"Joint Kitchen" Takes Aim at "Ghost Delivery": What Strategic Game is JD.com Playing?

Deep News
04 Aug

Bringing "signature dishes" to large-scale sales!

"We are grateful for the overwhelmingly enthusiastic response from restaurants and chefs across the nation! From the registration information, we truly see the pain points that small and medium-sized catering businesses face in achieving chain and large-scale operations, and we witness the regret of individual chefs who possess recipe secrets but struggle to pass them on and promote them." One week after launching the "Dish Partner" recruitment program and receiving 66,000 applications from across the country, Seven Fresh Kitchen expressed gratitude while stating they would soon announce the "Dish Partner" selection mechanism. Through national competitions, they aim to select "champion recipes" for consumers and bring 1,000 signature dishes to millions of households.

Seven Fresh Kitchen is JD.com's latest "joint kitchen" venture. The term "joint" relates to its operational model, which primarily recruits "dish partners" from brand restaurants and individual chefs. After jointly developing high-quality dish recipes, these dishes are launched on Seven Fresh Kitchen and delivered to consumers as "high-quality takeout" through Seven Fresh Kitchen's offline stores.

On July 22, Seven Fresh Kitchen's first offline store officially opened in Dongcheng District, Beijing. This new business format, emphasizing "fresh stir-frying and cooking, rejecting pre-made dishes" with transparent kitchens and traceable ingredients as core selling points, has attracted tremendous attention. According to public reports, during the first week of operation, the flagship store averaged over 1,000 daily orders, with a 3-day repeat purchase rate 220% higher than the industry average. Its traffic radiation boosted total orders from thousands of restaurants within a 3-kilometer radius by 12% month-over-month.

On the day of the flagship store's opening, Seven Fresh Kitchen simultaneously launched the "Dish Partner" recruitment program, investing 10 billion yuan to find partners for 1,000 signature dishes. Partners only need to provide dish recipes and collaborate on research and development, while Seven Fresh Kitchen—the joint quality dining platform—handles fresh cooking and strict quality control. Several well-known catering brands, including Chef Fei, Jiahe Yipin, Ziyan Baiwei Chicken, and Uncle Park's Rice Bowl, have already registered as first-batch candidate partners.

"Partner chef recipes × Seven Fresh Kitchen's fresh cooking" targets exactly what has long plagued the food delivery industry—ghost delivery services.

**Innovative Supply Chain Model Makes Seven Fresh Kitchen a Hit**

"The meat is genuinely abundant, and you can tell it's fresh, thick-cut pieces, stir-fried tender—not like the scrappy leftover pieces from many delivery services. At the original price of 33.8 yuan, the beef quantity is quite substantial, and at 18 yuan after discount, this meat quality is truly surprising." After ordering "Stir-fried Beef Rice" from Seven Fresh Kitchen, one consumer shared this review on social media.

This 18.99 yuan post-discount meal, in the blogger's view, wasn't overly greasy and was relatively healthy; the spiciness was moderate and just right; the rice grains were distinct, neither sticky nor mushy. Comments below the post included exclamations about the beef portions and inquiries about "where in Beijing can I find this."

Although lacking dine-in seating, during its opening week, Seven Fresh Kitchen's flagship store—located on the west side of the first floor of Changbao Building in Beijing's Dongcheng District and using robotic cooking—still welcomed waves of curious visitors.

Inside the store, "chefs" in blue uniforms pour clean ingredients into pots. With just the press of a button and one-click "start," the process begins: adding oil, garlic, meat, and chili peppers—each step precisely timed by robots until completion. The "chefs" then remove, portion, and package the finished dishes. Some are collected by delivery riders, while others are picked up by nearby consumers.

In fact, as early as June 17 during a small-scale internal media briefing, JD.com founder and chairman Liu Qiangdong mentioned that in one month, JD.com's food delivery would feature a completely different business model, expressing hope that this model would enable consumers to purchase high-value, safe food. One month later, just as national regulators summoned major delivery platforms to halt "destructive" price wars, Seven Fresh Kitchen emerged, confirming Liu's earlier statements.

