JD.com’s delivery clash with Meituan may worsen $70 billion rout
Although most of the world are focused on an unstable international trading war, two of China’s largest internet companies have more damage to each other at home.
Jd.com Inc. launched an expensive struggle to steal the market share by food delivery from Meituan, while the latter is encroached for the strengthening of previous e-commerce. The shares of the companies’ Hong Kong each decreased by about 30%, collecting about $ 70 billion in a combined market value.
Investors are closing for a long struggle that will hurt earnings for a couple. Analysts have reduced prices for both stocks and defense positions have spread to the options market.
“Both sides are worse, and it is unclear how long this battle will last,” he said.
Since Donald Trump’s tariffs have steamed from the recent Chinese technological rally, the impact of this internal competition stands out. Meituan and JD.com are among the worst eight Hang Seng Technology Index, both in the first half of 2024.
The switch came because JD.com installed a cash combustion strategy to promote his JD Takeaway food platform that officially kicked off in February. Beijing-based company has recorded more than $ 1.4 billion offers for consumers, pours commissions and goals for some merchantshire100,000 full-time shipping cyclists.
JPMorgan Chase & Co.’s assessments JD.com has taken about 5% of the Chinese food market, which was previously divided for about 75%, and 25% for Alibaba Group for LLC. The Brokerage Service assesses that on the current scale JD Takeaway is up to 18 billion yuan ($ 2.5 billion), 36% of its parental profit of 2025.
“We do not think this is a stable strategy due to financial influence on P & L,” Analyst Alex Yao wrote in the book on Tuesday. “For the new applicant, it is worth blocking the significant share of the market through a deep subsidized growth strategy in the Chinese food market.”
Meituan previously successfully conveyed the food delivery competition, but JD.com is viewed as a terrible challenge, taking into account its existing delivery network. At the same time, Meituan has done inner work in the main fast trade field of JD.com, computer and electronics products.
While both firms are heavily dependent on Chinese consumption, Meituan spendsaggressivelyAbroad on the expansion of food delivery through its Keeta app.
“JD does not have many opportunities to grow in China, and has very little impact abroad,” said Felix Wang. In this context, his expensive JD Takeaway foray is more a protective step and “entirely about food delivery.”
Sales analysts have become more cautious because the shootout pulls. Although the two shares are dominated by the average price of Meituan, the target of Meituan descends at 8%, and JD.com has fallen about 4%.
Expenses for declining falls in two shares remain above their one year. For JD.COM, the ratio of junk coal options has increased to its high level, classifying the most negative deviated Hong Kong reserves.
This story was originally shown Fortune.com
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