Alibaba's $100 billion loss in China's food delivery war
Alibaba, the giant behind so much of China's e-commerce, has seen its value drop by $100 billion thanks to a wild price war in food delivery.
The fight for customers is so intense that Alibaba's shares have dropped 28% since March—almost twice as much as rivals JD.com and Meituan.
Brokers are now lowering their expectations for Alibaba
Analysts say Alibaba could lose 41 billion yuan ($5.7 billion) on food delivery next year—that's about a third of what it usually earns.
All this competition means companies spent 25 billion yuan on discounts in just one quarter, and now brokers are lowering their expectations for Alibaba.
How the market is playing out
When JD.com jumped into food delivery this year, Alibaba merged its delivery arm with its main business and rolled out a huge subsidy plan worth 50 billion yuan to keep up with Meituan.
Even the government is starting to worry if this discount battle can last.
Analysts still see long-term potential in Alibaba
Despite all the chaos, analysts still see long-term potential in Alibaba because its stock looks cheap right now.
They're betting that these big investments will pay off down the line—even if things look rough at the moment.