In the dynamic realm of the internet industry, a fresh tempest is brewing, this time centered around the cut - throat food delivery market. The latest development has seen Liu Qiangdong of JD.com seemingly taking aim at Wang Xing of Meituan, sparking an all - out war in the food delivery sector.
The Commission Controversy and Its Implications Rumors recently spread across social media platforms that JD Food Delivery had launched with a mere 5% commission rate, prompting Meituan to respond by slashing its own commission rates to counter the threat. Meituan confirmed to the media that the widely - circulated figure of a 30% commission rate for Meituan Food Delivery was inaccurate. In fact, the actual commission rate for Meituan's merchant partners ranges from 6% to 8%. Well - informed sources further revealed that JD's food delivery - related business had already been rolled out in 2024, with the commission it charges either slightly lower than or on par with that of Meituan Food Delivery.
In the highly competitive food delivery landscape, the level of commission can significantly sway the decisions of both merchants and consumers. Meituan has established a formidable market position over the years, boasting a vast user base and an extensive network of merchants. As a result, its commission rates have become somewhat of an industry standard. For JD, as a latecomer to the world of instant retail, offering lower commissions is a strategic move to attract more merchants to its platform. This, in turn, can help JD build up its user base and gain a foothold in the market more quickly.
The ebb and flow of commission rates among different platforms ultimately benefit both merchants and consumers. In theory, merchants may choose to pass on the savings from lower commissions to consumers in the form of more affordable food delivery prices. This not only provides consumers with better value for their money but also gives them a wider range of choices and potentially higher - quality services. Moreover, the entry of a new competitor like JD can also drive the industry forward, pushing it to evolve and reach new heights.
The Booming Instant Retail Market and the Battle for Dominance According to the "White Paper on the Instant Retail Consumer Electronics Industry" jointly released by Meituan Flash and iResearch, the consumer electronics category has witnessed remarkable growth in the instant retail market over the past three years. It is projected that from 2021 to 2026, the average annual compound growth rate will reach a staggering 68.5%. By 2026, the scale of the instant retail consumer electronics industry is expected to exceed 100 billion yuan.
In an era where the internet's growth potential is gradually reaching its peak, the instant retail market, with its promise of a multi - billion - scale opportunity, has become a hotbed for internet giants to seek new sources of growth. Meituan, as the current leader in the instant retail market, now finds itself under siege from competitors such as JD and Douyin. The road ahead for Meituan is bound to be filled with intense competition.
The Expanding Horizons of the Food Delivery Industry and the Rivalries With the increasing demand for instant gratification among consumers, the food delivery industry has transcended its traditional boundaries of just catering. It has now expanded into a wide range of consumption scenarios, encompassing everything from food and fresh produce to pharmaceuticals, 3C electronics, and daily necessities.
For instance, during the Double 11 shopping festival in 2022, Meituan made significant inroads into the 3C electronics sector, which has long been JD's stronghold. In September 2022, when the iPhone 14 was launched, Meituan Flash joined hands with Apple - authorized franchise stores. This collaboration covered over 1,110 stores across more than 200 cities nationwide. Additionally, Meituan also partnered with Suning, adding nearly 3,000 new SKUs in the digital 3C category to its Meituan Flash platform.
In September 2023, Huawei Terminal and Meituan Flash officially entered into a strategic partnership. The following year, in February 2024, Meituan Flash and PISEN reached an agreement. The two parties planned to have 10,000 stores go live on the platform during the first quarter of 2024.
As Meituan continued to cultivate consumers' awareness of purchasing large - scale 3C electronics through its platform, JD began to sense the growing threat. Thus, JD's entry into the food delivery market can be seen as a logical step to safeguard its position and expand its business.
JD's Gradual Infiltration into the Food Delivery Market JD's foray into the food delivery market is not a hasty decision. The company has been steadily building up the necessary infrastructure for this expansion over the years. Its existing strong logistics network serves as a natural advantage. Entering the food delivery market is an extension of its instant delivery capabilities, enabling JD to complete the last - mile delivery and enhance the overall service chain of its e - commerce platform.
More importantly, the traffic generated by the instant retail entrance can be redirected to other business scenarios such as e - commerce and payment services, creating a synergistic effect and potentially unlocking a new growth trajectory.
