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Meituan’s Revenue in Line with Estimates Amid Sluggish Consumption and Rising Competition

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Meituan, China’s largest food delivery company, posted fourth-quarter revenue that met analysts’ expectations, despite the ongoing sluggishness in Chinese consumption. The company reported revenue of 88.5 billion yuan ($12.21 billion) for the three months ending December, just above analysts’ forecast of 87.7 billion yuan, according to LSEG data.

For the full year, Meituan’s revenue reached 337.59 billion yuan, a significant increase from 276.75 billion yuan in 2023. Its net profit surged to 35.81 billion yuan, up from 13.86 billion yuan the previous year, signaling robust growth despite broader economic challenges.

The company highlighted its strategic focus on expanding investments in cutting-edge technologies, including artificial intelligence, unmanned aerial delivery, and autonomous delivery vehicles. These initiatives are aimed at strengthening its position in the highly competitive food delivery market.

Meituan has benefited from an increased focus on low-cost and discounted products, catering to price-conscious shoppers. However, competition in the sector is heating up, particularly with e-commerce giant JD.com entering the food delivery space in February. JD.com announced it would provide full-time delivery riders with social insurance and housing fund contributions under China’s social security system, prompting Meituan to follow suit. Meituan plans to extend similar benefits to its full-time and stable part-time riders starting in the second quarter of 2025.

“As the industry leader, we are also dedicated to fulfilling our social responsibilities by creating employment opportunities and improving courier welfare,” Meituan stated in its earnings report.

PDD Holdings Faces Revenue Miss Amid China Competition and Global Uncertainty

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PDD Holdings, the parent company of Pinduoduo and Temu, reported lower-than-expected quarterly revenue on Thursday, reflecting weak consumer demand in China despite deep discounts and government efforts to boost spending. The company generated 110.61 billion yuan ($15.3 billion) in revenue for the quarter ending December 31, missing analysts’ estimates of 115.38 billion yuan. However, it exceeded profit expectations with an adjusted earnings per share of 20.15 yuan, aided by higher investment income and favorable currency exchange rates.

Despite aggressive pricing, PDD faces intense domestic competition from Alibaba and JD.com, both of which recently posted better-than-expected earnings. Analysts suggest that Alibaba’s focus on merchant retention and JD.com’s strength in electronics—bolstered by government subsidies—have given them an edge over PDD.

Internationally, PDD’s Temu platform continues to gain traction, attracting budget-conscious shoppers in markets like the U.S. and Europe. However, it faces uncertainty due to potential changes in the U.S. de minimis policy, which currently exempts imported items under $800 from tariffs. A policy shift could impact Temu’s low-cost advantage.

Co-CEO Chen Lei acknowledged the growing challenges posed by competition and regulatory shifts, stating that PDD is exploring new business models and localized supply chain innovations to adapt. Despite these concerns, U.S.-listed shares of PDD rose 2% in early trading.

JD.com Surpasses Revenue Estimates with Robust Demand and Government Stimulus Boost

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JD.com, China’s e-commerce giant, posted its strongest revenue growth in 11 quarters on Thursday, beating market expectations for the fourth quarter. The company’s success was driven by a combination of deep discounts, government subsidies, and a strong holiday shopping season, resulting in a 13.4% year-over-year revenue increase. JD.com reported total revenue of 346.99 billion yuan ($47.91 billion), surpassing analysts’ expectations of 332.35 billion yuan, according to data from LSEG.

Shares of JD.com rose over 5% in early trading following the positive earnings report. The company’s performance reflects the competitive nature of China’s e-commerce market, with major players like JD.com and Alibaba slashing prices to attract customers. Furthermore, the Chinese government’s fiscal stimulus efforts, which include incentives for consumer goods trade-ins, have helped boost domestic consumption.

JD.com, a significant retailer of home appliances in China, is optimistic about future consumption trends, forecasting a rebound in demand and an improvement in customer experience driven by AI. CEO Sandy Xu highlighted that the company expects stronger growth in 2024, aided by the government’s fiscal policies and technological advancements.

In addition to its e-commerce dominance, JD.com is diversifying its business. The company announced its entry into the food delivery market in February, leveraging its extensive warehousing and logistics infrastructure to expand its offerings. Analyst Vinci Zhang sees this as a natural extension of JD.com’s capabilities.

For the October-December quarter, JD.com reported net income attributable to its ordinary shareholders of 9.9 billion yuan, a significant increase from 3.4 billion yuan during the same period last year.