Profound structural changes are taking place in China's catering industry today.

From Scale Supremacy to Trust First

The controversy surrounding pre-prepared meals has been perhaps the most talked-about topic this year.In early September, Luo Yonghao posted on Weibo, questioning that Xibei used pre-prepared meals without informing consumers; subsequently, Jia Guolong, founder of Xibei, responded that "Xibei has not a single pre-prepared meal," triggering a nationwide discussion. Every customer is worried about eating pre-prepared meals, and every restaurant is struggling to prove it doesn't serve them.Why did a simple question of "whether the dishes are cooked to order" escalate into a major trust crisis?Many people think Jia Guolong was lying. He claimed "Xibei has no pre-prepared meals" while using semi-finished products not made on-site in stores. Strangely, he dared to open his kitchens to public inspection.Why? Because in the eyes of many industry insiders, only ready-to-heat meal packs in plastic containers qualify as "pre-prepared meals." In contrast, pre-processed ingredients like beef brisket and lamb shanks handled by central kitchens are considered "prepped ingredients," not pre-prepared meals. However, most consumers believe any dish not fully cooked from scratch in the restaurant's kitchen is a pre-prepared meal.On one side is the "industry definition," and on the other is the "public definition." The two sides have never been on the same page, leading to a classic case of "talking past each other."This is not a dispute over facts—whether pre-prepared meals are used—but over terminology—what to call them.For large-scale catering brands, pre-prepared meals offer a better solution for safety and efficiency.We all have a basic understanding: a small restaurant where the owner buys fresh vegetables from the market every morning and cooks them to order is certainly safer than using industrial semi-finished products.This holds true for independent small eateries. But when a restaurant expands into a national chain with 200 or 500 stores, the situation reverses entirely.Decentralized procurement means an exponential increase in risks. The central kitchen model, by contrast, minimizes food safety risks through centralized purchasing, standardized processing, and end-to-end cold chain logistics.Since the two sides cannot reach a consensus, transparency is the ultimate solution.When the conflict between the "industry definition" and "public definition" becomes irreconcilable, and the logic of "industrial efficiency" and "kitchen safety" seems counterintuitive, further debate is pointless. The only viable solution is to return the right to choose to consumers.Looking back at the entire controversy, regardless of the complex underlying reasons, one thing is clear:While pre-prepared meals have indeed brought greater scale and higher efficiency, public trust in this "invisible" system has been stretched to its limit.The future of catering does not lie in abandoning scale, but in moving beyond scale worship to find a balance between scale, efficiency, and customer experience. It means rebuilding trust while pursuing scale and efficiency. This is the first profound change taking place in China's catering industry in 2025:The focus of operations is shifting completely from B-end "scale supremacy" to C-end "trust first."

From Frenzied Burning of Cash to Rationality: The "Food Delivery War" as a Keyword

In February, JD.com made a high-profile entry with 10 billion yuan in subsidies and the slogan "30-minute delivery"; in April, Alibaba upgraded its "flash sale" service to fight back, integrating on-demand retail and food delivery scenarios; in May, Meituan quickly counterattacked, vowing to "win the price war with efficiency"; in June, platform subsidies became normalized—red envelopes, free delivery, and "zero-yuan purchases" became standard. Driven by these incentives, order volumes hit new highs. In July, the food delivery market, which usually handles less than 100 million orders per day, once surged to 200 million orders in a single day.Amid the excitement, a strange phenomenon emerged: everyone talked about how many orders they handled, but almost no one mentioned how much money they made.According to data, Alibaba's food delivery business is estimated to have lost 35 to 40 billion yuan in the third quarter; JD.com's new businesses, including food delivery, recorded a loss of 14.77 billion yuan in the second quarter.It's a business everyone is eager to enter, yet most seem to be losing money.Food delivery involves a delicate balance of "four-party interests."Most businesses only involve buyers and sellers. But food delivery involves at least four parties: consumers, merchants, riders, and platforms. Satisfying all four is no easy task.Should food delivery be more expensive or cheaper than dining in?Consumers say it should be cheaper—they don't occupy seats or use waiters. Merchants argue it should be more expensive—they need to use special containers for packaging. Riders don't care about the price; they just want their delivery fees. When positions override business logic, emotions prevail over reason.The core of food delivery lies in using algorithms to manage complexity.Food delivery requires "analyzing each situation on its merits." Meituan's dispatch system executes approximately 2.9 billion route-planning algorithms per hour. This is a huge test of the ability to manage complexity.Food delivery has never been a simple game of "traffic + subsidies." Behind it are complex fulfillment networks, sophisticated algorithmic dispatching, and the livelihood balance of countless merchants and riders. It cannot be sustained by mere "physical effort."The subsidy war ignores this reality, attempting to solve "mental work" problems with "physical labor." After a period of irrational frenzy, the entire industry is undergoing calm reflection—a second profound change:The direction of operations is shifting from cost-agnostic "frenzy" back to common-sense "rationality," from blind internal competition to intensive cultivation.

New Strategies: Structural Cost Advantages and Customer-Centric Operations

These two phenomena make it clear that the old ways of relying on physical labor and burning cash are starting to fail.On one hand, the market is becoming increasingly competitive; on the other, consumers are becoming more sophisticated. Competing on speed and scale alone can only lead to low-level mutual damage.Therefore, our strategies must change. This cannot be achieved through overtime work, but through structural cost advantages.We need to redesign our profit models from the ground up.

Satellite Stores

Satellite stores are small outlets located in communities near the main restaurant, operating like satellites. These stores have fewer staff and lower rents, focusing exclusively on food delivery. According to Meituan data, the per unit area efficiency of this store type is 56% higher than that of regular stores, and the investment recovery period is shortened by 55%.

Shared Stores

A shared store is not about multiple people renting a single space, but one store operating multiple businesses. For example, the kitchen produces fast food bento during the day and barbecue at night; the dining area serves as a fast-food restaurant during the day and a small bar in the evening. With one rent, the store can operate across multiple time periods and scenarios.

Genuine low costs are not achieved through penny-pinching, but through intelligent business model design.

Digital Asset Management

Merchants should carefully maintain their online platform profiles, rather than treating them merely as a place to sell group-buying coupons.Every carefully uploaded photo and thoughtfully responded review will continuously bring in new customers, just like interest accruing on savings. These reviews and photos are the most important decoration and assets of your online storefront.

Behind these new strategies is a shift in focus—from obsessing over external metrics like expansion and traffic to looking inward at operational efficiency and customer needs.

The Core of Change: Irreversible Shift from B-End to C-End

China's catering industry is undergoing a profound structural transformation, with the core being an irreversible shift in operational focus from the B-end to the C-end.In the past, many businesses operated with a B-end mindset: How to reduce costs and improve efficiency? How to expand scale? They focused on supply chain loss rates and store table turnover rates.Today, all business logic must start with the C-end—with the customer. The starting point must be: What are their true expectations? How can I win their trust?When customer preferences change, business logic must adapt. When customers are no longer obsessed with "low prices," businesses must provide genuine "rational value."A purely B-end efficiency-focused mindset can no longer win C-end trust. Pure price competition only leads to eroded profits and a price system that takes a long time to recover. To help merchants achieve long-term sustainable operations, platforms have emphasized three core tasks: bringing customers in, delivering meals out, and improving efficiency.

All irrational frenzy will ultimately succumb to the most fundamental business logic.