As early as June 2022, Xin Lijun, then CEO of JD Retail, publicly stated that JD was considering venturing into the food delivery business. The actual implementation would depend on the company's capabilities and its ability to assemble a talented team.
In October 2021, Dada Group and JD Group jointly announced at the JD 11.11 kick - off event that a new "Nearby" channel had been launched on the homepage of the JD App. This channel was aimed at the local lifestyle market, offering hourly or even minute - level delivery of products from all - category stores within a 3 - 5 - kilometer radius. Dada Group was tasked with fully managing this service, known as "Hourly Shopping".
In early 2024, Guo Qing, a former core executive at Meituan, joined JD. Insiders revealed that Guo Qing would take over Dada Group and the robotics business, reporting directly to Xu Ran, CEO of JD Group and JD Retail.
In May 2024, JD integrated and upgraded JD Hourly Delivery and JD Daojia to launch the "JD Instant Delivery" service. In September of the same year, a coffee and milk tea section was added to the "JD Instant Delivery" platform, marking JD's first foray into the food delivery market.
By the end of December 2024, several new channels were added to JD Instant Delivery, including the "Eat, Drink, Play, and Shop" group - buying channel, a food delivery channel, and a hotel and flight booking channel. In the hotel and travel business, JD partnered with Ctrip, leveraging the latter's established service capabilities.
Currently, the group - buying channel on JD Instant Delivery features a variety of offerings such as food and beverages, beauty and medical aesthetics, dentistry, photography and travel shoots, and health check - up packages. In the Beijing area, merchants such as Burger King, Mixue Bingcheng, Shengmeng Beauty, Jinsong Dental,海马体, and Meinian OneHealth have joined the platform.
To strengthen its position in instant retail, on January 27, 2025, JD proposed to privatize Dada Group at a 42% premium, with an estimated value of approximately $520 million. Dada Group, a local instant retail and delivery platform, announced that its board of directors had received a preliminary non - binding acquisition offer from its major shareholder, JD Group, on January 25. JD proposed to purchase the outstanding American Depositary Shares (ADS) of Dada Group at a price of $2.0 per ADS (or $0.5 per ordinary share). Dada's instant delivery capabilities can help JD fill the gap in the instant retail delivery segment, meeting consumers' demand for rapid delivery and enabling JD to more quickly penetrate the local lifestyle service market, especially in sectors such as catering, supermarkets, and convenience stores.
Meituan's Strategic Outlook and Business Expansion Meituan's founder, Wang Xing, has publicly stated that Meituan's strategic vision is clear - to model itself after Amazon and become the "Amazon for Service". In Wang Xing's view, while Amazon and Taobao are both physical e - commerce platforms, Meituan aims to be a leading e - commerce platform for lifestyle services.
Regarding business and competition, Wang Xing believes that the idea of a single dominant player or the end of competition is unrealistic. Instead, he advocates that competition and cooperation should be regarded as the new normal. He also believes that excessive speculation about boundaries and the ultimate outcome is misguided, famously stating, "There is no real end - game."
Meituan has taken a rather composed approach to the influx of various internet players into the local lifestyle service space. It has been both forming alliances and expanding its business boundaries.
For example, on December 17, 2024, Walmart China and Meituan announced a strategic cooperation. The two parties will leverage their respective strengths to engage in in - depth collaboration in areas such as instant delivery, product variety, product operation, digital customer service capabilities, and digital marketing.
In September 2024, Meituan's overseas food delivery app, Keeta, was quietly launched in Saudi Arabia, marking its first international expansion outside of China.
Tech Planet reported that Meituan recently initiated a recruitment program for individual photographers. The first batch of cities offering free registration are Beijing, Shanghai, Hangzhou, Nanjing, and Xi'an. Currently, the program is focused on recruiting portrait photographers. The service scope includes wedding, banquet, and scenic spot photography services. After paying a deposit of 2,000 yuan, photographers can set up shop on the Meituan App and Dianping App without the need for a business license, and can list their group - buying packages. Photographers will provide on - site services.
As Wang Xing aptly put it, the battle for the local lifestyle service market among industry giants like Meituan, JD, and Alibaba continues unabated. The ultimate victor will be the one who can capture a larger share of both users and merchants, thereby securing a more influential position in the future consumer ecosystem.