repeatedly divided between Douyin's e-commerce and life services organizations, and its influence is limited.

The core factor that makes takeout difficult is that it is a typical platform-based business with a regional grid, high investment, low customer orders, low gross profit, and a long chain.

Wang Taizhou, CEO of Shiheng, once mentioned to "Narrow Broadcast", "The reason why food delivery platforms can make money today is because they have spent so many years doing one thing every year: reducing costs. Five years ago, the cost of a delivery order might have been 15 or 13 yuan, but today it might be 8 or 9 yuan, and this is where the profits come from."

The reduction in delivery costs is strongly correlated with the increase in order density. The increase in order density requires strong support from the three-sided network effect of tens of millions of active merchants, millions of active riders, and hundreds of millions of consumers. Only when merchants and riders make money and consumers gain something can the flywheel of the food delivery business continue to roll.

Take riders as an example. In the current market environment, the instant delivery capabilities represented by riders are firmly in the hands of Meituan, Ele.me, Dada and several other third-party companies. The market is stable and the market share is clear. At this time, building a labor-intensive transportation system from scratch would require almost unlimited investment.

The reason why the outside world was cautious about Douyin's food delivery service before was that Douyin's corporate gene is a light business model. It is difficult to support the operation of a huge transportation system in terms of both time and ability. Meituan and Dada/JD.com both started out with a heavy business model and have been doing the dirty and tiring work all the way.

The instant delivery mentality that JD.com has accumulated since its instant retail business, Dada's millions of active riders, and the company's consistent efficiency and pragmatic style are important supports for its entry into the food delivery field today.

In particular, Miaosong’s attempts at delivery of coffee, milk tea, hamburgers and other categories last year helped it accumulate some delivery knowledge in advance and opened up a way into the delivery market.

Coffee and milk tea are high-frequency, low-priced consumption items with a high degree of chain operation and wide coverage, making them suitable as entry-level categories for expanding takeout. JD.com started with coffee and milk tea for takeout, and added a series of low-priced services such as "second delivery" from the beginning. This not only cultivates consumers' habit of consuming quality takeout, but also accumulates experience and methods for making low-priced popular takeout.

Today, the "takeout" entrance has appeared on JD.com's "second delivery" page for half a year. It can be said that every step of JD.com's development in the second delivery business, especially the progress in opening frequency, order volume and other aspects, will more or less accumulate into the mental sedimentation of JD.com's takeout.

According to Dada's financial report, in Q3 2024, the average monthly number of users and order volume of JD.com's delivery service both increased by more than 100% year-on-year, and the daily peak of online orders hit a new high. Last year on Double 11, the daily peak of orders for delivery service hit a new high, and the number of participating stores increased by more than 70% year-on-year.

So, JD.com’s efforts in food delivery may seem sudden, but in fact it is based on basic capabilities and consumer awareness.

Of course, to build a sufficiently excellent and stable food delivery service network, merchants need to consider the frequency, consumers need to experience the food delivery experience, the food delivery time requirements are more stringent, and the platform also needs to see room for long-term growth and profitability. These are all tests of JD’s capital investment and patience in its food delivery business.

However, JD.com is already one of the existing platforms that has the most hope of bringing changes to the market. A healthy and vibrant market should always have new vitality. JD.com's food delivery service started from key categories of quality food delivery and began to explore key markets such as Beijing, which also reflects its ability to grasp a relatively stable rhythm.

03 Takeaway market is revitalized

So, what changes will JD.com’s entry bring to the takeout market?

For a mature market, any new player that can enter must have new differentiated advantages, which will more or less bring about changes in the way of competition and even consumer habits. However, each platform has different resource endowments, organizational capabilities, and investment levels, which will ultimately bring different incremental space to merchants and the market, as well as changes to the industry landscape.

For example, although Douyin’s attempt at food delivery ultimately had limited breakthroughs, it at least brought some innovative ideas to catering brands in terms of traffic generation and marketing plans, allowing more catering brands to pay more attention to investment in content such as live streaming.

Combined with JD.com's basic logistics and retail capabilities, as well as its advantages in population and service, the changes that JD.com's quality food delivery will bring to the food delivery market may be to encourage more formal dining brands to participate in food delivery and develop special food delivery products. This is a completely new business for some merchants, and may therefore bring about an increase in transactions for these merchants and the entire food delivery market.

Perhaps it is to promote the cooperation between some catering brands and other businesses in the JD ecosystem, such as JD Seven Fresh and JD Mall, or to promote some catering brands to develop retail items and reach more consumers through JD's e-commerce business.

JD’s service advantages may also be able to be linked with brands to jointly develop takeaway products or services with better experiences.

In short, JD.com's quality food delivery is a new channel with traditional basic capabilities and differentiation capabilities entering a mature but updated food delivery market. Its future development has visible difficulties, but for now, it has demonstrated its determination and unleashed its imagination.

Author | Pang Mengyuan (Shanghai) Xiao Chao (Kuala Lumpur)