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<Research>CLSA: Competition Intensifies in CN Food Delivery Mkt; JD-SW (May Post Higher-than-expected Loss in Food Delivery Biz
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As the US-China trade war escalates, Chinese internet companies are launching measures to support export merchants and capture more domestic consumption opportunities, according to CLSA's research report. For example, PDD Holdings (PDD.US), JD-SW (09618.HK) (JD.US) and MEITUAN-W (03690.HK) each announced support programs of more than RMB100 billion over the next 3 years, while BABA-W (09988.HK) (BABA.US)'s Taobao and Tmall launched “Export Select” portal to support export merchants with traffic, commission subsidies and AI business tools. CLSA expected competition in China's food delivery market to intensify, and the share prices of MEITUAN-W and JD-SW may come under pressure when they announce their results, as they are likely to focus more on the development of their food delivery business. Richard Liu, Chairman of JD-SW, recently said that the profit margin of its food delivery business will not exceed 5%. CLSA anticipated that JD-SW's food delivery business may suffer a higher-than-expected loss. AAStocks Financial News |
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