JD.com, Meituan shares drop due to competition in food delivery

Shares of JD.com and Meituan fell sharply on April 22, 2025 signaling investor concerns over profitability in China’s food delivery sector.

JD.com shares dropped by 8.1% in Hong Kong, while Meituan’s stock fell by 8%, reaching a seven-month low.

The entry of JD.com into the food delivery market has intensified competition with Meituan, triggering price cuts and increased incentives for delivery workers.

Both companies are facing rising costs as they hire full-time couriers in China’s social security system.

This fierce rivalry has contributed to a 25% drop in the stocks of both companies since March 2025.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ China’s food delivery consolidation reveals platform economics’ brutal reality

China’s food delivery market has consolidated to just a few players after years of fierce competition, demonstrating the winner-take-most dynamics of platform businesses.

Previous challengers like ByteDance’s Douyin scaled back food delivery ambitions in 2023 after attempting to compete with Meituan 1, highlighting the difficulty new entrants face even with large user bases.

The sector is characterized by heavy cash burn as companies offer subsidies to attract users, with Meituan previously reporting losses of RMB 19 billion ($2.9 billion) in a single year 2.

Market economics strongly favor the incumbent, with Meituan commanding approximately two-thirds market share and processing 57 million daily orders compared to JD.com’s 5 million 3.

Low order values and thin margins make profitability particularly challenging for sub-scale players, as noted by analyst Vey-Sern Ling, who observed that “industry dynamics work in the market leader’s favor” 4.

2️⃣ Divergent strategies emerge as domestic market saturates

As China’s food delivery market matures, leading platforms are adopting distinctly different strategies with Meituan focusing on international expansion while JD.com leverages its e-commerce strengths.

Meituan has successfully expanded to Hong Kong with its Keeta app and entered Saudi Arabia in September 2023, achieving one million weekly active users in the Saudi market 5.