How Do Pricing Strategies and Network Effects Influence the Competition Between Leading Food Takeout Platforms, Meituan and ELE in China?
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How Do Pricing Strategies and Network Effects Influence the Competition Between Leading Food Takeout Platforms, Meituan and ELE in China?

Mofei Zhang 1* Lecheng Xu 2, Tianru Huang 3
1 University of Connecticut
2 Beijing Jiaotong University
3 University of Manchester
*Corresponding author: zhangmofei6@gmail.com
Published on 11 July 2025
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AEMPS Vol.202
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-263-8
ISBN (Online): 978-1-80590-264-5
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Abstract

We analyzed the competition between China's leading food delivery platforms, Meituan and Ele.me, and focused on exploring how pricing strategies and network effects affect the competitive dynamics between platforms. Firstly, we reviewed the overall development history of the food delivery industry and elaborated on the competitive history of the two platforms. We explored the economic value of multi-platform operation in this competitive context and the role of subsidy strategies in promoting the migration of businesses and consumers between multiple platforms. Through analyzing pricing games and multi platform operation strategies, we found that both Meituan and Ele.me face the dilemma of profit compression in fierce price competition, which damages the interests of both platforms. We believe that the government should intervene through anti-monopoly regulatory measures to promote a healthier market competition environment. This study not only provides in-depth insights into the platform economy for the academic community but also provides practical references for policymakers and market participants.

Keywords:

platform competition, network effects, pricing strategies, delivery market

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Zhang,M.;Xu,L.;Huang,T. (2025). How Do Pricing Strategies and Network Effects Influence the Competition Between Leading Food Takeout Platforms, Meituan and ELE in China?. Advances in Economics, Management and Political Sciences,202,74-85.

References

[1]. E. Rosenkopf et al., "Social Network Effects on the Extent of Innovation Diffusion: A Computer Simulation, " Organization Science, vol. 8, no. 3, pp. 289–309, 1997.

[2]. J.-C. Rochet and J. Tirole, "Platform Competition in Two-Sided Markets, " Journal of the European Economic Association, vol. 1, no. 4, pp. 990–1029, 2003.

[3]. R. S. Lee, "Competing platforms, " Journal of Economics & Management Strategy, vol. 23, no. 3, pp. 507-526, 2014.

[4]. E. J. Altman and M. Tushman, "Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective, " SSRN Electronic Journal, 2017, doi: 10.2139/ssrn.2915213.

[5]. R. Adner et al., "What Is Different about Digital Strategy? From Quantitative to Qualitative Change, " Strategy Science, vol. 4, no. 4, pp. 253–261, Dec. 2019.

[6]. M. Maimaiti et al., "How We Eat Determines What We Become: Opportunities and Challenges Brought by Food Delivery Industry in a Changing World in China, " European Journal of Clinical Nutrition, vol. 72, no. 9, pp. 1282–1286, Sept. 2018.

[7]. Y. Zhang and X. Deng, "Analysis of Food Delivery Market in China: A Case Study of Meituan, " ResearchGate, 2021. [Online]. Available: www.researchgate.net/publication/353927655_Analysis_of_Food_Delivery_Market_in_China_A_Case_Study_of_Meituan.

[8]. M. Chen, M. Hu, and J. Wang, "Food delivery service and restaurant: Friend or foe?, " Management Science, vol. 68, no. 9, pp. 6539-6551, 2022.

[9]. Y. Bo et al., "Food-Delivery Platforms: A Near-Optimal Policy for Capacity Sizing, Order Batching, and Spatial Routing, " SSRN Electronic Journal, 2023. doi: 10.2139/ssrn.4483564.

[10]. Y. Bakos and H. Halaburda, "Platform competition with multihoming on both sides: Subsidize or not?, " Management Science, vol. 66, no. 12, pp. 5599-5607, 2020.

[11]. J. B. Schor et al., "Dependence and Precarity in the Platform Economy, " Theory and Society, vol. 49, Aug. 2020. doi: 10.1007/s11186-020-09408-y.

[12]. Z. Lan, “Analysis and strategy of take-out industry based on Porter’s Five Forces model -- taking Meituan Take-out as an example, ”  Highlights in Business, Economics and Management, vol. 17, pp. 191–196, Aug. 2023, doi: https: //doi.org/10.54097/hbem.v17i.11176.

[13]. M. Armstrong, Human Resource Management Theory and Practice, London Bath Press Ltd., 2004. Available: https: //www.scirp.org/reference/referencespapers?referenceid=2875635.

