Meituan (美團) has unveiled plans to hire as many as 10,000 people this quarter, as the Chinese food delivery company tries to fend off a challenge from ByteDance Ltd (字節跳動).
Meituan’s recruitment drive — which is to span the nation from Beijing to Shenzhen — contrasts with layoffs rocking the tech industry as Silicon Valley titans and start-ups fire people to weather a potential recession.
The campaign is intended to catch an upswing in consumer consumption, the company said in a statement yesterday.
Photo: Reuters
It coincides with ByteDance’s expanding efforts to get into a delivery arena that Meituan dominates, and where Alibaba Group Holding Ltd’s (阿里巴巴) Ele.me (餓了麼) is a distant second.
ByteDance’s Douyin (抖音) — Tiktok’s cousin in China — is testing a grocery and food delivery service in Beijing, Shanghai and Chengdu, and could consider expanding that to more cities, a spokesperson said, confirming local media reports.
Meituan shares yesterday closed 6.5 percent lower in Hong Kong — the lowest level since November last year amid rising concerns about intensified competition.
“Douyin seems to be expanding its ambition beyond cooperation with Ele.me, and wants to do it nationwide,” Forsyth Barr Asia Ltd senior research analyst Willer Chen (陳偉樂) said. “This will lead to more head-to-head competition between Meituan and Douyin.”
If Tiktok’s operator forges ahead with full-fledged services, it could reignite a battle for control of the market that wiped out billions of US dollars in value over the span of a year, before Beijing began to crack down on “reckless expansion of capital.”
Meituan, which continues to report losses, saw revenue surge 28 percent in the September quarter, as demand held up during the downturn. China’s reopening is expected to spur economic activity and benefit Meituan in the longer run.
Douyin is becoming more ubiquitous in China, much like Tencent Holdings Ltd’s (騰訊) super-app WeChat.
Apart from bite-sized clips and live streams, ByteDance’s flagship video forum is making forays into online commerce through services such as grocery and food delivery. That could help ByteDance diversify its revenue from online advertising, and reduce the influence of Alibaba and Meituan over China’s app-based digital economy.
“The local services market in China is large, and penetration is still low, so there can be sustainable growth for multiple players,” Union Bancaire Privee managing director Ling Vey-sern (凌煒森) said. “Douyin has substantial user traffic, but its local service offerings may cater more to push-based recommendations and impulse-buying, rather than Meituan’s more comprehensive services.”
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