JD.com’s New Business Loses 14.7 Billion Yuan: Is This Food Delivery Battle Unavoidable?

In just one quarter, JD.com’s new business—mainly its food delivery service—lost 14.7 billion yuan. This raises the question: is JD.com’s aggressive push into sectors like catering and fresh produce, which it historically hasn’t excelled in, really the right move? For JD.com, the biggest concern may be whether users will actually develop a habit of choosing JD.com for food delivery once the heavy subsidies stop.During the Q2 earnings call, JD.com executives emphasized that food delivery and instant retail are strategic priorities, aiming to build a sustainable business model for five, ten, or even twenty years. While this vision is ambitious, as a latecomer in the market, JD.com faces a major challenge: changing users’ entrenched habits—most still choose Meituan or Ele.me as their first option for food delivery—and reshaping consumer perception is no easy task.Publicly available data shows that Meituan’s peak daily order volume ranges from 120 million to 150 million, while Ele.me reaches 80 million daily orders (both include instant retail). In comparison, JD.com’s daily orders have only reached 25 million, and that was largely driven by heavy subsidies. This daily volume is far below the records set by Meituan and Ele.me.From my perspective, JD.com’s core strength has never been selling meals or fresh fruits and vegetables.

Its expertise lies in electronics, cosmetics, and standardized consumer goods. JD.com should focus on leveraging these strong categories that naturally occupy consumer mindshare, rather than trying to compete in areas where it lacks experience.Food Delivery Dragging Down JD.com.On August 14, JD.com reported a Q2 with mixed results. On the positive side, the company achieved revenue of 356.7 billion yuan in the second quarter, a 22.4% year-over-year increase. JD Retail (including JD Health and JD Industrial) and JD Logistics (internal and third-party logistics) both posted double-digit growth.However, adjusted net profit was only 7.4 billion yuan, down 49% year-over-year. The costly subsidies for the food delivery war became apparent this quarter. The new businesses—including JD Delivery, JD Product Development, JD Xi, and overseas operations—became the main drag, posting a quarterly loss of 14.78 billion yuan, slashing overall net profit nearly in half. Media widely noted that JD.com’s revenue growth failed to translate into profit, largely due to the aggressive subsidies in its new food delivery business.In Q2, net profit attributable to ordinary shareholders fell 51% year-over-year to 6.2 billion yuan. On a Non-GAAP basis, net profit was 7.4 billion yuan, down 49% and declining 42% from the previous quarter. In fact, the 13.94 billion yuan profit from JD.com’s core e-commerce operations alone was insufficient to offset the food delivery losses; only the combined gains from logistics and other segments barely pushed overall net profit into positive territory.

It’s fair to say that the entire JD.com Group is propping up its food delivery segment.Aggressive Food Delivery Expansion.JD.com officially launched its food delivery service in February. On April 11, the company injected billions in subsidies, offering users up to 20 yuan per day across all restaurant partners on the platform, along with discount coupons and “super deals.” During Q2, JD.com also continued expanding its full-time delivery rider team, rolling out comprehensive social insurance coverage, which further increased costs.After JD.com triggered the subsidy war with its massive spending, competitors responded aggressively: Taobao Flash Sales integrated with Ele.me, investing up to 50 billion yuan in subsidies, while Meituan ramped up its own spending to defend its market share. As a result, daily order volumes across major platforms continued to climb. On August 7, Taobao Flash Sales and Meituan together processed over 260 million orders—a record high, more than double the 2024 average. JD.com, after announcing 25 million daily orders in early June, has not disclosed updated figures.Although JD.com’s food delivery service isn’t profitable, it does drive traffic. In a previous sharing session, JD.com founder Liu Qiangdong noted that the investment in JD Delivery was worthwhile because 40% of users who order food also purchase JD.com e-commerce products. He said: “The money we lose on food delivery is more cost-effective than buying traffic on Douyin or Tencent.”

User Behavior and Cross-Selling Challenges.However, users drawn to JD.com’s food delivery are largely subsidy-driven, price-sensitive customers. They typically take advantage of discounted meals or fresh produce, then leave. Expecting these users to significantly cross-purchase electronics or other high-margin products is unrealistic given their behavior and the nature of food delivery.JD.com’s Heavy-Handed Strategy.In June, Liu Qiangdong emphasized that JD.com’s entire business revolves around supply chain excellence. All JD companies serve the supply chain, including food delivery. He argued: “I can operate the front-end food business at a loss; I make money from the supply chain.” He applied the same logic to hotels and restaurants, highlighting the cost-intensive, complex nature of supply chains behind these industries.On July 20, JD.com opened its first “7Fresh Kitchen” in Beijing, offering “delivery + pickup” meals priced 10–30 yuan. Within a week, daily orders exceeded 1,000, with repeat purchases 220% higher than the industry average. JD.com also launched a “dish partner” program, planning to invest over 10 billion yuan in the next three years to open 10,000 7Fresh Kitchens and recruit 1,000 signature dish partners. The concept emphasizes end-to-end supply chain management: chefs provide recipes, while JD handles site selection, store setup, supply chain, and operations. Ingredients are standardized from source to store, with transparent kitchens and robotic cooking.

Liu Bin, head of operations, said: “This could be the biggest innovation in food delivery supply chains in 15 years.”This model represents a full-fledged entry into the restaurant industry: not only delivering but also preparing the food in-house. However, given the diversity of consumer preferences—some want stir-fry, others noodles or rice—the challenge of offering differentiated options is significant. Furthermore, fair allocation of traffic between JD-operated kitchens and third-party merchants remains a concern.JD.com has also entered discount supermarkets, opening five stores in Jiangsu and Hebei, each around 5,000 square meters. Whether in food delivery or offline retail, all of these efforts support JD.com’s 30-minute delivery promise, leveraging the supply chain as Liu Qiangdong described.Strategic Considerations for Instant Retail.In the instant retail space, JD.com’s self-operated stores serve as a supplement to user choice, likely accounting for less than 10% of total order volume. With millions of restaurants and convenience stores in a city, one operator cannot satisfy every consumer. The core aim is faster delivery across all categories—food, fresh produce, electronics, clothing, and daily necessities. This threatens traditional e-commerce platforms like Taobao and JD.com itself if consumers can receive most goods within 30 minutes.

As the article noted, JD.com is not inherently strong in food or fresh produce. Its aggressive investment in food delivery—losing 14.7 billion yuan in a single quarter—appears motivated by long-term strategic positioning, rather than immediate returns. The rationale: securing a foothold against Meituan and Ele.me in potentially overlapping core categories in the coming 3–5 years.However, sustaining massive subsidies long-term is unsustainable. In my view, JD.com should differentiate its food delivery strategy from established competitors, focusing on categories where it has natural advantages: electronics, digital products, cosmetics, and daily essentials. Delivering high-value items within 30 minutes is a viable business, provided pricing or delivery costs offer advantages over traditional e-commerce. Self-operation can complement, but collaborating with diverse local merchants—through joint ventures or platform partnerships—may prove a more scalable model.Currently, JD.com’s delivery uses three primary methods:Merchant direct delivery—mainly fresh produce and daily necessities;Front warehouse (JD-operated) for standardized products like electronics;Coordinated dispatch between warehouses and offline stores—optimizing source based on location.I believe coordinated self-operation with partner merchants is the most effective strategy for handling large order volumes while leveraging JD.com’s supply chain strengths.