China’s Meituan Loses $82 Billion in Market Cap Amid Rising Competition, Slowdown in Food Delivery Business

by Ella

Hong Kong-based tech giant Meituan, a leader in China’s food delivery industry, has witnessed a significant downturn in market capitalization, losing a staggering $82 billion since the beginning of 2023. Fears over increasing competition, particularly from Alibaba-owned, and a management warning about a slowdown in Meituan’s main food delivery business have contributed to investor concerns.

LSEG data reveals that Meituan’s market capitalization has plummeted nearly 60%, from HK$1.08 trillion ($138.2 billion) to HK$441.06 billion ($56.4 billion). The stock has seen a substantial 85% decrease from its all-time high of HK$460 (about $58.91) in February 2021 to HK$70.55 on January 9, 2024.


Despite the challenges, Meituan continues to dominate China’s food delivery sector, boasting almost 70% of the market share, according to 2022 data from research firm ChinaIRN. However, heightened competition from, known for its aggressive approach and coupon strategies, has posed a significant threat.


Feifei Shen, director at The Blueshirt Group and a food delivery user in China, noted, “Usually, I feel I can get cheaper prices for my orders on Only when I don’t have a coupon, I will think about Meituan.”


Alibaba’s local services segment, including food delivery, reported a 16% revenue increase for the quarter ending September 30. The growth was attributed to strong performances by and Alibaba’s mobility business Amap. Speculations about a potential acquisition of by ByteDance-owned Douyin further impacted Meituan’s shares.


Hong Kong-based Blue Lotus Research Institute linked the decline in Meituan’s shares to reports of ByteDance’s interest in acquiring While ByteDance reportedly denied such discussions with Alibaba, the collaboration between and Douyin in August 2022 added complexity to the competitive landscape.

Meituan faced additional challenges as it warned of a slowdown in its food delivery business in the fourth quarter of 2023. Factors such as the macro environment and warm weather were cited as influences affecting delivery volumes, leading to a 12% drop in Meituan’s Hong Kong-listed shares, marking their lowest since March 2020.

Despite these setbacks, analysts remain cautiously optimistic about Meituan’s outlook. The average rating is a “buy,” with a price target of HK$149.34, according to FactSet data. Fitch Ratings revised Meituan’s outlook to positive, citing strong cash flow generation in 9M23 and improved profitability.

However, uncertainty persists, especially concerning competition from Douyin, potentially impacting Meituan’s profitability in the next 6-12 months. While experts express bearish sentiments about ByteDance’s acquisition of, analysts still favor Meituan as the market leader, emphasizing its strong market position and commitment to food delivery success.



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