China's Major Food Delivery Platform Could Reconsider Subsidies Amid Regulatory Fines, S&P Says

MT Newswires Live18:03

Regulatory fines on China's major food delivery platforms could lead to players veering away from subsidies and instead adopt efforts focusing on quality, S&P Global Ratings said in a Monday release.

The fines point to authorities' efforts to tone down heightened competition, or involution, in the segment, S&P said.

The regulatory move will enable major players such as Meituan (HKG:3690), Alibaba (HKG:9988), and JD.com (HKG:9618) to focus on quality rather than on subsidies, which could lead to better profits after a decline last year, the rating agency said.

However, long-term impact will depend on whether the rule will be thoroughly enforced, S&P said.

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