JD.com (9618.HK), one of China's largest e-commerce companies, announced a massive pledge of 22 billion yuan ($3.12 billion) toward housing support for its delivery couriers. This move, announced Friday, escalates the ongoing competition in China's instant retail market and responds to growing public and regulatory scrutiny over courier welfare.
JD.com, Meituan (3690.HK), and Alibaba (9988.HK) are engaged in an intense battle for market share in the instant retail space (goods delivered within one hour). This competition has led to billions allocated toward consumer subsidies and discounts, squeezing profit margins.
Chinese authorities have summoned these major firms, urging them to scale back their rivalry and engage in 'rational competition'.
JD.com's pledge follows food delivery rival Meituan's promise last month to invest 10 billion yuan over the next five years to build a more comprehensive welfare system for its riders.
JD.com stated it has already provided 28,000 units of housing for front-line employees. The company now plans to provide an additional 150,000 units of housing over the next five years.
The intense rivalry places significant pressure on China's estimated 12 million couriers. Their precarious existence has increasingly become a subject of public attention through movies, memoirs, and viral social media content.
In addition to housing, firms have generally promised better social insurance coverage and have revised incentive structures to reward riders for timely deliveries instead of penalizing lateness.
Meituan already operates a subsidised "Rider Apartments" scheme in cities like Beijing, Shenzhen, and Chongqing, offering rents in some areas at approximately 50% of market rates.
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