**Fierce Battle Between Jingdong and Meituan in China’s Food Delivery Market**
Jingdong Corporation has launched a costly battle in an attempt to seize market share from the food delivery giant Meituan, as Meituan has been gradually encroaching on Jingdong’s position in the e-commerce field. The stock prices of both companies listed in Hong Kong have fallen by approximately 30% from their highs in March, leading to a combined market value loss of about $70 billion.
According to a report by Bloomberg on April 25th, the market competition between Jingdong and Meituan may turn into a protracted battle that will harm the profitability of both companies. Analysts have lowered their target prices for these two companies, and the defensive positions in the options market have also strengthened.
A fund manager from Sun Hung Kai Financial in Hong Kong was quoted in the report saying that the short-term situation for both companies has worsened and the duration of this battle remains uncertain. The intense competition in China’s food delivery market is expected to impact the profitability of the companies.
J.P. Morgan estimates that Jingdong holds about 5% market share in China’s food delivery market, while Meituan previously held about 75% and Alibaba Group’s Ele.me held about 25%. The brokerage firm estimates that based on the current scale, the annualized losses for Jingdong’s food delivery business could reach up to 18 billion Chinese Yuan (approximately $2.5 billion), equivalent to 36% of its parent company’s operating profit in 2025.
On April 21st, the competition between Jingdong and Meituan escalated from a covert battle to a war of words. Jingdong issued an open letter to all food delivery riders, accusing a certain platform of coercing riders to “choose one of two options”, while Meituan quickly countered with rumors, challenging the platform to “fulfill promises instead of spreading false information”.
Jingdong is implementing a cash-burning strategy to promote its Jingdong Food Delivery platform launched in February. The company has announced discounts totaling over $1.4 billion for consumers, waived commissions for some merchants, and plans to recruit 100,000 full-time food delivery riders.
In a report on Tuesday, analyst Alex Yao wrote, “We believe this is not a sustainable strategy as it will have financial implications on the group’s income statement. For a new entrant, using a growth strategy heavily subsidized in the Chinese food delivery market to gain significant market share can be costly.”
For Meituan, Jingdong is seen as a formidable challenger. Meanwhile, Meituan has entered into Jingdong’s core fast-moving consumer goods field this year, including computers and electronics.
As the competition continues, selling analysts are becoming more cautious. Although both stocks have received buy ratings, the average target price for Meituan has fallen by 8% from its peak in March, while Jingdong’s target price has decreased by approximately 4%.