JD.com Delivery has arrived with a bang, fiercely challenging Meituan. Will this spark a new battle in the delivery sector?

Produced by | Xinpinlue Finance | Author | Wu Wenwu

The fierce Liu Qiangdong and his JD.com have entered a new race with increased vigor: introducing JD.com Delivery!

Xinpinlue Finance observed that on February 11, JD.com officially launched a recruitment drive for "quality dine-in restaurants" on its JD.com Delivery platform. JD.com announced that merchants joining before May 1, 2025, will enjoy commission-free services throughout the year, with the recruitment specifically targeting "quality dine-in restaurants".

Rumors of JD.com's interest in the delivery sector surfaced as early as 2022, and in 2024, JD.com Delivery was launched, garnering significant market attention and heated discussions.

Now, with JD.com's announcement of a year-long commission-free recruitment for merchants, its ambitions in the delivery business are clear. Is JD.com Delivery poised to shake up Meituan's dominance and ignite a new delivery war?

01 JD.com Delivery Emerges with Force, Challenging Meituan

Following JD.com's announcement of a year-long commission-free merchant recruitment, the market has begun to refocus and re-evaluate JD.com's latest moves in the delivery sector.

Unlike previous small-scale forays into delivery, JD.com has now prominently launched an independent entrance on JD.com's multi-user terminals.

Unlike the end of last year, the delivery service now has a dedicated entrance in the JD.com app's instant delivery section, featuring multiple chain catering brands such as Haidilao, Yuanji Dumpling, and Burger King, with a notable increase in catering categories.

The latest version of the JD.com app shows that the instant delivery entrance is prominently placed on the homepage, with sub-entrances for supermarkets, coffee and milk tea, group buying, fresh produce markets, and delivery within the instant delivery page.

JD.com's previous delivery business was mostly focused on light catering categories, but now, the categories available on JD.com Delivery have significantly expanded, indicating a trend towards a comprehensive full-category delivery service.

JD.com's delivery business has also significantly ramped up marketing activities for customers. For instance, the JD.com Delivery page randomly displays subsidies and benefits such as "free shipping", "5 off 49", and "free order drawings".

JD.com has established a separate entrance for delivery, with a clear increase in categories and intensified user marketing. In terms of merchant recruitment, it is also taking bold steps, revealing that JD.com Delivery is fully committed to its efforts.

As mentioned earlier, JD.com has long been testing the waters in the delivery business. Due to various factors such as the market economic environment and internal business adjustments at JD.com in previous years, it did not abandon the delivery business but continued to quietly experiment and develop.

Now, JD.com seeks new narratives and business growth points. It must have comprehensively assessed and examined the market environment before making the strategic decision to vigorously develop the delivery business after weighing all aspects.

With JD.com's high-profile efforts in the delivery sector, the market naturally focuses on the two current delivery giants, Meituan and Ele.me. Optimists believe that JD.com Delivery will surely grow strong and compete with Meituan and Ele.me in the future.

Undoubtedly, after years of development, Meituan has firmly secured its top position in the sector. Meituan has always been very crisis-conscious and continues to stabilize and strengthen its delivery business. However, as a giant, Meituan's market image has been multifaceted and even somewhat divisive.

Recently, a post claiming that "JD.com Delivery is launching with only a 5% commission, prompting Meituan to lower its high commissions" went viral. The market has also been rife with rumors about Meituan's high commission rates, but these have never been confirmed.

This time, Meituan had to respond to the post, stating that the online rumors about high commission rates were untrue, and the actual commission rate for merchants was 6% to 8%.

Earlier, an internet blogger claimed that JD.com was entering the delivery market with low commissions, leading to an emergency meeting at Meituan headquarters at 3 am, where executives reportedly threw coffee cups in anger... Thus, various rumors and gossip are speculating and commenting on the impact of JD.com Delivery on Meituan.

With JD.com focusing on the delivery business, Meituan will undoubtedly feel a sense of crisis, as JD.com has always been fierce and can disrupt an industry when it enters. For example, JD.com's entry into the express delivery business was very successful, and now the quality of JD.com Express is comparable to that of SF Express.

02 Can JD.com Spark a New Delivery War?

Although the current delivery market is dominated by the two giants, Meituan and Ele.me, new players are never in short supply. Many internet giants harbor dreams of entering the delivery business, and many have already tried it out, showing increasing interest in the sector.

As early as 2022, Douyin teamed up with Ele.me to pilot the delivery business in Nanjing. At the beginning of 2023, Douyin continued its efforts and officially launched the "Group Buy Delivery" service, primarily relying on third-party delivery platforms such as SF Express City, Flash Express, and Dada for delivery services. Last October, Douyin's lifestyle service platform announced that it would comprehensively upgrade its existing group buy delivery business to the "Casual Group Buy" business, unifying the entry points for home delivery and store visits for Douyin delivery.

