中国互联网-外卖平台承诺支持反内卷-China Internet and Other Services-Food Delivery Platforms Vow to Support Anti-Involution

Summary of Key Points from the Conference Call Industry Overview - Industry: Food Delivery Platforms in China - Key Players: Alibaba (BABA), Meituan, JD.com (JD) Core Insights - Curbing Competition: The three major food delivery platforms have committed to reducing "disorderly competition" and will stop price-based rivalries, including 'zero-cost purchases' and allowing merchants to independently engage in promotional activities [1][2][3] - Regulatory Influence: This decision follows meetings with the State Administration for Market Regulation (SAMR) and Shanghai market regulators, indicating a peak in competitive intensity expected in Q3 2025, with caution advised for the competitive landscape thereafter [2][3] Financial Performance and Stock Recommendations - Stock Preferences: Analysts prefer Alibaba (BABA) over Meituan and JD.com. They believe that near-term earnings pressure for Alibaba is already reflected in its stock price, while the market undervalues its potential as a leading AI enabler in China [3] - Valuation Metrics: - Alibaba is trading at 12x F27e - Meituan is trading at 19x F26e - JD.com is expected to face higher revenue comparisons starting September 2025 and is projected to remain a minor player in food delivery and quick commerce long-term [3] Competitive Landscape - Subsidy Programs: - JD announced a RMB10 billion subsidy program for its food delivery business [4] - Meituan pledged a RMB100 billion investment in demand delivery over three years [4] - Alibaba initiated a RMB50 billion subsidy program [4] - Order Growth: - JD's daily food delivery orders grew rapidly, reaching 25 million by June 2025 and 150 million by July 2025 [4] - Ele.me (Alibaba's service) also saw significant growth, surpassing 60 million daily orders by June 2025 [4] Market Dynamics - Expected Subsidies: Total subsidies are projected to be RMB30 billion and RMB50 billion in Q2 and Q3 2025, respectively, marking a peak in investment [5][8] - Profitability Outlook: Long-term profitability for Meituan has been revised downwards, with food delivery gross transaction value (GTV) margins expected to be below 3% and Instashopping below 2% [8] Risks and Considerations - Market Risks: - Potential for irrational competition to return in e-commerce - Weaker-than-expected macroeconomic conditions and antitrust regulations could impact profitability [13][15] - Growth Opportunities: - Faster-than-expected margin expansion and successful penetration in lower-tier cities could drive user growth [14] Conclusion - The food delivery industry in China is undergoing significant changes due to regulatory pressures and competitive dynamics. Analysts remain cautious but see potential in leading players like Alibaba, while also highlighting the risks associated with ongoing competition and market conditions.