JPMorgan Chase's latest warning: Competition intensity in China's food delivery market exceeds expectations, with three giants facing divergent fates!

On August 18, JPMorgan Chase stated in its latest research report that JD.com's Q2 food delivery investment losses reached 13 billion yuan, exceeding JPMorgan Chase's expectation of 10 billion yuan. Based on this data, JPMorgan Chase significantly raised Alibaba's Q3 food delivery loss expectations to over 30 billion yuan, far exceeding the previous forecast of 17 billion yuan.

JPMorgan Chase reminded in its research report that the market should closely monitor the upcoming Q2 and Q3 2025 earnings reports of Alibaba and MEITUAN, particularly paying attention to downside risks to their profitability.

The report indicated that JD.com may be the first to exit the price war in Q3 due to financial pressure, while Alibaba may continue investing in food delivery business based on strategic considerations, and MEITUAN as the industry leader will face the most severe long-term challenges.

JD.com's Earnings Reveal Industry Competition Exceeds Expectations

According to previous coverage, JD.com's new business segment revenue surged 198.8% year-over-year in Q2, primarily driven by JD.com's food delivery service. However, the segment's operating losses dramatically expanded from 700 million yuan in the same period last year to 14.8 billion yuan.

JPMorgan Chase stated that from JD.com's Q2 2025 earnings report, it's clear that the competition and investment intensity in China's food delivery market far exceeds JPMorgan Chase's initial expectations.

Data shows that JPMorgan Chase previously predicted JD.com's Q2 2025 food delivery investment losses at 10 billion yuan, but actual earnings showed losses of 13 billion yuan for the quarter, exceeding expectations by 30%.

JPMorgan Chase analysts believe that JD.com's Q2 performance can serve as an important reference indicator for Alibaba and MEITUAN. According to JPMorgan Chase's calculations:

JD.com's Q2 2025 loss per order was approximately 10 yuan. Even if Alibaba's loss per order is only half of JD.com's, assuming an average daily order volume of 70 million orders (70% of weekend peak order volume), Alibaba's Q3 2025 losses from food delivery could exceed 30 billion yuan, significantly higher than JPMorgan Chase's previous forecast of 17 billion yuan.

According to JPMorgan Chase's projections, the financial impact of food delivery and instant retail investments from Q2 to Q4 2025 will be:

JD.com: 13.5 billion yuan, 14.4 billion yuan, 9.45 billion yuan Alibaba: 5.6 billion yuan, 16.9 billion yuan, 16.1 billion yuan MEITUAN: 2.7 billion yuan, 5.7 billion yuan, 3.7 billion yuan

JPMorgan Chase stated that in terms of corresponding per-order losses, JD.com is expected to be 8 yuan and Alibaba 1.87 yuan. Investors should closely monitor the upcoming Q2 and Q3 2025 earnings reports of Alibaba and MEITUAN, particularly paying attention to downside risks to their profitability.

JD.com May "Raise the White Flag" First, Alibaba Prepares for "Prolonged War", MEITUAN Faces Challenges

Facing massive losses from high-intensity competition, JPMorgan Chase believes JD.com may retreat first. Channel research shows that after recently announcing a shift toward rational competition, price subsidies from Alibaba and MEITUAN have only declined slightly, rather than significantly decreasing.

Considering competitors' more aggressive price subsidy strategies and greater financial flexibility, JPMorgan Chase expects JD.com may be the first to cancel price subsidies in Q3 2025.

Currently, JPMorgan Chase's forecast for JD.com's Q4 2025 adjusted earnings per share is 122% higher than market consensus, with potential for further upward revision.

JPMorgan Chase stated that in stark contrast to JD.com, Alibaba is clearly prepared to fight a prolonged war. According to media reports, since increasing investments in food delivery and instant retail, Taobao's daily active users, user engagement, and offline transaction volume of Taobao merchants have all shown growth or improvement.

JPMorgan Chase believes Alibaba may continue investing in food delivery business and exploring instant retail opportunities in the coming years. This means the food delivery market share structure is unlikely to return to 2024 levels, and the industry competitive landscape will undergo fundamental changes.

As the traditional dominant player in the food delivery market, MEITUAN faces the most severe challenges. JPMorgan Chase pointed out that changes in market share structure pose significant challenges to MEITUAN, as historically MEITUAN captured the vast majority or even 100% of industry profits.

More concerning is that long-term investments in this industry may change consumer behavior and reduce industry average order value and GMV, which would be detrimental to the entire industry's profit pool. JPMorgan Chase warned that if both the industry profit pool and MEITUAN's market share decline, MEITUAN's stock price will face sustained pressure.