Food delivery battle anniversary review: Meituan's intense competition resulted in a loss of 23.4 billion yuan, and Wang Xing revealed "continued loss reduction in the first quarter of this year"

Wang Xing revealed that the average loss per order for food delivery in Q1 is expected to improve compared to Q4 of last year.

“Opportunities and challenges coexist, and industry competition is unprecedentedly fierce.” This is how Meituan CEO Wang Xing summarized the past year of 2025.

On March 26, Meituan (03690.HK) announced its fourth quarter and full-year results for 2025. The announcement showed that Meituan achieved an annual revenue of 364.9 billion yuan, a year-on-year increase of 8%; the annual net loss was 23.4 billion yuan, compared to a profit of 35.8 billion yuan in the same period of 2024, turning from profit to loss. Among them, the core local business segment incurred an operational loss of 6.9 billion yuan.

This delivery war, which began in the second quarter of 2025, not only turned Meituan’s profit curve but also reshaped the competitive landscape of the domestic local lifestyle sector. The once-stable duopoly in the food delivery market was broken, with Alibaba and JD.com entering the fray with their e-commerce ecosystem resources, plunging the industry into a cash-burning close combat.

Looking back, what has Meituan sacrificed for this critical territorial battle after nearly a year of food delivery warfare?

Image source: Visual China

Marketing expenses increased by 60% year-on-year, and signs of reduced losses appeared in Q4.

Behind the layered regulatory signals, the food delivery industry experienced a prolonged slaughter in 2025.

In February of last year, JD.com announced its ambitious entry into the food delivery market, followed by Meituan, Taobao Flash Sale, and other platforms joining in a comprehensive confrontation, with tactics such as cash-burning subsidies and commission-free recruitment continuously employed.

For Meituan, which is based on food delivery, this was a defensive battle it had to join.

However, this was followed by a comprehensive turn to losses for Meituan, primarily due to the decline in profits from its core local business segment. As Meituan’s foundational segment, in 2025, the core local business segment (including food delivery, dine-in, flash sales, and hotel and travel businesses) incurred an operational loss of 6.9 billion yuan, compared to a profit of 52.4 billion yuan in the same period of 2024; the operating profit margin plummeted from 20.9% to -2.6%.

Meituan’s financial report clearly pointed out that the negative shift in core local business operating profit mainly stemmed from a decline in gross margin and increased expenditures on user incentives, promotions, and advertising to enhance user transaction activity and loyalty in response to intense competition.

From the financial report, it can be seen that over the past year, to solidify its core market position in food delivery, Meituan significantly increased its investment in user incentives and marketing promotions. In 2025, Meituan’s total sales cost reached 253.8 billion yuan, a year-on-year increase of 22%; sales and marketing expenses reached 102.9 billion yuan, a substantial year-on-year increase of 60.9%.

However, this financial report also released an important signal, indicating that the loss margin has significantly narrowed, suggesting that the negative impacts of industry competition may have gradually peaked.

According to reports from Times Finance referencing the financial report, looking at a single quarter, in Q4 of 2025, Meituan’s core local business operating loss was 10 billion yuan, a significant decrease of 29% compared to a loss of 14.1 billion yuan in Q3; the operating loss rate also improved from 20.9% in Q3 to 15.5%.

The intensity of marketing subsidies is also shrinking. In Q4, its sales cost decreased from 70.3 billion yuan in the previous quarter to 67.969 billion yuan, and sales and marketing expenses dropped from 34.3 billion yuan in the previous quarter to 31.7 billion yuan.

During the earnings call that evening, Wang Xing revealed that the average loss per order for food delivery in Q1 is expected to improve compared to Q4 of last year, and the trend of reduced losses in food delivery will continue in the first quarter. Furthermore, from the beginning of Q1, Meituan continues to maintain its leading position in the mid-to-high price order market GTV.

