Meituan publicly urges Alibaba to end price war
Food delivery giant Meituan is calling for regulatory intervention.
On July 16, tech media LatePost published an interview with Wang Puzhong, head of Meituan’s food delivery unit.
- Wang is spearheading Meituan’s campaign to preserve market share amidst China’s brutal food delivery price war.
Some context: In February, e-commerce giant JD launched its food delivery platform, challenging both Meituan and Alibaba’s food delivery unit, Ele.me.
- The three companies got into a bloody scrap, offering generous discounts to attract new customers and win market share.
More context: JD has since fallen by the wayside, unable to compete with China’s food delivery giants – but Meituan and Alibaba remain locked in a ruthless price war.
- In May, the market regulator (SAMR) met with food delivery companies and warned them against further price cuts.
Wang’s had enough.
- In the interview, he argues that Meituan and Alibaba’s price war is unsustainable, and market demand will reduce once both companies exhaust funding for subsidies and discounts.
But he also warned Alibaba that Meituan won’t give up.
- Food delivery is Meituan‘s core business, meaning it will put everything on the line to preserve market share.
However, Wang suggested there is an amicable way to end the price war:
- “[One way] to end the war…is that ‘a higher-dimensional force’ intervenes and says, ‘You guys stop fighting now, that's enough.’”
Translation: Regulators need to intervene.
Get smart: This is a PR win for Meituan.
- The company has positioned itself as the reluctant defender of market share, which could shift regulatory attention onto Alibaba.
Reading recommendation: The full interview is well worth checking out.