JD.com (JD) Stock: Investors Bail as Delivery War Threatens Profits

TLDR:

JD.com and Meituan shares dropped 8.1% and 8% respectively on April 22, 2025 JD.com plans to hire 100,000 full-time food delivery riders over the next three months Competition has intensified since JD.com entered the food delivery market in February 2025 Both companies face rising costs from hiring full-time couriers in China’s social security system The stocks of both companies have fallen about 25% since March 2025

JD.com (JD) and Meituan shares plunged on Tuesday as the battle for China’s food-delivery market heats up. JD.com fell 8.1% in Hong Kong trading, while Meituan dropped 8% to hit a seven-month low.

The sell-off comes as investors worry about shrinking profit margins and short-term earnings. Both stocks have taken a beating in recent weeks, with JD.com down 3.8% year-to-date and Meituan falling 15%.

JD.com, Inc. (JD)

The tension between these retail giants became public this week. JD.com announced plans to hire 100,000 full-time riders within three months to grow its new food-delivery business.

In the same announcement, JD.com claimed that a competitor had told delivery riders they must choose between platforms. This implied that workers couldn’t deliver for both JD.com and the unnamed competitor.

Meituan responded quickly on Monday with a WeChat post. They denied stopping couriers from working with other platforms.

Market Dynamics Shifting

JD.com, mainly known for e-commerce, jumped into food delivery in February 2025. This move is part of their strategy to grab market share in this growing sector.

The newcomer has made quick progress. JD.com reported reaching 5 million daily orders by April 15, according to their WeChat account.

Yet they still trail far behind market leader Meituan. Nomura analysts estimate Meituan handles about 57 million orders daily.

Meituan already faces tough competition from Alibaba’s Ele.me and ByteDance’s Douyin. In 2021, China’s antitrust regulator fined Meituan over $533 million for abusing its market position.

The entry of JD.com has only made the competitive landscape tougher. This has led to price cuts and better incentives for delivery workers across platforms.

Rising Costs and Investor Concerns

The hiring of full-time couriers by both companies is raising costs. These workers must be registered in China’s social security system, which adds to operating expenses.

Investors fear that this heated competition will force both companies to spend more. This could hurt their bottom lines and brand images.

Chelsey Tam, a Morningstar analyst, points out the market perception: “There can be a perception that JD.com is willing to spend more in competition…Meituan will need to spend more to defend itself.”

This battle has taken a toll on both companies’ stock prices. Since March 2025, both JD.com and Meituan have seen their shares drop by about 25%.

The fight shows no signs of cooling down. JD.com seems determined to challenge Meituan’s dominance in food delivery, while Meituan appears ready to defend its turf.

Trading volumes have increased for both stocks as investors react to the intensifying rivalry. Some market analysts suggest the sell-off might be overblown, while others warn of continued pressure on profit margins.

Neither company has released official statements about how this competition will affect their earnings forecasts. Investors are watching closely for any updates in the coming weeks.

For now, the battle continues as both companies try to win over hungry Chinese consumers. The next quarterly earnings reports will likely reveal more about how this food-delivery war is affecting their financial health.

JD.com is showing it’s willing to play the long game in food delivery. Whether this gamble pays off remains to be seen.

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