Food delivery giant Meituan’s pact with short-video app Kuaishou seen as latest sign of China’s Big Tech firms appeasing Beijing

Strategic partnership between Meituan and Kuaishou comes at a time when Chinese authorities are trying to prevent ‘disorderly’ expansion of capital in the tech sector

Tencent-backed Kuaishou faces both fierce competition with Douyin, the Chinese version of TikTok, and increasing regulatory scrutiny from Beijing

Reading Time:2 minutes

Food delivery drivers for Meituan stand in formation before starting work in Beijing. Photo: AFP

Published: 6:30pm, 28 Dec 2021

China’s largest on-demand food delivery firm and the country’s second largest short video operator announced a “strategic partnership” on Monday, the latest sign of attempts by Big Tech to appease Beijing after a tumultuous year of regulatory crackdowns that have pummelled tech stocks.

Meituan, which has lost half its value since peaking in February 2021, will open a mini app on the short video platform operated by Kuaishou Technology, the main rival to ByteDance’s Douyin, allowing users to directly access products, services and coupons provided by Meituan merchants, according to a statement from the online provider.

The partnership, seen as a response to the central government’s push for interoperability among tech companies, comes after a difficult year in China’s internet industry. Kuaishou’s Hong Kong-traded stock has lost over 80 per cent of its value since its peak in February, and co-founder Su Hua resigned as chief executive two months ago.

Separately, Meituan was slapped with a 3.44 billion yuan (US$533 million) fine by China’s antitrust regulator in October for abusing its dominant market position through its “pick one from two” practice.

In May, founder Wang Xing removed all his social media posts from public view after a 1,000-year-old Tang dynasty poem he posted, seen as veiled criticism of Beijing, triggered a massive sell-off in the company’s shares.

In another deal struck amid the antitrust pressure, social media and video gaming giant Tencent Holdings last week offloaded its US$16 billion stake in JD.com, the country’s No 2 e-commerce player, in the form of dividends to shareholders.

Meituan and Kuaishou, both backed by Tencent, could face a similar situation in the future, according to Zhang Xiaorong, director of the think tank Beijing Cutting-Edge Technology Research Institute.