Meituan Inc. and Alibaba Group Holding Ltd. saw their shares rise sharply on Monday as Beijing unveiled new regulatory measures aimed at curbing aggressive pricing strategies in the tech and e-commerce sectors. The moves signal a shift toward stabilizing market competition and protecting long-term industry health.
- Meituan and Alibaba shares rose 7.3% and 5.8% respectively on regulatory optimism
- New rules limit predatory pricing, requiring transparency in discount structures
- Fines for violations may reach up to 10% of annual revenue
- Meituan's Q4 2025 subsidies rose 42% year-on-year
- Alibaba's cloud division recorded 21% revenue growth in the same quarter
- CSI 300 IT Index gained 4.1% on the day
Meituan and Alibaba shares climbed 7.3% and 5.8% respectively in early trading, marking one of the strongest rebounds for Chinese tech stocks in weeks. The gains followed a government statement confirming new oversight protocols targeting predatory pricing tactics used by major digital platforms. The measures, issued by the State Administration for Market Regulation, specifically address the use of deep discounts and subsidies to dominate markets, which have disrupted traditional business models and strained profitability across sectors. The regulatory framework introduces stricter thresholds for price elasticity and requires platforms to disclose discount structures transparently. Companies found violating the rules may face fines up to 10% of annual revenue. Meituan, which has faced scrutiny over its food delivery unit’s reliance on low-cost promotions, reported a 42% year-on-year rise in subsidies in Q4 2025, a figure now under closer examination. Analysts note the move could benefit firms with sustainable pricing models. Alibaba’s cloud division reported a 21% increase in revenue growth in the same quarter, bolstered by stable customer acquisition. The shift may also reduce pressure on smaller players, who previously struggled to compete with subsidized offerings from tech giants. Industry watchers suggest the new rules could temper short-term volatility in digital marketplaces while encouraging innovation over discount-driven growth. Investors responded positively, with the CSI 300 Information Technology Index gaining 4.1% on the day. The broader tech sector’s recovery reflects renewed confidence in regulatory clarity. However, some market participants caution that enforcement details remain to be fully implemented, and the impact on quarterly earnings could vary by company.