Meituan, JD.com lose $100b in food delivery battle

Shares of Meituan and JD.com have lost a combined US$100 billion in market value since late 2024.

Both are listed on the Hong Kong Stock Exchange and have declined over 30% since peaking in October 2024.

The drop places them among the worst performers on the Hang Seng Tech Index.

Analysts say the downturn is due to JD.com’s heavy spending to promote its food delivery platform.

There’s also been a shift in investor interest toward companies with strong AI capabilities, boosted by developments from DeepSeek.

Meituan’s stock fell over 5% after its March quarter results but recovered slightly. Still, it’s down nearly 15% for the year as of May 2025.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ China’s massive food delivery market justifies costly competition

The high-stakes battle between Meituan and JD.com reflects the enormous potential of China’s online food delivery market, which was valued at $81.9 billion in 2024 and is projected to grow to $197.9 billion by 2033 (a 9.79% CAGR) 1.

This market serves 592 million users, representing over half (53.4%) of China’s internet population, and employs more than 10 million delivery workers, highlighting its economic significance 2.

Despite the $100 billion market value loss, Meituan’s Q1 2025 results show the underlying business remains strong, with revenue increasing 18% year-on-year to 86.6 billion yuan ($12 billion) and net profit jumping 87.3% to 10.1 billion yuan 3.

CEO Wang Xing’s announcement to invest 100 billion yuan over the next three years signals confidence in the sector’s long-term growth prospects, even as short-term profitability is sacrificed for market share 3.

JD.com’s aggressive expansion strategy, though costly now, targets a market where the winner-take-most dynamics could justify current losses for future dominant positioning.

2️⃣ Regulatory intervention signals government concerns about competition tactics

The Chinese government has recently stepped in to moderate the intensifying food delivery competition, holding regulatory meetings specifically urging platforms to adhere to fair competition practices 2.