A Meituan executive said the company had no choice but to join the latest round of what he called “irrational competition” against rivals JD.com and Alibaba Group Holding in China’s instant delivery sector, even though the blizzard of discounts being offered to woo buyers had become disconnected from business fundamentals.
“We didn’t want to take part in [the price war], as we don’t think it makes sense,” Wang Puzhong, head of Beijing-based Meituan’s core local commerce business, said in an interview on Tuesday with local media outlet LatePost. Meituan felt it had to join the fight to avoid looking like “the loser”, he was quoted as saying. “We are good at fights, but not belligerent.”
Wang’s comments came after the three major players in the country’s food delivery and instant commerce sector doubled down in a no-holds-barred fight for market share, as the competition expanded from prepared-food delivery to on-demand delivery of groceries, among other items. The battle reached a crescendo over the weekend, with all three companies offering hefty subsidies. Alibaba owns the Post.
Hangzhou-based Alibaba also joined the fray, announcing a 50 billion yuan subsidy programme for consumers and merchants over the next 12 months to boost consumption on its Taobao Shangou service, alongside reported “Super Saturdays” sales over the next 100 days.
Asked about Meituan’s thoughts on its rivals’ subsidy programmes including Alibaba’s pledge, Wang said it was “definitely an irrational competition” that would lead to mounting losses for the competitors.
Alibaba and JD.com did not immediately respond to requests for comment on Thursday.
