Meituan, the Chinese food delivery company, lost $26 billion in value as of Friday after regulators wanted to lower fees food platforms are charging restaurants, Financial Times says.
The crackdown comes as China has had numerous government restrictions on the tech sector, mostly intended to rein in tech companies.
The announcement came as agencies were proposing ways to bolster the struggling service industry in the country, which has seen troubles as the country tried to curb COVID cases.
According to the governing body, the intent was to get delivery platforms to “take another step to lower the service fees charged to restaurants in order to lower their operating costs.”
The NDRC also said it wanted to ask platforms to discount restaurants in COVID-hard-hit areas.
Meituan has controlled around 70% of China’s food delivery market, and the segment contributed over half its revenue in the third quarter.
Last year, Chinese regulators fined Meituan $537 million for abusing its market position, demanding that the company make changes to the way it operates and treat delivery riders better.
The commissions Meituan earns from food orders have also attracted controversy. Several regional restaurant associations demanded the company lower its fees at the beginning of the pandemic. And FT writes that there’s been political pressure to lower the commission rates while lifting riders’ pay, which has made it thorny to boost profits for Meituan.
Meituan reportedly said it would be accepting CBDC payments from customers.
PYMNTS wrote that users can link their Meituan app to a digital wallet, which will let them pay for various things like cabs, hotel reservations and restaurant meals.
See also: China’s Meituan to Allow CBDC Payments
The last few months have seen other companies, including WeChat and JD.com, using digital payments.
In the past few years, China has been testing the digital yuan with government employees along with the populations of big cities. Then in 2020, the country rolled out a trial for cities including Suzhou, Shenzhen, Chengdu and Xiong’an.