JD.com vs. Meituan: A Costly Battle for Dominance Shakes China’s Internet Giants, Wiping Out $70 Billion in Market Value

JD.com and Meituan, two of China’s largest internet giants, are engaged in a costly and escalating battle that has severely impacted their market values, resulting in a combined loss of approximately $70 billion. This intense rivalry centers on JD.com's aggressive push into the food delivery market, traditionally dominated by Meituan, while Meituan simultaneously expands into JD.com's core e-commerce territory.

 

The Costly Food Delivery Battle

JD.com entered the food delivery market in early 2025, aiming to challenge Meituan's dominant position, which commands about two-thirds of China's food delivery market. To gain ground, JD.com has heavily invested in subsidies, incentives for delivery riders, and discounts for consumers. It announced plans to hire 100,000 full-time delivery riders within three months and offered zero commission for restaurants joining its platform by the end of April. Despite these efforts, JD.com’s daily order volume remains significantly behind Meituan’s, with 5 million orders compared to Meituan’s 57 million as of mid-April 2025.

 

This aggressive competition has led to a sharp decline in the share prices of both companies. Since March 2025, JD.com and Meituan shares have dropped about 30%, contributing to a combined market capitalization loss of around $70 billion. Investors are concerned that the high spending on subsidies and rider recruitment will hurt profitability for both firms in the near term.

 

Meituan's Strategic Response and Expansion

While defending its leadership in food delivery, Meituan has been expanding its business beyond traditional food delivery. The company is accelerating its global expansion, particularly in grocery retail and international markets such as Saudi Arabia and other Gulf Cooperation Council countries. Meituan’s overseas food delivery platform, Keeta, has rapidly grown in Saudi Arabia, capturing about 10% of the market and reshaping local competition. Moreover, Meituan is investing heavily in artificial intelligence to build an integrated local commerce ecosystem and improve operational efficiency.

 

Meituan has also broadened its offerings to include household essentials and quick commerce services, directly encroaching on JD.com's e-commerce domain. This overlap has intensified the competitive friction between the two companies, turning their rivalry into a broader battle for dominance in both food delivery and e-commerce sectors.

 

Impact and Industry Dynamics

The rivalry has led to increased operational costs, including commitments by both companies to enroll full-time delivery workers in China’s social security system, further squeezing margins. The competition also involves disputes over delivery riders’ freedom to work across platforms, with JD.com accusing Meituan of restricting couriers, a claim Meituan denies.

 

Analysts warn that the ongoing conflict will likely limit profit potential for both companies throughout 2025. The industry’s low order values and slim margins favor the incumbent leader, Meituan, making it difficult for JD.com to establish a profitable foothold despite substantial subsidies. Meanwhile, Meituan faces competition not only from JD.com but also from Alibaba’s Ele.me and ByteDance’s Douyin, alongside regulatory scrutiny over its market dominance.

 

The costly battle between JD.com and Meituan is a significant example of how fierce domestic competition in China’s internet sector can inflict greater damage on companies than international trade tensions. Both firms are investing heavily to defend and expand their market positions, but this has come at the expense of shareholder value and near-term profitability. As Meituan pushes into e-commerce and international markets, and JD.com doubles down on food delivery, the rivalry is set to continue shaping the competitive landscape of China’s digital economy in 2025 and beyond.