China’s duopoly Ele.me and Meituan (3690.HK) looks set to get a major new competitor, as e-commerce giant JD.com (JD.US; 9618.HK) looks for a place at the country’s massive but highly competitive takeout dining table.
Reports of the move abounded in Chinese media earlier this week, after JD.com posted an ad looking for “high quality dine-in restaurants” to join its program. Equally eye-catching were the terms JD.com was serving up, including zero commissions for restaurants that join before May 1. That should be a huge incentive for new restaurants, since Ele.me and Meituan currently typically charge anywhere from 5% to as much as 25% of the price of each order for restaurants that participate in their services.
Another interesting twist to this story comes from JD.com’s recent launch of a plan to privatize its Dada Nexus (DADA.US) subsidiary, which operates a local delivery business working with partners like grocery and drugstore chains. That network would immediately give JD.com the basic delivery infrastructure it needs to operate such a takeout dining service.