2025-05-06-Bernstein-中国互联网外卖大战_表面是_实则不然_22页_724kb

China Internet: Food Delivery Competition Between Meituan and JD

The recent tensions between Meituan and JD in the China food delivery market stem from competitive dynamics, not direct conflict. JD's move into food delivery was primarily motivated by:

• Defending Meituan's Instashopping growth: JD sought to counter Meituan's expansion in on-demand e-commerce through its food delivery service.
• Driving user engagement: Leveraging government appliance subsidies to boost app usage and conversions.

Key Observations:

1. Market Response: Both stocks experienced significant sell-offs due to fears of prolonged earnings damage, but analysts argue the market overreacted. The competition narrative has peaked, and both companies are now pivoting toward sustainable unit economics.
2. JD's Strategy:
   • JD initially focused on high-volume, subsidized growth.
   • It is scaling back rider incentives and exploring revenue-sharing with merchants.
   • Analysts expect JD to start charging merchants a take rate, potentially improving profitability.
3. Meituan's Position:
   • Its dominance in long-tail dining (mom-and-pop restaurants) provides higher profitability through lower take rates.
   • Short-tail dining (chain restaurants) is less profitable but more price-sensitive.
   • Meituan's extensive merchant network and local ops support its continued growth.

Financial Implications:

• JD: Expected to lose ~RMB3-5 billion monthly on food delivery (RMB36 billion annualized). However, its app engagement (DAU growth and session increases) is strong, supporting broader e-commerce GMV growth.
• Meituan: Food delivery order losses may impact volumes but less severely on profits, as short-tail orders are more profitable. Despite high loss expectations, its diversified business (In-store, Hotel & Travel) and strong merchant network offset risks.

Valuation & Investment Outlook:

• JD: P/E of ~10x in 2026, with upside if it monetizes its delivery business.
• Meituan: P/E of ~18x in 2026. Despite recent de-rating, risk-reward is positive due to improving unit economics and competitive dynamics.

Conclusion:

Both companies face near-term challenges, but analysts view the food delivery war as a strategic competition to gain e-commerce share and user engagement. Future profitability depends on monetization efforts:

• JD: Needs to balance growth and losses.
• Meituan: Maintains strengths in long-tail dining but must manage order volume impacts.