Chinas Meituan lost $82 billion in market cap amid rising competition, slowdown in food delivery business
Summary
The company still dominates Chinas food delivery industry, with almost 70% of the market share in the mainland, according to 2022 data from research firm ChinaIRN. "Based on my experience, Ele.me is more aggressive [than Meituan] and have more approaches to giving [discount] coupons," Feifei Shen, director at The Blueshirt Group and a food delivery user in China told CNBC. Several factors including the macro environment and the warm weather were affecting delivery volumes, CFO Shao Hui Chen said during the companys third-quarter earnings call. Following that call, Meituans Hong Kong-listed shares plunged 12% to their lowest since March 2020, according to LSEG data. "However, uncertainty remains over the impact on profitability from ... competition from Douyin, which could result in operating cash flow volatility over the next 6-12 months," Fitch said.