Chinese authorities are intensifying their crackdown on "ghost kitchens"—businesses that operate solely on food delivery apps without actual physical storefronts—after uncovering over 67,000 cases of fake licenses. They have issued strict rules requiring major food delivery apps to rigorously verify the locations and business licenses of restaurants.
China's leading food delivery platforms face tighter regulatory oversight following new rules effective 1 June 2024. These regulations mandate all food delivery apps to carefully verify the business licenses and physical locations of restaurants, ensuring app information matches real addresses. Shops must clearly disclose if they do not offer dine-in services, aiming to eliminate "ghost kitchens" that have raised serious food safety concerns among consumers.
This major crackdown follows an incident last year when a man in Beijing filed a complaint with local authorities after ordering a cake via a delivery app and discovering the decorative flowers on the cake were inedible.
Further investigation by officials revealed a shocking truth: the cake brand was registered on nearly 380 major e-commerce platforms, yet none had an actual physical storefront. All these online shops used fake business licenses. Moreover, all cake orders were forwarded to intermediary platforms to be auctioned off to the lowest-bidding factories or third-party producers.
Xinhua News Agency reported officials found up to 3.6 million cake orders processed through two intermediary platforms. They also identified more than 67,000 "ghost stores" with similar patterns across seven major food delivery platforms, which collaborated to form an illegal supply chain network. An employee from one app admitted to authorities that the platform had been relatively lax because strict enforcement would drive these shops to competitors' apps instead.
China's food delivery market is fiercely competitive with aggressive price-cutting, often impacting delivery riders who must work under tight deadlines for minimal pay.
In April, China's State Administration for Market Regulation fined seven major e-commerce and delivery platforms—including Taobao, JD.com, Meituan, and Pinduoduo—a total of 3.6 billion yuan (approximately 18 billion baht) for offenses mainly related to allowing ghost stores and delivery of nonexistent goods.
Amid ongoing crackdowns, legitimate delivery businesses are striving to regain consumer trust. In Hangzhou, eastern China, over 20 delivery shops have installed "transparent kitchens" that livestream food preparation in real time, allowing customers to monitor hygiene continuously.
Meanwhile, in Anhui province, local authorities signed food safety agreements with platforms Meituan, Taobao, and JD.com. They plan to use artificial intelligence (AI) technology to inspect kitchen cleanliness and establish reward systems for delivery riders who report illegal or substandard shops, jointly working to eliminate ghost kitchens nationwide.
/source/ (no translation needed)BBC