China cracks down on “ghost kitchens,” requiring real names, no-dine-in labels for delivery apps

CHINA – China’s market regulator has fired a warning shot across the bow of the online food delivery industry, issuing sweeping new rules that take effect on June 1.

The State Administration for Market Regulation now requires all food businesses on delivery platforms to use the same name online as appears on their physical shopfronts.

They must also continuously display their business license, photos of their actual premises, and a verifiable operating address that matches their official permit.

Ghost Kitchens Must Come Out of the Shadows

In a move targeting the controversial “ghost kitchen” phenomenon, facilities producing meals exclusively for delivery with no dine-in space, the rules introduce a mandatory “no dine-in” label on merchants’ main pages.”

The key to reassuring consumers lies in ensuring that ‘what you order is what you get,'” said Sun Huichuan, SAMR food safety director.

No More Cutting Corners

The regulations ban food processing outside approved preparation areas and forbid outsourcing production to third parties, steps designed to close loopholes that allowed vendors to operate informally.

The SAMR estimates China’s food delivery market has surpassed 1.4 trillion yuan (approx. US$194 billion), accounting for about 24% of catering industry revenue, making oversight critical.

Platforms Can’t Just Collect Fees Without Responsibility

SAMR officials warned that delivery platforms cannot simply collect commissions without taking responsibility.

Platforms now must conduct on-site inspections to verify merchants’ credentials and cross-check license information with provincial databases at least every six months.

Heavy Fines for Violators

Violations can result in fines up to 200,000 yuan (approx. US$29,000), with platform executives facing penalties of one to ten times their annual income for intentional violations causing serious consequences.

Antitrust Investigation Adds Pressure

The new transparency rules follow China’s antitrust regulator launching a formal investigation into rivalry among food delivery services earlier this year.

Subsequently, several restaurant operators have raised prices and cut back subsidies, with KFC raising delivery prices and Cotti Coffee dialing back promotions, signs that subsidy-driven price wars may be cooling.

A Cleaner Plate for Consumers

By building a comprehensive information disclosure system, regulators aim to let consumers order with confidence, knowing exactly who’s cooking their meal.

The message is clear: China’s food delivery industry is moving from chaotic growth to accountable, transparent service.

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