(Bloomberg) — JD.com led a decline in China tech peers following a report that the e-commerce firm is planning a subsidy campaign as it ratchets up a price war against rivals.

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The Hang Seng Tech Index fell as much as 2.9% Tuesday, on track for its lowest close this year. JD.com plunged as much as 8.4%, the most in four months, following a media report on its $1.5 billion subsidy campaign to compete against budget shopping app Pinduoduo.

If JD goes ahead, the aggressive move suggests the world’s largest internet arena may be entering a period of hyper-competition that may erode margins. Newer entrants such as PDD Holdings Inc. and ByteDance Ltd. are encroaching on incumbents such as market leader Alibaba Group Holding Ltd., which was hobbled by an antitrust probe that formed part of a wider internet crackdown.

“Embarking on an aggressive subsidy campaign could be an acknowledgment on JD.com’s part that it is facing market share pressure from Pinduoduo,” said Vey-Sern Ling, managing director at Union Bancaire Privee said. The move is “negative for the entire e-commerce industry, including Alibaba,” he added.

China’s internet giants are again revving up in pursuit of growth, after Beijing in 2022 began relenting in a broad effort to curb the industry’s influence. Food delivery leader Meituan, which is hiring more than 10,000 people to counter rivals in its own market, is said to be expanding its service to Hong Kong in its first overseas foray.

JD.com’s potential offensive to lure cost-sensitive consumers also suggests e-commerce leaders’ superiority in elements such as logistics isn’t proving enough to thwart competition from smaller players.

Among the sector’s biggest stocks, Alibaba and Tencent Holdings Ltd. fell more than 3% each.

–With assistance from Edwin Chan and Jeanny Yu.

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