A bitter war of words has broken out between two Chinese Big Tech food delivery firms, each backed by billionaires who are household names in the country, with the fallout wiping billions of dollars from their market values.
JD.com founder Richard Liu Qiangdong, with a personal net worth of US$6.3 billion, started the rivalry in February by marketing his firm as a better partner than industry leader Meituan, backed by tycoon Wang Xing who is worth US$10 billion, when it came to the treatment of restaurants and gig economy delivery workers.
The fight escalated this week as both companies accused each other of blocking delivery riders from accepting orders from rival platforms. They also blamed each other for unfair treatment of delivery workers. The war of words wiped US$13 billion off the combined market capitalisation of the companies.
The stock plunge was “attributed to investor anxiety over their potentially increasing investments in the food delivery business, which is likely to negatively impact their margins”, said Chelsey Tam, senior equity analyst at Morningstar.
“Firing [off] at each other is inevitable” because JD and Meituan have overlapping businesses, but the spat “quickly enhanced the brand exposure” of JD, said Chen Liteng, an analyst at market consultancy 100ec.cn.
