China's tech rebound driven by AI momentum has been interrupted by an intense food-delivery price war among Alibaba, JD.com and Meituan. The competition produced extremely low consumer prices—bubble tea and lattes for about 1 yuan and deliveries under 30 minutes—and pushed companies to expand fast-delivery into categories like flowers, medications and toiletries. JD.com's February entry escalated subsidies, prompting Meituan and Alibaba to deepen discounts. The subsidy battle has eroded profits, rattled investors, led Meituan to warn of quarterly losses, halved JD.com's recent quarterly profit, and prompted regulators to summon the trio over excessive competition.
The intense rivalry among the three tech giants has showered Chinese consumers with dirt-cheap indulgences - bubble tea and lattes for as little as 1 Chinese yuan, or $0.14, and meals dropped at their door in under 30 minutes. It's not just food. As growth in China's traditional e-commerce slows, companies are racing into the new fast-delivery segment. "It can be flowers, it can be medications, it can be toiletries," Jason Yu, the managing director for Greater China at consumer insights company Kantar Worldpanel, told Business Insider.
JD.com's official push into food delivery in February triggered the latest escalation, forcing Meituan and Alibaba to respond with deeper subsidies. The three platforms have poured big money into discounts, eroding profits and rattling investors. On Thursday, Meituan - which controls about half of China's food delivery market - warned of losses this quarter due to "irrational competition," sending its shares plunging as much as 13% in one day. The stock is down 33% so far this year.
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