Earlier, Haitong International Securities estimated that the unit economic loss for Meituan’s food delivery business is expected to decrease from 2.6 yuan per order in Q3 of last year to 2 yuan per order in Q4, mainly due to the reduction in winter subsidies.

However, short-term competitive pressure in the food delivery industry still exists. Wang Xing stated that competitors have increased their investments in the short term, which will create some pressure on Meituan’s profitability, and he hopes the market understands this situation.

It is worth mentioning that during Alibaba’s recent earnings call, Alibaba’s e-commerce division CEO Jiang Fan explicitly stated that they will continue to invest firmly in instant retail over the next two years to achieve market leadership; he predicts that the instant retail business segment will achieve overall profitability by the 2029 fiscal year.

During the earnings call, Wang Xing reiterated his opposition to price wars in the industry. He believes that current regulatory guidance is quite clear, and regulatory authorities firmly oppose “involution” phenomena. Meituan also hopes to foster a healthy and orderly market environment. Wang Xing stated that Meituan is currently reducing resource input for low-quality orders while striving to defend its market share and ensure it maintains a leading position in 2026.

Additionally, on March 11, international investment bank UBS released a research report showing that in February 2026, based on estimated daily order volumes, the market shares of Meituan, Alibaba (Fengniao/Taobao), and JD.com are 51%, 42%, and 7%, respectively.

While overseas operations are still in a cash-burning period, Keeta is accelerating its expansion.

While striving to maintain its food delivery foundation, Meituan continued to “pour” resources into new businesses in 2025.

In 2025, Meituan’s new business segment revenue grew by 19.1% year-on-year to 104.029 billion yuan, which includes Meituan Select, Xiaoxiang Supermarket, and the overseas food brand Keeta.

However, the current new business segment still recorded an operational loss of 10.1 billion yuan, which is an increase year-on-year, mainly due to increased investments in overseas businesses.

Last year, Wang Xing repeatedly emphasized the ten words, “Firmly internationalized, focus on internationalization,” during investor communications. Internationalization has become a key business growth point that Meituan is keen to cultivate. As early as May 2023, Meituan launched the food delivery brand Keeta in Hong Kong for the first time and accelerated its global expansion based on this.

The financial report disclosed that Keeta accelerated its global layout in 2025, including new entries into Qatar, Kuwait, the UAE, and Brazil. During the earnings call that evening, Wang Xing revealed that Keeta is expected to achieve positive monthly UE in Saudi Arabia by the end of 2026. Previously, Keeta had already achieved profitability in Hong Kong in October.

“In the long run, Meituan will steadfastly invest in internationalization, but the direction of investment will be more focused on the instant retail sector where core advantages can be leveraged,” said Wang Xing.

According to Times Finance from the earnings call, Keeta’s losses will still remain at a high level in 2026 due to multiple new markets entered in the second half of 2025 still being in the cultivation phase; however, the efficiency of domestic new businesses continues to improve, which is expected to offset overseas investments, and the overall loss scale of the new business segment in 2026 will not exceed that of 2025.

Meanwhile, domestically, Wang Xing is also trying to find new growth points outside the food delivery foundation.

Over the past year, Meituan has made cuts in the retail sector, decisively shrinking non-core businesses like Meituan Select, while concentrating resources on high-certainty strategic businesses. This includes accelerating the expansion pace of Xiaoxiang Supermarket in Q4, and in February 2026, announcing the acquisition of a 717 million USD stake in Dingdong Maicai.

Meituan’s CFO Chen Shaohui stated during the earnings call that the core reason for acquiring Dingdong Maicai is the strong outlook for the development of China’s online and offline fresh produce retail business and to strengthen instant fresh retail supply chain capabilities, expanding and improving coverage in the East China region, which is an important layout for the company’s long-term instant retail strategy. Currently, the acquisition is proceeding according to relevant regulatory procedures.

As the acquisition of Dingdong Maicai continues to unfold, the chain impact this transaction will have on Meituan’s fresh produce segment and the industry landscape is a core focus of external attention moving forward.