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5d ago

Chinese Regulators Address Delivery Sector's Escalating Competition

Alibaba, JD.com, and Meituan summoned to ensure compliance as subsidy war reshapes retail and food delivery markets.

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The Alibaba logo is seen in this illustration taken on January 29, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
JD.COM logo is seen in this illustration taken, February 11, 2025. REUTERS/Dado Ruvic/Illustration
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Overview

  • Alibaba and JD.com have each committed 10 billion yuan to subsidize 30–60 minute delivery services, intensifying competition in China's instant retail and food delivery markets.
  • JD.com reported Q1 revenue of 301.08 billion yuan, exceeding expectations, with food delivery orders reaching 20 million daily, a significant rise since February.
  • Regulators, led by the State Administration for Market Regulation (SAMR), called in Alibaba, JD.com, and Meituan to address concerns over fair competition and consumer protection.
  • The subsidy-driven rivalry has seen deep discounts on platforms like JD Takeaway and Taobao's instant shopping portal, benefiting cost-conscious consumers.
  • Despite low margins, Alibaba, JD.com, and Meituan leverage substantial cash reserves and existing delivery networks to sustain their aggressive market expansion.