Food Delivery Subsidy War Ignites Hong Kong Tea Stock Rally; Meituan, Alibaba Shares Under Pressure

TradingKey - On July 7th, the Hong Kong stock market showed significant divergence, with shares of the three major instant retail platforms — Meituan (03690.HK), Alibaba (09988.HK), and JD.com (09618.HK) — collectively declining, while the Hong Kong beverage sector saw a strong surge driven by platform subsidies and seasonal consumption. Platforms’ subsidies are spilling over to benefit the resident merchants. 

During intraday trading, Meituan's shares dropped over 4%, Alibaba fell more than 2.5%, and JD.com saw its stock decline by nearly 2%.

On the evening of July 5, Alibaba and Meituan rolled out large-amount no-threshold takeout vouchers, sparking a surge in orders. Meituan temporarily experienced server rate limiting and partial downtime due to order volumes exceeding historical peaks.

The short-term hiking cost from subsidies, coupled with market concerns over the "neijuan" (fierce competition) driving false prosperity, has placed downward pressure on the platforms' stock prices.

In stark contrast to falling platform stocks, Hong Kong-listed tea beverage equities rallied collectively at the open on July 7, with significant gains. Chagee (02555.HK) and Guming (01364.HK) surged around 10%, while Naixue’s Tea (02150.HK) and Mixue Ice Cream & Tea (02097.HK) advanced over 5%.

The substantial subsidies from Alibaba and Meituan precisely cover high-frequency, low-ticket-price standardized tea beverage categories, causing daily order volumes at tea shops nationwide to generally double.

Additionally, summer is traditionally a peak season for tea consumption; leading brands are vying for market share through new product promotions and various activities, with subsidies further amplifying the seasonal effects.