This year, JD.com has consecutively entered the hospitality and food delivery industries, attracting significant attention. Regarding the logic behind entering these sectors, Liu Qiangdong stated, "All of JD.com's businesses revolve around supply chain." The same applies to Seven Fresh Kitchen. When interviewed, business leader Liu Bin even claimed, "This might be the biggest supply chain model innovation in the restaurant delivery market in 15 years."

Traditional catering is inherently asset-heavy, with costs for rent, utilities, labor, and ingredients. When traditional catering's cost baseline requirements conflict with delivery platforms' and consumers' demands for low prices, merchants—as primary product and service providers—often suffer.

During recent food delivery "price wars," Jiahe Yipin founder Liu Jingjing bluntly stated, "Merchants have no traffic without participating in subsidy activities—customers can't see you, so naturally there are no orders. But when forced to participate, you get money-losing promotional orders. Staff are exhausted, and restaurants are nearly bankrupt."

Seven Fresh Kitchen's "joint operation model" offers merchants "asset-light" operations. Whether rent, utilities, labor, ingredient costs, or order delivery—JD.com provides comprehensive coverage. Merchants acting as "dish partners" need only contribute dish recipes and focus their limited energy on perfecting dish taste and quality to "earn passively," receiving guaranteed minimum revenue of 1 million yuan plus uncapped sales commissions. This is obviously much more convenient than opening their own stores, especially for mom-and-pop establishments.

**Signature Dishes Move Toward Large-Scale Sales**

As Seven Fresh Kitchen gains popularity, a concern many people have arises: when JD.com uses its massive supply chain advantages to drive down quality food delivery prices, will it steal business from traditional restaurants, making it impossible for them to survive?

Essentially, Seven Fresh Kitchen's "Dish Partner" program is a profound implementation of cost-efficiency theory. According to previously announced information, JD.com is investing 10 billion yuan to build new supply chains, planning to establish 10,000 Seven Fresh Kitchen locations nationwide within three years. One objective is enabling quality restaurants to escape operational pressure and achieve large-scale sales for incremental growth.

For small-profit mom-and-pop shops, becoming Seven Fresh Kitchen "dish partners" could yield far greater returns than operating independently, as Seven Fresh Kitchen stores spread nationwide and popular dishes gain traction. Particularly for individual chefs with secret recipes, Seven Fresh Kitchen's "joint model" both monetizes their "intellectual property" and helps promote inherited classic recipes.

The logic is similar for traditional restaurants. A single restaurant can serve limited customer traffic. To increase revenue, the most direct approach is opening more locations, but this means higher costs and potential losses from poorly performing new outlets. Chain and large-scale operations remain pain points for small and medium catering businesses. Now, through supply chain innovation, JD.com helps traditional restaurants save new store costs—restaurants need only contribute dish recipes to share revenue from future nationwide Seven Fresh Kitchen locations.

In essence, traditional restaurants can effectively open 10,000 nationwide branches over three years by contributing only dish recipes, without cash investment. No wonder well-known brands like Chef Fei, Jiahe Yipin, Ziyan Baiwei Chicken, and Uncle Park's Rice Bowl eagerly joined the "Dish Partner" recruitment program upon its launch.

Traditional restaurants can certainly continue operating their existing locations and proceed with original expansion plans. On one hand, with 10,000 Seven Fresh Kitchen stores as foundation, traditional restaurants' revenue and profit situations will improve to some extent. On the other hand, many restaurants' signature dishes, previously known only locally, will gain recognition across broader regions through 10,000 Seven Fresh Kitchen locations' "free advertising." When opening new locations elsewhere, they'll save on "customer cultivation" costs and directly acquire established "regulars."

