A growing number of people in China are witnessing the rise of new types of business models, which rapidly disrupt, or even destroy, entire industries, including some that are rather old and have supported generations of families. These disruptive models are highly praised by capital markets, rewarded through soaring stock prices, abundant funding, and widespread attention. Policymakers, too, often follow a simple logic: if something is being widely promoted, it must be "good". The reality, however, is rather absurd. Everyone talks about "pursuing development", yet few pause to consider what development actually means, or even why there is development in the first place.
Today, especially in major cities in China, people are increasingly using mobile apps like Meituan to order food. Online food delivery has become commonplace not only in urban centers but even in parts of rural China. Meanwhile, many restaurant owners are voicing concerns. A significant portion of their profits, sometimes 50% or more, is handed over to such platforms. These restaurants have little leverage; faced with the overwhelming influence of platform-based economies, they have no choice but to comply. For them, survival means submission.
According to Meituan's past official data, over 80% of restaurant orders on the platform were charged a commission between 10% and 20%. While this rate may not seem high at first glance, it can rise to as much as 26% for newly opened businesses or those in high-traffic areas, effectively nearing 30%. Even Meituan itself has admitted that during the pandemic, commissions temporarily increased to 20%, with additional pressure on merchants to participate in promotional campaigns offering 30% – 50% discounts. Unsurprisingly, these so-called "promotions" are frequent, pushing total costs to nearly 50% in some cases.
Compare this with the gross profit margin in China's restaurant industry, which typically ranges between 50% and 60%, a figure calculated simply as revenue minus the cost of ingredients. In reality, however, restaurants face much higher overall expenses. After deducting employee commissions, usually 20% – 30%, and accounting for fixed costs such as rent, utilities, and maintenance, which would be another 20% – 30%, most restaurants are left with very little income, or even outright losses. When delivery orders make up a large share of sales, it becomes clear that platform fees can easily consume the majority of a restaurant's profits. In effect, many restaurants are now working for the platforms rather than for themselves. The industry is teetering on the brink of collapse.
With such statistics in mind, one can understand the harsh choices faced by restaurants still trying to stay afloat in China. Their options are limited: they can turn to pre-prepared food, effectively transforming their kitchens into food processing centers; they can try to survive by shifting to high-end pricing models, which often results in little to no customer interest and financial ruin; alternatively, they can simply close their doors and end the business altogether. This bleak picture paints a grim reality, and at this point, the damage seems irreversible.
This pattern has repeated itself time and again throughout China's so-called "tech revolutions", beginning with the rise of e-commerce. Although Jack Ma has repeatedly denied responsibility, what people have witnessed on the ground tells a different story: traditional street-level retail has been in steady decline. Even Shanghai's once-thriving Nanjing Road, which survived wars and decades of change, ultimately could not withstand China's technological wave. Today, it stands as a shadow of its former self. Few people visit physical shops. Shaped by the logic of the platform economy, they have turned to online shopping and food delivery, and without real alternatives, they have grown accustomed to this new consumption model.
From e-commerce to food delivery platforms, and now to emerging technologies like artificial intelligence and autonomous driving, one must ask: what is the underlying logic behind these disruptions? What has the Chinese economy truly lost? What damage has been done to the fabric of Chinese cities? Most appear to have a vague sense that something fundamental has shifted, perhaps even understand what is happening on the surface, but many have yet fully grasped the deeper structural forces at play. The central question is this: What has really driven all of this? Is it yet another business model like e-commerce?
I must admit that in the past, I believed the issue lay with the business model itself. More than a decade ago, I explicitly wrote that the current plight of urban economies was due to e-commerce and urban development policies. Back then, I thought e-commerce would destroy city streets and the local economy. Looking back now, I realize that this was a simplistic "cause-and-effect" view. Since then, I've gained a broader perspective, allowing me to understand the issue in a more expansive context. I now see some validity in Jack Ma's earlier denial; in a sense, he was right when he said it was not his problem. Behind this expression, there was both a sense of disdain for society and an unspoken follow-up: the issue is not the e-commerce business model, but rather the people's choice to embrace it. Jack Ma was, in essence, like a casino owner who, when faced with the life tragedies of gamblers, defiantly declares that the casino is not to blame. Now, I believe that business models like e-commerce and platforms like Meituan are akin to the "casino argument". Ultimately, the real cause of the adverse outcomes lies with people, not the business model itself. It is not the model that is flawed, but rather the failure of successive generations to make better choices.
