MEITUAN Dianping’s share price plunged Friday after the Chinese online food delivery-to-ticketing firm reported a far wider quarterly operating loss amid a costly battle with rivals including Alibaba-backed Ele.me.

The firm, which operates a “super app” of services and is backed by tech giant Tencent Holdings Ltd., saw its stock fall as much as 11.79 percent, its worst trading day since raising US$4.2 billion in a September initial public offering (IPO).

The drop, which chopped off more than US$4 billion from the firm’s market valuation, underscores the challenges of a company up against the clout of Alibaba Group and Japan’s SoftBank Group, which has invested in ride-hailing-cum-delivery firm Didi Chuxing.

“These companies are in an all-out blitz for market share — profitability only comes after one has consolidated its share of the market,” said Don Zhao, co-founder of Shenzhen-based e-commerce consultancy Azoya.

Meituan said late Thursday its operating loss in the three months to Sept. 30 tripled to 3.45 billion yuan (US$497.12 million) — though revenue rose 97.2 percent to 19.08 billion yuan.

Overall gross transaction volume grew 40 percent in the quarter, compared with 55.6 percent in the first half of the year.

“Transactions were up only 40 percent, which indicates that growth may be slowing down,” Zhao said. “This is why the market reacted so negatively — because investors question how much longer the company can sustain growth and whether or not it’s willing to shift its focus to profitability.”

Net loss soared to 83.30 billion yuan from a loss of 4.4 billion yuan a year earlier, which the firm attributed to changes in the fair value of convertible redeemable preferred shares.

Meituan Dianping, which makes most of its revenue from food delivery, said increased costs for payment processing and delivery riders had contributed to its losses. (SD-Agencies)