Currently, Seven Fresh Kitchen's actual operation time remains short, with only one flagship store open. However, according to public reports, this single ~300-square-meter store in Dongcheng District has boosted orders for thousands of restaurants within a 3-kilometer radius by 12% month-over-month within one week of operation, achieving regional catering win-win results. If this trend continues as 10,000 stores gradually open, the economic benefits generated in commercial districts will be considerable.

**Low Prices Can Still Mean Quality: Eliminating "Ghost Delivery"**

In fact, Seven Fresh Kitchen's target was clear from the start: "ghost delivery" services.

Some delivery platform stores display appetizing dishes that look delicious and colorful. However, these online stores may have no physical locations, let alone dine-in options. "I'd even call them 'phantom delivery,'" one delivery rider stated in a self-recorded video, explaining that consumers don't know where these "ghost delivery" services are located, and even delivery riders can't find them. When picking up orders, they must call merchants and follow directions—left turn, right turn, left turn, right turn—through a maze of detours. After pickup, riders may not even find their way back.

This isn't the most unacceptable aspect of "ghost delivery"—to some extent, they could be called "toxic delivery." At this year's CCTV "315" consumer rights gala, the exposed national fast-food brand "Yang Mingyu Yellow Braised Chicken" featured shocking "zombie meat" and "overnight dishes" in back kitchens. Overnight beef was "renovated" with coloring, leftover dishes were recycled and rewashed for resale, and raw meat was handled bare-handed next to garbage bins. "Ghost delivery" services hidden in residential building black workshops have even worse "dirty, messy, poor" production environments and ingredient freshness and hygiene levels. While consumers can't see kitchens, they consume all the risks.

According to iResearch data, from 2015 to 2024, China's restaurant delivery market scale climbed from 125 billion to 1.5 trillion yuan, with a compound annual growth rate (CAGR) of 28%. Food delivery's penetration rate in the overall catering industry grew from 4% to 26%, showing explosive growth. Food delivery users reached 592 million, representing 53% of all internet users—delivery services have become essential for over half of Chinese netizens.

Through supply chain model innovation, Seven Fresh Kitchen offers potential "dish partners" a new asset-light, low-risk revenue stream. For broad consumer groups, it means the "high-quality, affordable" food delivery options are expanding.

Leveraging JD.com's long-accumulated supply chain advantages and the scale effects of future nationwide Seven Fresh Kitchen expansion, first, Seven Fresh Kitchen can source fresher, cleaner ingredients at relatively lower prices. Second, robotic cooking maximizes per-unit labor output. Regarding food safety and hygiene concerns paramount to delivery consumers, the entire process from ingredient sourcing to meal preparation can be fully traced through JD.com's technological capabilities. Additionally, meal preparation processes are monitored by cameras broadcasting kitchen operations live, maximally preventing potential irregularities.

"'Ghost delivery' services achieve low prices primarily through low or no storefront costs and using low-quality, cheap ingredients and inferior oil, compressing dish costs to extremes to gain price advantages and capture price-sensitive consumer segments," said iiMedia Research CEO and Chief Analyst Zhang Yi. Seven Fresh Kitchen provides an ideal "win-win" model for merchants and consumers, with relatively high standards for food hygiene, safety, and taste. Achieving low prices under such "high standards" is extremely difficult. Seven Fresh Kitchen's current model is certainly good—at similar price points, consumers naturally prefer safer, cleaner, more delicious dishes compared to "ghost delivery." However, whether Seven Fresh Kitchen's model can sustain under "high standard" pressures requires further verification through future store expansion and operational practice.

Compared to the entire trillion-level delivery market, Seven Fresh Kitchen—even achieving its planned 10,000-store target—can serve only limited populations. However, for eliminating "ghost delivery" services and providing safer, more delicious, affordable meals within coverage areas, this represents a tremendously beneficial endeavor. In Zhang Yi's view, solving the "ghost delivery" problem most importantly requires stricter operating licenses, admission mechanisms, and penalty systems to increase compliance costs for "ghost delivery" services, deterring violations.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10