Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
S&P: Cutthroat Rivalry among 3 CN Key Food Delivery Platforms Dents Margins; Recovery Unlikely in Next 12-24 Mths
Recommend 45 Positive 87 Negative 44 |
||||
|
||||
|
S&P Global Ratings stated that the fierce competition among China's three major food delivery platforms, MEITUAN-W (03690.HK), JD-SW (09618.HK), and BABA-W (09988.HK), in the on-demand delivery sector will shore up costs and compress profit margins. According to the report titled “Retail Brief: Revolution Or 'Involution' In China's On-Demand Delivery Space?”, these platforms may invest at least RMB160 billion over the next 12-18 months in promotional activities, including free freshly made beverages, to capture or defend their market share in food delivery and instant retail. S&P Global Ratings analyst Jay Lau stated that China's major platforms are fueling the growth of the on-demand delivery market to capture cross-selling opportunities. The agency noted that cut-throat competition is prompting the government to revise the definition of unfair pricing practices and to warn that it will monitor any exploitative behavior towards merchants, as some discounts may be borne by the merchants. In wake of the ongoing market share battle, profit margins are unlikely to recover in the next 12-24 months. S&P slashed MEITUAN-W's EBITDA margin forecast for 2025 from the original 14.1% to 4.8%; and reduced JD-SW's EBITDA margin forecast for 2025 from the original 4.7% to 3.4%. S&P also lowered BABA-W's EBITDA margin forecast for the fiscal year ending March 2026 from the original 20.3% (adjusted in July 2025) to 18.6%. AASTOCKS Financial News Website: www.aastocks.com |
||||
Copied to Clipboard
 |
||||
