In a market dominated by Meituan, China’s number one shopping platform, Meituan, competitors like JD.com are in a wall climbing challenge. To get to the top, they’ve got the raise the bar.
However, recently, JD.com is failing to meet business expectations.
Not too good
Experts are not in high hopes about JD.com’s business performance in the next weeks. While it officially launched JD Takeaway earlier this month, which the Ridesharing Forum team has fervently followed, the opening competition on this new niche has raised concerns over its impact on profitability.
“The food delivery business is very tough – taking on Meituan,” pointed Jonathan Pines, lead portfolio manager of Asia ex-Japan equity at Federated Hermes, one of those who studied the trend. “They’re worried about their core business, perhaps, and they’re looking for growth. So it was a negative development, and I think the market took it negatively.”
The shares of JD.com listed in Hong Kong are up by about six percent this month, trailing the 17 percent rise of Meituan. Meanwhile, the options market is pricing in an eight percent move in either direction for JD.com’s stock after the results of the report, compared with an average gain or drop of five percent following its past eight quarterly reports.
In other words, that’s a lot of money being invested in, but as to how much, it’s a question mark for the experts.
So, what is JD.com doing to compensate?
10 million meals, more
Actually, JD.com was quick to think. Days prior to the financial challenge, according to experts, on February 19th, JD.com became the “first major platform” to mandate the “Five Social Insurance and One Housing Fund,” the media reported.
This is a comprehensive social security program that covers pension, medical, unemployment, work injury, and maternity insurance, including housing funds for full-time riders beginning March 1st. For part-time riders, they get access to accident and medical coverage, on the other hand.
Interestingly, rivals thought this was a good idea, so they followed suit, including Meituan.
What else?
Actually, JD.com is not just having their mouths open, gaping, while waiting for the apple to fall from a tree. It is taking action – big strides.
On February 27th, JD Auto, the automobile wing of JD.com, tied up with Xiaomi Auto to launch its store on JD.com, coinciding with the release of a brand-new Xiaomi phone. This milestone further strengthens the strategic partnership between JD Auto and Xiaomi Auto.
The store of Xiaomi on JD.com offers a comprehensive array of automotive products and services, which include car accessories and maintenance services. The store also features the Xiaomi charging station, MiJia portable car charger, car trunk organizer, car windshield sunshade, and car comfort headrest.