China cracks down on 'ghost kitchens' for delivery apps

China’s crackdown on “ghost kitchens” did not begin with the June 2 social-media chatter. China’s State Administration for Market Regulation, or SAMR, said on April 17 that it fined seven major e-commerce and delivery platforms a combined 3.597 billion yuan for violations tied to “ghost kitchen” cases and food-safety breaches. The companies named by regulators were Pinduoduo, Meituan, JD.com, Ele.me, Douyin, Taobao and Tmall. ### What are Chinese regulators calling a “ghost kitchen”? SAMR and state media described the problem as online food sellers using fake or missing licenses, false addresses or outsourced production that consumers could not see. A Xinhua report carried on SAMR’s website said investigators found some app-listed stores had no real storefronts in the cities where they claimed to operate, while others used forged food-business permits. A March report cited by China News Service said regulators planned rules requiring platforms to verify restaurant identities, licenses and operating addresses to curb those “ghost kitchens.” Industry coverage this week said merchants must also make sure online listings match actual premises and disclose whether they provide dine-in service. (english.samr.gov.cn) ### How did the investigation start? A consumer complaint in Beijing in July 2025 helped trigger the broader case, according to Xinhua’s account on SAMR’s website. (samr.gov.cn) The complaint concerned a birthday cake sold through an online shop that appeared to be a large chain with permits and store photos, but local regulators later found the Beijing outlets had no physical stores and used forged license numbers. The same report said national investigators traced orders from app storefronts to a rudimentary residential building and uncovered third-party order-routing services. (ecns.cn) In one example cited by Xinhua, a consumer paid 252.3 yuan for a cake order that was then resold through an order-transfer platform, with the final producer receiving only 80 yuan before fees. ### Which companies were punished, and for how much? SAMR said the seven platforms were punished for failing to carry out qualification checks and for not taking necessary measures against merchants that harmed consumer rights. (samr.gov.cn) The combined fine was 3.597 billion yuan, or about $524 million to $530 million, according to SAMR’s English-language release and a State Council Information Office summary. Xinhua’s longer reconstruction of the case said investigators uncovered more than 67,000 “ghost shops” and more than 3.6 million improperly subcontracted cake orders. (samr.gov.cn) After the investigation began, SAMR said all seven platforms removed unverified ghost-kitchen vendors and stopped working with the order-routing platforms involved. ### Why did the June 2 posts say the crackdown was happening “now”? June 1 was the key date. (english.samr.gov.cn) A Xinhua commentary reposted by SAMR said new rules on food-safety responsibilities for online catering operators formally took effect on June 1. The commentary said the rules were designed to block poor-quality merchants from joining platforms and to tighten control across the full online-delivery chain. That timing helps explain why the issue resurfaced on June 2 on X and in international coverage. (english.samr.gov.cn) Reports published on June 2 said China was requiring platforms to verify licenses and physical addresses “as of this week,” tying the current discussion to the earlier April penalties and the June 1 implementation date. ### What changes now for delivery apps and merchants? Platforms now face clearer pressure to check that a seller’s license, address and operating details match the real business behind the listing. (samr.gov.cn) Merchants are expected to keep listings aligned with actual premises, while regulators have signaled they will treat outsourced or disguised food production as a food-safety and consumer-protection issue rather than a minor platform violation. (verdictfoodservice.com) June 1 is the operative milestone for enforcement under the new rules, and SAMR has already shown the scale of penalties it is willing to impose. The next public signs of the crackdown are likely to come from platform removals, local enforcement actions and any further SAMR disclosures involving Meituan, Ele.me, JD.com, Pinduoduo, Douyin, Taobao and Tmall. (english.samr.gov.cn) (verdictfoodservice.com)