By Sherry Qin

Shares of Chinese bubble-tea brands advanced as food-delivery platforms have stepped up discounts in a scramble to capture users, boosting tea beverage sales.

Sichuan Baicha Baidao Industrial rose as much as 15% on Monday morning in Hong Kong before paring gains to 7.3%. Guming Holdings and Mixue Group were up 7.5% and 3.0%, respectively. Hong Kong's benchmark Hang Seng Index was last down 0.45%.

After tech giant JD.com entered the food-delivery business in February, it has made aggressive moves to take on established market leaders such as Alibaba's Ele.me and Meituan, including a plan to hire 100,000 full-time riders to expand the new business.

Subsequently, Ele.me rolled out a 10 billion yuan, equivalent to $1.40 billion, subsidy program in April to compete with Meituan and JD.com.

Competition among Chinese food-delivery services was ratcheted up over the weekend as platforms engaged in a renewed round of offers and vouchers for users.

Buyers scored offers for beverages for less than 2 yuan, or even for free by stacking vouchers, with some dubbing the delivery giants' turf war as "the sweetest business war in history" on social media. Pictures of delivery men swamping tea stores and buyers placing more than 10 orders a day flooded Chinese social media over the weekend.

After handing out vouchers aggressively, China's largest food-delivery platform, Meituan, said order volumes exceeded the company's historical peak and crashed the system temporarily around 6 p.m. on Saturday, according to a post on Weibo.

Freshly made beverage companies stand to benefit the most from the intense price competition among Chinese food-delivery platforms, Daiwa analysts said in a recent note.

Daiwa estimated that 30%-50% of recent subsidies are targeted at freshly made tea beverages due to their low average selling price and high purchase frequency.

The intensity of competition between existing market leaders and newcomers have risen to a new level, Goldman Sachs analysts said in a recent research note.

"We believe the duration of investments this time will extend for longer--given all of the companies are shifting focus to become China's 'everyday app' for transactions across goods and services," the Goldman Sachs analysts said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

July 06, 2025 23:30 ET (03:30 GMT)

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