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<Research>CICC: JD-SW Faces More Acute Challenges in Food Delivery Success; For MEITUAN-W, Mkt Urged to Focus on Ecosystem Balance over Competitive Pressure
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CICC’s report highlighted an escalating trend of the competition between JD-SW (09618.HK) and MEITUAN-W (03690.HK) last week. For their food delivery segment, the broker believed that it will be more difficult for JD to succeed. Speaking of JD, the broker pointed out that there are “three accounts” of investment. The first is the pure food delivery business, which is difficult to establish logically; the second is to cope with competition in the instant retail field, but the broker assumed that the starting point of the strategy is best based on the objective laws of the industry and its own endowments, rather than making first-rate thinking based on competition; the third is JD as a whole. In 2024, JD's marketing expenses whopped as much as RMB48 billion. If styles like "quality takeaway" and "social responsibility" can brew, there is hope to generalize the concept of "quality" and further promote the company as a whole and save marketing investment, which is the biggest business lever, in the broker’s opinion. For Meituan, CICC believed that there is no need to pay too much attention to competitive pressure on the company. What the market really needs to focus on the company is the balance of the entire ecosystem. The complexity of the food delivery ecosystem lies in the fact that, on the one hand, merchants bear the relatively high commission pressure under the high efficiency of the platform, and on the other hand, they also enjoy the results of the increased market scale and the further optimization of efficiency after the order density increases. Theoretically, further tilting resources toward the C-end will bring about the overall optimal solution, but the cost is equivalent to some high-profit merchants subsidizing some food delivery people. The theoretical optimal solution does not exist under the current state of public opinion and supervision, and requires companies to strike a more intelligent balance. AAStocks Financial News |
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