Meituan Slashes Commissions Post Regulatory Order; Alibaba Could Be Next

Chinese food delivery firm Meituan MPNGY looks to lower commissions for merchants on its platform, Reuters reports.
Other major food delivery platforms in China include Alibaba Group Holding Ltd BABA-owned Ele.me.
Meituan currently charges ~12% in commissions for its food delivery business, a unit accounting for more than 50% of its total revenue, according to analysts' estimates.
Meituan also aims to cap the fees at 5% this year for around a million small and medium-sized merchants facing operational difficulties.
Meituan would also cut half of the commissions, capping at one yuan per order, for catering vendors in pandemic-hit areas and aimed to achieve full nationwide transparency in charging commissions this year.
Chinese regulators recently issued guidance for online food delivery platforms to reduce service fees to help lower catering businesses' operating costs, wiping off $26 billion in Meituan's market cap.
Price Action: BABA shares traded higher by 2.44% at $107.76 on the last check Tuesday.