$Alibaba(BABA.US) $JD.com(JD.US) $MEITUAN(03690.HK)

After two rounds of fierce competition with Ele.me and Douyin, the market should have fully recognized Meituan's stronghold in the food delivery market: a business model that thrives in urban alleyway battles, yet Meituan has managed to establish a nationwide market share advantage.

Once such a stronghold is established, even well-funded competitors like Ele.me can only choose a few cities to challenge Meituan. After heavy subsidies, they may temporarily boost local market share, but once the subsidies stop, Meituan's natural traffic from Dianping and its merchant acquisition advantage bring users back, seamlessly restoring its dominance.

Douyin failed in this business, and Ele.me also lost. So, JD.com, as an even later challenger—especially with fewer resources than Ele.me—faces an uphill battle to snatch meaningful market share from Meituan.

From this perspective, capital can ignore the renewed billion-dollar subsidy war between JD.com and Ele.me and still assign Meituan a relatively high valuation.

However, an intriguing takeaway from Alibaba and JD.com's recent earnings calls is that these e-commerce giants are knowingly stepping into the tiger's den with their new food delivery strategies. Their goal is not about grabbing market share or profit per order.

Neither treats food delivery as a standalone, self-sustaining business. In the short term, they aim to use their e-commerce apps to drive traffic to their delivery services. In the long term, they hope users will develop a habit of ordering food and non-food deliveries through their e-commerce apps, enabling cross-selling opportunities. This high-frequency engagement is meant to boost their core e-commerce traffic.

Essentially, as e-commerce matures, these legacy players are using food delivery to defend their app engagement and traffic base.

Under this logic, neither needs their food delivery business to be profitable—it’s fine to lose money. For them, spending on user acquisition through platforms like Xiaohongshu is no different from investing in Ele.me to increase daily app opens. Once user habits form, it could drive broader e-commerce revenue—why not?

We all remember how internet giants refused to give up on long-form video despite it being a money pit, simply because it was crucial for user engagement time. Now, food delivery seems to follow a similar logic: the 2025 food delivery war isn’t a short-term battle but a prolonged war of attrition over traffic gateways.

But how much of this logic is priced into the market? Meituan’s seemingly high barriers face wave after wave of challengers—Ele.me left, Douyin came; Douyin left, JD.com arrived...

In the end, Meituan’s stronghold looks secure, but the number of competitors keeps growing. Meanwhile, Meituan’s expansion efforts—community group buying, ride-hailing—have largely failed. Now, as it ventures overseas, its core food delivery business faces relentless attacks from deep-pocketed e-commerce rivals. The fire in the backyard keeps reigniting!

Simply put, in the twilight of the mobile internet era, the boundaries between near-field instant delivery and far-field e-commerce logistics are blurring. This chaotic war was inevitable.

Dolphin Research predicts the most likely outcome: everyone sinks into the 8X PE trap, struggling to escape.

So here’s the soul-crushing question: JD.com and Alibaba are already stuck in the low-barrier, hyper-competitive 8X PE e-commerce trap. How much longer can Meituan enjoy its high PE?