Meanwhile, WeChat, under Tencent, is also deploying its delivery business. As early as February 2023, WeChat piloted the "Store Quick Delivery" mini-program, bringing together various types of stores such as restaurants, tea shops, ingredients, and fresh produce. Consumers can enter "Store Quick Delivery" through the mini-program on the WeChat Discover page and then jump to the merchant's mini-program to place delivery orders. WeChat's "Store Quick Delivery" business expanded to 12 cities, including Beijing, Shanghai, Chengdu, and Chongqing, in July 2023.

In comparison, both Douyin and WeChat's pilot delivery businesses rely on their own super platforms and entrust third-party delivery platforms to provide services. JD.com Delivery is entirely different; it has its own logistics system and mature same-city and instant delivery service capabilities. Data shows that JD.com Dada's active riders number nearly 1.3 million annually, allowing it to quickly develop its delivery business.

Therefore, when JD.com focuses on the delivery business, given its corporate style of targeting a sector and rapidly and efficiently developing it, it can swiftly form business combat effectiveness.

So, can JD.com Delivery's current efforts spark a new war among delivery giants?

In the view of Xinpinlue Finance, JD.com's focus on the delivery business can cause some ripples in the delivery market in the short term and may stir up the delivery sector in the long term, potentially leading to a new war among delivery giants.

First, the existing structure of the delivery market is relatively stable and will not change significantly in the short term.

Data shows that the combined market share of the two major delivery giants, Meituan and Ele.me, currently exceeds 90%, with Meituan accounting for nearly 70% of the entire delivery market.

In the short term, Meituan will remain the king of the delivery sector. Ele.me has been catching up with Meituan for many years, but even after being acquired by Alibaba, it has still not caught up. This underscores Meituan's leading and stable position in the delivery sector.

Secondly, from the perspective of user perception, the two giants, Meituan and Ele.me, have already occupied users' minds and usage habits. JD.com Delivery needs to make concerted efforts, and it will take time.

After years of operation in the delivery market, Meituan and Ele.me have obviously become the preferred platforms for consumers to order delivery, and users have developed usage habits.

In the future, to attract users, JD.com Delivery will have to invest real money in activities and marketing, providing subsidies to users and giving them a taste of the benefits to entice their usage.

Third, from the perspective of merchants, they naturally hope for more orders, lower commissions, and fewer fees from the platform. It remains to be seen how JD.com Delivery will support merchants.

According to a report by The Beijing News, the commissions (take rates) of most delivery platforms are currently above 20%, representing a significant operating cost for merchants. To some extent, merchants have long suffered from high commissions from delivery platforms.

Jia Guolong, the founder of the renowned chain catering brand Xibei, complained last November that the catering industry does not make money, but the platforms make huge profits. He couldn't understand how the platforms could have such bright financial reports in the first half of the year and who was earning that profit. This led to the topic "Jia Guolong wants an explanation from Meituan" trending on social media.

For many merchants, Meituan accounts for more than half of their order sources, followed by Ele.me. Merchants are certainly happy to see new delivery platforms enter the market, even if it means lower commissions in the short term, as it at least brings new order sources.

JD.com Delivery needs to make concerted efforts from multiple aspects such as consumers, merchants, and riders. When it develops to a certain scale in the future, it will definitely take away a certain market share from Meituan and have a greater impact on Ele.me.

In the short term, JD.com Delivery will undoubtedly stir up the delivery sector and intensify competition. In the long run, if JD.com Delivery continues its efforts, a new delivery war will inevitably come, but it won't happen so soon.

03 Conclusion

JD.com's entry and focus on the delivery business is, of course, aimed at the vast catering delivery market in China.

According to Gangtise Investment Research data, the compound annual growth rate of China's delivery industry market size from 2017 to 2022 was 29.94%, and it is expected that the market size of the delivery industry will reach 1.9 trillion yuan by 2027, with an industry penetration rate expected to reach 30.4%.

Whether from the perspective of market size, industry penetration rate, or other aspects, China's catering delivery market will undoubtedly be a major battlefield for internet giants to compete for in the future.

The delivery market has already developed quite maturely, especially in first- and second-tier cities where the market is gradually saturated and has entered a stage of stock competition. Both Meituan, which is striving hard, as well as platforms such as Douyin and WeChat, are all seeking incremental growth in the saturated market, which is actually not an easy feat.

Especially the delivery sector in lower-tier markets is being favored and continuously explored by market players. The delivery business in these markets may become a future focus for JD.com Delivery.

How JD.com's efforts in the delivery business will unfold in the future remains to be seen. The key lies in how much determination JD.com has and how many resources it can invest.

From an industry development perspective, JD.com's disruption in the delivery sector is bound to stir up some small waves and may even cause huge ripples in the future. If JD.com continues to use low prices as its competitive strategy, it is more likely to produce a catfish effect.

So, if the prices are lower and the delivery times are similar, would you be willing to choose JD.com Delivery?