The current generation is made up of those addicted to online games. Indeed, their obsession with online games and social media, which, in essence, is also a form of game, has destroyed nearly every aspect of society, leading to a structural virtualization of the social environment. What we call the "platform economy" is actually just one manifestation of this virtualized environment.
At its core, every online platform or network relies on human participation and support. Engagement with it is voluntary, often driven by a sense of enthusiasm or even loyalty, sometimes to the point of defense. On the surface, this dynamic can appear inescapable. However, a closer comparison reveals a different reality: the group most profoundly affected by this phenomenon represents only a small fraction of the global population, specifically, several hundred million individuals in China. In most parts of the world, this so-called "internet tsunami" has not swept across societies with the same intensity. Many countries and communities remain relatively unaffected. Street-level commerce continues, restaurants operate as usual, the service industry remains vibrant, and urban economies function without major disruption. In many cities, the public space is not dominated by delivery riders speeding through streets and sidewalks. Even in regions leading technological advancements, such as the U.S. and Europe, where autonomous driving is rapidly evolving, there remains a place for traditional roles like truck drivers. Viewed in this broader context, the lifestyle changes experienced by that particular segment of the population are not the global standard, but rather an exception.
This is not a simple, natural process of replacement, upgrade, or renewal. Rather, it is a coercive transformation driven by a tidal wave-like force that sweeps people along involuntarily. Individuals have little agency in this process; they are caught up in it without truly understanding the consequences. Everything is realized only in hindsight.
This issue is fundamentally a human-based problem. In today's society, many individuals increasingly engage with their phones, endlessly scrolling through content, immersing themselves in video games, or participating in virtual environments, even if reluctantly doing so. There is a prevailing tendency to conform, often willingly accepting limited choices predetermined by others. People appear to prefer a world defined by dropdown menus and preset options, where their so-called "creations" and "innovations" are frequently just extensions of gaming paradigms, now translated into reality through basic programming. From an early age, many are effectively conditioned to remain within this broad framework of digital interaction, rarely escaping its influence. This phenomenon is striking when viewed from a broader human perspective, reminiscent of a "Truman Show" scenario. Yet, for several generations in China, this experience represents an objective and undeniable reality. Consequently, the challenges they face today are fundamentally their own. Ultimately, this is a problem rooted in human nature and societal behavior, rather than the result of specific business models.
This surreal reality is incredibly appealing to modern people, which explains why young people are flocking to it. They have discovered that various forms of real-world "computer games" are everywhere, allowing them to keep playing until everything that can be destroyed is destroyed. I have been discussing the issues of aging and declining birth rates for decades, and I have long grown weary of the topic. However, I must admit that I still do not fully understand how this distorted era is destroying the society and cities I once knew. Yet, I now seem to have a clearer picture, as the path to destruction is gradually revealing itself. It takes the form most favored by today's masses, a kind of uncontrollable social virtualization where everyone participates in dismantling industry after industry. Through massive environmental and industrial annihilation and through destructive cycles of iteration, this process completes the transition into an era defined by aging and declining birth rates.
In fact, China's business models have now been greatly simplified, and reality has become very straightforward. Everything has shifted online. As long as something can go viral, regardless of the theme, purpose, or content, the content creator can sweep everything away. Once there are clicks and online traffic, one essentially controls the world of hundreds of millions of people in China. In this regard, technology and performance actually matter very little. What is more important is that people have no other choice.
Hence, marketing in China today has become extremely simple and blunt. The so-called "live streaming" is a perfect example of this reality. One no longer needs to consider all the elements required by a well-established brand, i.e., quality, refinement, knowledge, technology, or authenticity. As long as there is online traffic, even the worst products can be sold. Therefore, business models and marketing today have been reduced to simply creating an "internet tsunami", i.e., getting things viral, and that alone is enough. The other side of the problem is that, since business models have become so simple, people are left with no choice but to rely on generating these "internet tsunamis" to achieve their marketing goals.
Perhaps this is the inevitable consequence of a "dimension-reducing society". It is not progress but a gleeful choice to regress through technology. In terms of environmental development, humanity has chosen a path toward a completely unpredictable dark age. This is an uncontrollable era, as proven by the many industries that have already been lost or are in the process of disappearing.
