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JD.com and Meituan: A Food-Delivery War Waging on Stock Markets

Philip CarterTuesday, Apr 22, 2025 3:24 am ET

14min read

In early 2025, the battle for dominance in China’s food-delivery sector intensified, with JD.com and Meituan trading salvos of aggressive strategies and public accusations. The fallout hit investor confidence: by April, JD’s shares had fallen 3.8% year-to-date, while Meituan’s stock plummeted 15%, reflecting market anxiety over escalating costs, margin pressures, and regulatory risks. This clash isn’t just about market share—it’s a high-stakes gamble with billions at stake.

The Trigger: JD’s Bold Entry into Food Delivery

JD.com, long a powerhouse in e-commerce logistics, launched its food-delivery service, JD Takeaway, in February 2025. Its strategy was audacious: hiring 100,000 full-time delivery riders by mid-2025—doubling its initial target—and offering merchants zero commissions to attract high-end chains like Haidilao and Starbucks. Riders were promised direct labor contracts with benefits (including China’s “five insurances and one housing fund”), a first in the gig economy. By April, JD Takeaway’s daily orders reached 5 million, though this lagged far behind Meituan’s 57 million daily orders.

The move targeted Meituan’s weaknesses: reliance on gig workers with unstable income and high merchant commissions (6–8%). JD’s promise of stability for riders and zero fees for merchants struck a nerve, but it also raised alarms about cost sustainability.

Meituan’s Defensive Stance and Regulatory Risks

Meituan, the sector’s 70%-market-share leader, denied JD’s allegations of blocking riders from working with rivals, calling such claims “fabrications.” It emphasized its commitment to rider flexibility but faced accusations of anti-competitive tactics from JD and regulators. This isn’t new for Meituan: it paid a $533 million antitrust fine in 2021 for abusing dominance.

Analysts warn that Meituan’s historical regulatory baggage complicates its ability to respond aggressively. Its stock price dropped 6% in April 2025—a direct reaction to JD’s hiring blitz—and its YTD loss of 15% underscores investor skepticism about its ability to defend margins.

The Market Landscape: Growth vs. Fragmentation

China’s food-delivery sector is booming, valued at $81.9 billion in 2024 and projected to hit $197.9 billion by 2033. Yet JD’s challenge to Meituan and Alibaba’s Ele.me (which holds most of the remaining 30% share) highlights the sector’s low margins and high operational costs.

JD’s strong buy consensus (53.37% upside potential) reflects optimism about its ability to disrupt the duopoly. Its integration with Dada Group’s logistics network enables 9-minute delivery speeds, a key advantage. However, scaling from 5 million to even 10% of Meituan’s orders would require massive investment—a risky bet in a sector where competitors like ByteDance’s Douyin have already scaled back.

Analysts See Opportunities—and Perils

Morningstar’s Chelsey Tam warns that both companies face margin compression as they ramp up spending. JD’s zero-commission model risks destabilizing merchant relationships, while Meituan’s defensive measures could trigger further regulatory scrutiny.

Yet JD’s P/E ratio of 8.5X—far below the industry average of 20.79X—hints at undervaluation. If it captures even 10% of the market, its revenue could jump by over $5 billion annually. Still, shifting consumer loyalty from Meituan—a decades-old habit—will be no easy feat.

Conclusion: A Battle of Scale, Strategy, and Stakes

The 2025 food-delivery war has already reshaped investor sentiment: JD’s stock gains (48.7% over 12 months) contrast sharply with Meituan’s decline, yet Meituan’s dominance remains unshaken. The outcome hinges on three factors:

Execution: Can JD sustain rider benefits and zero commissions while scaling beyond premium merchants?
Regulation: Will antitrust authorities penalize either firm’s aggressive tactics?
Consumer Loyalty: Will customers switch to JD’s faster, more reliable service—or stay with Meituan’s entrenched ecosystem?

For investors, JD’s Strong Buy rating and growth potential offer upside, but the path to profitability is fraught with risks. Meituan’s valuation, meanwhile, reflects lingering doubts about its ability to defend margins without triggering regulatory backlash.

In the end, this isn’t just a battle for market share—it’s a test of whether innovation and capital can overcome scale and habit. The next few quarters will reveal whether JD’s gamble pays off or becomes a cautionary tale.

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