In the first half of 2025, China's food delivery industry continued to expand, with the overall market size reaching RMB 1.5 trillion, marking significant growth compared to 2024. Within the food and beverage (F&B) industry, sales through delivery channels now account for 26%, nearly double that of 2019. Statistics also show that China has 545 million online food delivery users, and the market size for food delivery alone is approximately RMB 1.2 trillion. On average, people spend nearly RMB 3.3 billion per day on food delivery. These booming figures seem to indicate that the food delivery and instant logistics sectors are currently in a phase of rapid growth.
However, a deeper look into the foundation, cost, and labor structure of the food delivery industry in the country reveals that it may soon decline from its peak and enter a downward trajectory.
A senior researcher at ANBOUND recently conducted field research in a sub-center of a certain Chinese city and took time to observe food delivery riders working on the streets. These delivery riders constantly checked their phones and hurried to deliver orders in the sweltering summer heat. The researcher predicts that, given the current form of delivery logistics, the food delivery industry may have only about a decade of viability left.
Firstly, from a labor force perspective, the majority of food delivery riders are currently concentrated in the under-40 age group. According to the Research Report on the Living Conditions of Food Delivery Riders, compiled by a research team from the School of Sociology at Nankai University based on 41,000 sample responses, 95.56% of riders are male, with women making up less than 5%. The average age is 33, and nearly 80% of riders fall within the 21 to 40 age range. This is because food delivery places extremely high demands on physical fitness as it requires weaving through traffic during peak hours, and enduring extreme heat, cold waves, and severe weather conditions to complete time-sensitive deliveries. Once a rider is over 40, most find it difficult to keep up with the physical intensity required for the job. In other words, this is not a career one can realistically sustain for ten or twenty years. Therefore, with China's declining birthrate and younger generations increasingly unwilling to take on high-risk and intensive work, the future supply of food delivery riders is likely to face structural tightening.
Secondly, beyond age demographics, climate factors will also become a major variable affecting the food delivery rider industry over the next decade. Scientific studies have already pointed out that the global average temperature is rising at a rate of 0.2–0.3°C per year. By around 2035, many regions in China are expected to experience over 40°C as the regular temperature during summers, with an increase in the frequency of heavy rainfall and typhoons in certain areas. This means that the threshold for performing high-intensity outdoor work will rise significantly. The safety risks and health burdens brought on by extreme weather will further deter existing workers from staying in the field. This represents an irreversible and severely underestimated structural challenge, posing a substantial threat to the current delivery model that relies heavily on large numbers of outdoor riders.
Finally, there is the issue of rising costs. Estimates show that in 2024, the total gross merchandise value (GMV) of the national food delivery market reached RMB 1.6 trillion, with total rider-related costs ranging between RMB 80 billion to RMB 100 billion, accounting for 10% to 15% of the total. In terms of per-order pricing, the national average order value currently sits between RMB 50 to RMB 65, while the rider cost per order is around RMB 7 to RMB 9, making up 14% to 18% of the order value. Notably, starting in 2025, local governments across China have been gradually implementing policies to include delivery riders in the social insurance system. Although a full "employee model" has yet to be adopted, most platforms are already contributing partially to social insurance for their core riders, increasing the per-order labor cost by an additional RMB 0.3 to RMB 0.5. If in the future this expands to full coverage of social insurance, commercial insurance, and even housing provident fund contributions, the unit labor cost for platforms will rise further. Should delivery service costs eventually account for 40% of the order price, the entire business model would become unsustainable and collapse.
The above-mentioned senior researcher at ANBOUND predicts that by around 2030, the proportion of rider costs could rise further to 40%–60%. This means that if a consumer currently places a food delivery order priced at RMB 30, the platform may need to raise that price to RMB 45– RMB 50 or more to maintain its profit structure. What consumers are paying for is not better service or higher product quality, but merely the basic delivery cost needed to keep the platform running. Once prices continue to rise without a corresponding increase in perceived value, consumers may start opting for other forms of consumption instead.
Therefore, the high growth of food delivery business in China is, in fact, unlikely to last, as this is simply not a sustainable industry.
What then, will the direction of this sector be? ANBOUND's team believes there are two possible scenarios.
The first is the revival of street-level commerce. Business will shift from being in the background to once again taking a front-facing role, at least partially returning to traditional street-based retail. When food delivery is no longer cost-effective, consumers will naturally prefer to opt for dine-in. This implies that convenience stores, neighborhood shops, and street-level businesses will see new opportunities for revitalized growth. From an urban planning perspective, the commercial ecosystem previously dominated by "platforms + warehousing + traffic portals" will need to be rethought to allocate more space and value to street-facing commercial zones.
The second possible direction is technological substitution, such as drone delivery, smart robots, and other innovations that have been frequently discussed in recent years. While these solutions have a certain level of technical feasibility, their actual implementation across society faces significant systemic challenges. This is not a task that any single unicorn company can accomplish on its own, since it involves a wide range of systems engineering, including traffic management, infrastructure development, legal compliance, logistics redistribution, and energy consumption coordination. Over the next decade, this type of delivery method is likely to be limited to small-scale pilots within a few industrial parks or gated communities, hence insufficient to support a full industry-wide transformation.
Therefore, between the two possibilities, the revival of street-level commerce appears to be the more likely direction.
It is worth noting that in recent years, platform-based economies, flexible employment, and new forms of consumption have become key areas of policy support, largely driven by the need to counter the impact of the pandemic, boost consumption, and stabilize employment. However, as the effects of the pandemic gradually fade, some of the deeper issues within the food delivery industry are starting to surface. Recently, while the intense subsidy battles between food delivery platforms may have excited consumers, they have also caused concern in capital markets. Chinese state media have also published articles criticizing the industry's intense competition, noting that the surge in orders is fueled by irrational consumption and shrinking profit margins per order, while riders are overworked, ultimately impacting the quality of both goods and delivery service. The central message of these articles is that such a price war leaves no winners, and the true future potential lies in competition through innovation.
All in all, whether the current development model of the food delivery industry in China is truly sustainable in the long term is a question well worth deep reflection. On one hand, food delivery does meet consumers' demand for convenience. On the other hand, a business model that heavily relies on labor-intensive delivery may need to innovate and find a new balance as it faces challenges such as rising labor costs and increasingly frequent extreme weather conditions.
Of course, the food delivery industry in the country will not disappear entirely. It will continue to exist in certain cities and specific scenarios, such as office districts or communities with elderly residents. However, the industry may shift from being a broadly covered, low-cost, high-frequency, platform-dominated urban infrastructure to becoming an optional service rather than an essential one.
Final analysis conclusion:
Despite being branded as part of the "new employment" wave and often associated with technological advancement, the food delivery industry in China remains, at its core, a labor-intensive sector. No amount of policy support can fundamentally alter that reality. Its growth today may be a temporary shift in form rather than substance, one that, within the next decade, could very well fade and return to its original state.
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Zhijiang Zhao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
