$JD-SW (09618.HK)$ the competition with $MEITUAN-W (03690.HK)$ The instant retail battle continues to escalate, with competition extending from the business level to the public opinion battlefield.

On April 21, JD.com released an "Open Letter to All Delivery Riders", not only accusing the Industry of forcing riders to choose between two options, but also announcing plans to recruit 0.1 million full-time riders to expand capacity. This move immediately caused a stir in the Industry, while Meituan quickly responded with two statements denying the related accusations, claiming that JD.com’s statements were purely fictional.

This battle among giants has lasted for months, with both sides engaging in an all-around competition over rider social security, platform investment, and business models, even top executives personally getting involved in the competition. Against the backdrop of increasingly fierce competition in the existing market, the struggle for resources between platforms has become more intense, and the contest between JD.com and Meituan is far from over.

Are riders being forced to choose between two options?

The "takeout battle" between JD.com and Meituan has once again escalated, with both sides fiercely competing over rider resources. On April 21, JD.com Group announced that there were incidents within the Industry of forcing riders to choose between two options, and announced a series of countermeasures: guaranteeing the order volume for banned riders, expanding the recruitment scale to 0.1 million full-time riders, prioritizing employment for riders' family members, and even introducing a "free meal after 20 minutes" consumer guarantee policy. JD.com emphasized an open attitude towards part-time riders, encouraging them to take orders on multiple platforms to maximize their income.

This controversy stems from multiple chat screenshots circulated on social media, which contain accusations such as "Meituan banned riders from receiving orders on other platforms." In response, Meituan issued two clarifications through its official public account on April 19 and 21, emphasizing that it has never restricted riders from receiving orders on other platforms, and stating that it has secured evidence against the accounts that spread false information and will take legal action to protect its rights. Notably, JD.com did not directly name Meituan in its announcement, nor did it disclose whether it reported the matter to regulatory authorities.

In fact, under the dominance of Meituan, which holds a 70% market share, the food delivery market in China has long had a delicate relationship between platforms and riders. In 2021, Meituan was investigated for anti-monopoly concerns regarding the "choose one from two" issue faced by merchants. Currently, riders generally adopt a multi-platform order strategy to flexibly adjust their order times by comparing order revenues and dispatch mechanisms across platforms. A rider who takes orders from both Meituan and Eleme revealed that operating on multiple platforms not only balances income fluctuations but also avoids the policy risks associated with a single platform.

In this competition, JD.com attempts to shift the market landscape with better incentives for riders, while Meituan focuses on maintaining the stability of its delivery ecosystem. The struggle between the two parties is not only about commercial interests but also reflects deeper issues concerning labor rights protection in the gig economy. As regulatory scrutiny increases and public attention intensifies, this food delivery war may prompt the Industry to reassess the balance of interests among platforms, riders, and consumers.

JD.com "borrows" food delivery to compete in instant retail.

Behind this contest is both parties' strategic layout for the 2 trillion yuan instant retail market and the market opportunities brought by the rise of young consumers.

Since entering the food delivery market, JD.com has adopted a three-step strategy: first, attracting merchants with a "0 commission" policy, then launching highly competitive welfare policies for riders, and finally competing for consumers through hundreds of billions in subsidies. Notably, JD.com continues to enhance its rider benefits, committing to pay social insurance and housing fund contributions for full-time riders while covering the personal contributions to ensure riders' earnings are unaffected. As of March 20, JD.com has signed formal labor contracts with over 0.01 million full-time riders.

Meituan proactively responds with its mature delivery network and merchant resources. In terms of rider benefits, Meituan has announced that it is building a social security information system and plans to start paying social security for riders from the second quarter. At the same time, Meituan's flash purchase business is growing rapidly, having partnered with 5,600 large chain retailers and 410,000 local small merchants. Meituan's founder, Wang Xing, stated during an earnings call that instant retail could occupy more than 10% of the e-commerce market in the future.

This competition reflects the immense potential of the instant retail market. Data shows that in 2023, the scale of China's instant e-commerce market reached 2 trillion yuan, with a year-on-year growth of 36%, and it is expected to exceed 5 trillion yuan by 2027. Notably, users aged 35 and below account for 72%, with the post-95 generation treating instant consumption as a part of their daily lifestyle. As industry expert Zhuang Shuai stated, food delivery not only enhances user activity on platforms but the instant delivery system it builds may also achieve the ultimate goal of "delivering everything."

In this competition, the strategic differences between the two sides are evident: JD.com is trying to quickly seize the market through aggressive pricing and welfare policies, while Meituan relies on its mature delivery network and merchant resources to consolidate its advantages. As the market size continues to expand, this contest may reshape the landscape of China's instant retail market. However, regardless of the outcome, both consumers and riders are expected to benefit from the competition, and the Industry will develop in a more standardized and healthy direction.

Editor/Rocky