[14]. A. Raizonville, "Platform Coopetition in Two-Sided Markets, " Revue d’Économie Industrielle, vol. 172, no. 4, pp. 19–53, 2020. Available: https: //ideas.repec.org/a/cai/reidbu/rei_172_0019.html.

[15]. J. Kong, "Research on Price War of E-commerce Enterprises Based on Game Theory——Take Meituan as an Example, " Logistics Engineering and Management, vol. 43, no. 8, pp. 105-108, 2021.

References

[1]. E. Rosenkopf et al., "Social Network Effects on the Extent of Innovation Diffusion: A Computer Simulation, " Organization Science, vol. 8, no. 3, pp. 289–309, 1997.

[2]. J.-C. Rochet and J. Tirole, "Platform Competition in Two-Sided Markets, " Journal of the European Economic Association, vol. 1, no. 4, pp. 990–1029, 2003.

[3]. R. S. Lee, "Competing platforms, " Journal of Economics & Management Strategy, vol. 23, no. 3, pp. 507-526, 2014.

[4]. E. J. Altman and M. Tushman, "Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective, " SSRN Electronic Journal, 2017, doi: 10.2139/ssrn.2915213.

[5]. R. Adner et al., "What Is Different about Digital Strategy? From Quantitative to Qualitative Change, " Strategy Science, vol. 4, no. 4, pp. 253–261, Dec. 2019.

[6]. M. Maimaiti et al., "How We Eat Determines What We Become: Opportunities and Challenges Brought by Food Delivery Industry in a Changing World in China, " European Journal of Clinical Nutrition, vol. 72, no. 9, pp. 1282–1286, Sept. 2018.

[7]. Y. Zhang and X. Deng, "Analysis of Food Delivery Market in China: A Case Study of Meituan, " ResearchGate, 2021. [Online]. Available: www.researchgate.net/publication/353927655_Analysis_of_Food_Delivery_Market_in_China_A_Case_Study_of_Meituan.

[8]. M. Chen, M. Hu, and J. Wang, "Food delivery service and restaurant: Friend or foe?, " Management Science, vol. 68, no. 9, pp. 6539-6551, 2022.

[9]. Y. Bo et al., "Food-Delivery Platforms: A Near-Optimal Policy for Capacity Sizing, Order Batching, and Spatial Routing, " SSRN Electronic Journal, 2023. doi: 10.2139/ssrn.4483564.

[10]. Y. Bakos and H. Halaburda, "Platform competition with multihoming on both sides: Subsidize or not?, " Management Science, vol. 66, no. 12, pp. 5599-5607, 2020.

[11]. J. B. Schor et al., "Dependence and Precarity in the Platform Economy, " Theory and Society, vol. 49, Aug. 2020. doi: 10.1007/s11186-020-09408-y.

[12]. Z. Lan, “Analysis and strategy of take-out industry based on Porter’s Five Forces model -- taking Meituan Take-out as an example, ”  Highlights in Business, Economics and Management, vol. 17, pp. 191–196, Aug. 2023, doi: https: //doi.org/10.54097/hbem.v17i.11176.

[13]. M. Armstrong, Human Resource Management Theory and Practice, London Bath Press Ltd., 2004. Available: https: //www.scirp.org/reference/referencespapers?referenceid=2875635.

[14]. A. Raizonville, "Platform Coopetition in Two-Sided Markets, " Revue d’Économie Industrielle, vol. 172, no. 4, pp. 19–53, 2020. Available: https: //ideas.repec.org/a/cai/reidbu/rei_172_0019.html.

[15]. J. Kong, "Research on Price War of E-commerce Enterprises Based on Game Theory——Take Meituan as an Example, " Logistics Engineering and Management, vol. 43, no. 8, pp. 105-108, 2021.

Cite this article

Zhang,M.;Xu,L.;Huang,T. (2025). How Do Pricing Strategies and Network Effects Influence the Competition Between Leading Food Takeout Platforms, Meituan and ELE in China?. Advances in Economics, Management and Political Sciences,202,74-85.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of the 3rd International Conference on Financial Technology and Business Analysis

ISBN: 978-1-80590-263-8(Print) / 978-1-80590-264-5(Online)
Editor: Ursula Faura-Martínez
Conference website: https://2024.icftba.org/
Conference date: 13 June 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.202
ISSN: 2754-1169(Print) / 2754-1177(Online)

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