Shuli Ren, Columnist

Chew on This. China’s Cheap Food Deliveries Won’t Last

Meituan Dianping’s business depends on a bountiful supply of low-paid riders that’s at risk of drying up.

October 16, 2018 at 3:40 AM UTC

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She is a CFA charterholder.

Riding for a fall.
Photographer: Wang Zhao/AFP/Getty Images

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Life in China’s largest cities can be very cozy. Air quality is getting better, and with a few swipes on your phone, a bubble tea or a spicy hot pot can be delivered in half an hour. The convenience is hard to beat.

Meituan Dianping’s $4.2 billion Hong Kong IPO last month shows that food delivery is now big business. The company, which is backed by Tencent Holdings Ltd., has burned through $3.4 billion of cash since 2015. That hasn’t stopped investors from rewarding it with a $40 billion valuation — even after the stock declined about 17 percent since its debut last month.