Shares of major Chinese food delivery companies soared Wednesday following calls from state media and regulators to halt destructive pricing competition. The government warned that ongoing price wars are hurting market recovery and creating unsustainable business losses.
Major Chinese food delivery companies saw their stock prices climb sharply Wednesday after government officials and state-controlled media urged an end to damaging price competition in the sector.
Meituan, a leading delivery platform traded in Hong Kong, experienced the biggest gains with shares jumping as much as 12.6% to reach HK$89 during afternoon trading sessions. Competitors Alibaba and JD.com also posted strong performances, with both companies seeing increases of more than 3%.
The market rally came after Economic Daily, a state-run publication, released a commentary piece Wednesday demanding that food delivery companies stop their destructive pricing battles. The State Administration for Market Regulation later shared the article on its official website, signaling government support for the position.
According to the published report, the ongoing competition has created harmful market conditions. “The entire industry has fallen into a vicious cycle of losing money in an attempt to grab market share, ultimately dragging down the broader trend of consumption recovery,” the report said.
The government intervention suggests Chinese authorities are concerned about the financial sustainability of the delivery sector and its impact on economic recovery efforts.
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