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Companies

China's food delivery king feels the heat from Alibaba

Tencent-backed Meituan sees margins shrink as Alibaba's Ele.me aims for aggressive growth

HONG KONG -- Meituan-Dianping is the undisputed leader in China's fast-growing food delivery market, but Alibaba Group Holding aims to knock it from its perch by outspending it.

Beijing-based Meituan -- which is backed by Tencent Holdings -- controls nearly two-thirds of the market for on-demand food delivery, and its revenue is double that of Alibaba-owned rival Ele.me. But the latter is spending aggressively on subsidies to gain users, locking Meituan in a "death-grip price war," according to analysts. Analysts downgraded the company's shares after it announced results for the October-December quarter earlier this month.

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