A Meituan (HKG:3690, HKG:83690) executive said the company would compete against rivals JD.com (HKG:9618, HKG:89618) and Alibaba (HKG:9988, HKG:89988) even as it made no business sense, the South China Morning Post reported Thursday.
Wang Puzhong, head of Beijing-based Meituan's core local commerce business, reportedly told a local media outlet the company did not want to take part in a price war but had no choice but to do so to avoid looking like a loser, the SCMP reported.
Wang described rivals' subsidy programs including Alibaba's pledge as "definitely an irrational competition."
Meituan, the dominant player in China's instant delivery market with a 70% market share, is competing against JD.com and Alibaba who have pledged billions of yuan in investments to support food service merchants and stimulate demand.
JD.com recently committed over 10 billion yuan to enhance restaurant offerings and has expanded courier hiring, while Alibaba folded its Ele.me unit into Taobao and unveiled a 50 billion yuan subsidy plan.
Meituan's Chief Executive Wang Xing previously pledged a 100 billion yuan investment.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.