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(Bloomberg) -- Investors in shares of JD.com Inc. face a gut check in next week’s earnings report from the online retailer as it girds for battle in the food-delivery space currently dominated by Meituan.

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JD.com officially launched its JD Takeaway platform earlier this month, while a number of its Chinese tech peers were garnering attention with AI-related news. Opening competition on a new front has raised concerns over the impact on its profitability, already dented by an ongoing e-commerce price war with Alibaba Group Holding Ltd. and PDD Holdings Inc.

“The food delivery business is very tough — taking on Meituan,” said Jonathan Pines, lead portfolio manager of Asia ex-Japan equity at Federated Hermes. “They’re worried about their core business, perhaps, and they’re looking for growth. So it was a negative development, and I think the market took it negatively.”

JD.com’s Hong Kong-listed shares are up about 6% this month, trailing Meituan’s 17% rise and Alibaba’s AI-fueled advance of over 50%. The options market is pricing in an 8% move in either direction for JD.com’s stock after its results, compared with an average gain or drop of 5% following its past eight quarterly reports.

How much money JD.com is investing in the new business remains a question mark, and will likely be a key focus when it reports earnings next Thursday. Expansion could pay off, with China’s online food-delivery market projected to grow to $197.9 billion by 2033 from $81.9 billion last year, according to ResearchAndMarkets.com.

The investment could “drag on margins if they decide to be aggressive,” said Xin-Yao Ng, an investment director at abrdn Plc in Singapore. “Meituan has built a very strong moat, so it’s fine if it’s a limited attempt, but will be bad if they talk about going all out.”

JD.com’s overall growth has started to reaccelerate with help from government subsides for household appliance purchases, though it’s still far below peak levels in years past. Its profitability has suffered from competition, with one of the tightest operating margins among large-cap Chinese internet firms at about 3%.

It faces a daunting task in taking on Meituan — the far-and-away leader in Chinese food delivery with a two-thirds market share — and others including Alibaba’s Ele.me. TikTok parent ByteDance Ltd. scaled back its food delivery ambitions with Douyin after attempting to go head-to-head with Meituan in 2023.