Jakarta, CNBC Indonesia – Meituan-Dianping, one of Gojek’s investors, had to be willing to lose a market capitalization of US $ 38.96 billion or IDR 553.33 trillion (exchange rate of IDR 14,200) in the last two weeks, when Beijing was monitoring the Chinese food delivery giant.
On April 26, China’s State Administration for Market Regulation (SAMR) opened an investigation into Meituan’s “alleged monopolistic practices”. This is the second antitrust investigation of a domestic tech company. Alibaba was the first to fall and was fined 18.23 billion yuan or US $ 2.8 billion as a result.
Quoted from CNBC International, Thursday (13/5/2021), the country’s regulators saw the alleged practice in which Meituan forced traders to choose its platform over rivals.
Since closing at 305 Hong Kong dollars on April 26, Meituan shares have plunged around 16%. On Wednesday, the stock rose about 2.5% closing at 255.20 Hong Kong dollars.
However, since April 26, the company has lost about US $ 38.96 billion. The Meituan probe highlights a growing push to regulate China’s technology sector, which has largely grown without strict regulation over the past few years.
In February, China issued a revised antitrust rule it said aimed at “economic platform” companies, which is a generic term for internet companies that operate a wide range of services from e-commerce to food delivery.
Responding to the SAMR investigation, Meituan said he would actively cooperate with regulators in the investigation. The company is committed to taking actions to improve compliance, safeguard the legitimate rights and interests of users and all related parties, promote the long-term development of the industry, and strive to fulfill its social responsibility.
While the SAMR investigation is underway – which could result in a multi-billion yuan fine – a number of incidents have added to the pressure on the shipping giant.
Wang Lin, an official at the Beijing City Human Resources and Social Security Bureau, disguised himself as a Meituan driver, earning 41 yuan (U $ 6.37) during the 12-hour shift. He also explored the working conditions of Meituan drivers.
The company said it had started plans in terms of the career development of drivers and the protection of their rights and interests.
“We know this is far from enough, but we will continue to work to improve the work experience of delivery workers,” Meituan said in a statement in Chinese, translated by CNBC.
The pressure on Meituan-Dianping increased after Meituan CEO Wang Xing posted a poem fragment on Fanfou’s social media on May 6. He founded this Twitter-like service in the late 2000s.
The story tells the story of an ancient emperor who burned books to silence intellectuals. However he was eventually overthrown by two uneducated people. This story has been interpreted as a veiled criticism of Xi Jinping’s government. Wang deleted the post and issued a clarification on May 9.
He noted the emperor was overthrown by two men who did not have much education and used it to express business lessons.
“It reminds me that the most dangerous rivals are usually not what you expect. Alibaba has been watching JD.com for a long time. In the end, it was Pinduoduo who came out of nowhere and competed with Taobao,” Wang said in Mandarin.
Taobao is one of Alibaba’s e-commerce products. Pinduoduo is a fast growing rival.
“Likewise, it looks like Ele.me is Meituan’s biggest rival. But what could overthrow the food delivery business could be companies or business models that we haven’t been paying attention to,” he added. Ele.me is Alibaba’s food delivery app.
Pressure on Meituan came from the Shanghai Consumer Council, due to some of its business practices surrounding fees charged to merchants and other complaints. The Shanghai Consumer Council is not a regulator, but Meituan was reluctant to comment.
(roy/roy)
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