Now that the food delivery war is over, has Meituan's moat become thinner?

Which is the toughest major company in China's internet industry in 2025? This question might have different answers for everyone, but if such statistics really existed,Meituan must surely rank among the top three。

At the beginning of last year, JD.com was the first to 'launch a campaign,' with Richard Liu personally delivering food dressed as a delivery rider, and pushing five insurances and one fund across the web. Public opinion exploded. Shortly after, Alibaba 'joined the battle,' taking instant retail subsidies to unprecedented levels, and the entire industry's daily average orders once surged past 150 million. Amidst the fierce competition among the three players, products like one-fen milk tea, zero-yuan food deliveries, and three-yuan coffees appeared, even prompting some users to joke that the low-priced milk tea nearly gave them diabetes.

Meituan's management publicly called for an end to irrational competition six or seven times, but to no avail. What constitutes rational competition will not be discussed here. However, objectively speaking, food delivery is a business with only a 3% profit margin, earning just over one yuan per order. This thin-margin business was disrupted by subsidy wars. Although Meituan earned 13.49 billion yuan in Q1, by Q3, half a year later, it plunged into a loss of 14.07 billion yuan, forcing it into its largest quarterly loss since going public.

But despite the difficulties, if we look at the entire year, the intensity of investment in this round of competition between food delivery and instant retail has been very high. According to data cited by Economic Daily from financial reports, the cumulative investment by the three platforms during the food delivery war reached a considerable scale.

Against this backdrop, Meituan's core local commerce business recorded only relatively limited operating losses for the whole year, a result that is quite admirable.

Rather than simply comparing the scale of investment or losses of each company, it is more important to recognize the differences in fulfillment efficiency and unit economic models across various platforms, which are the true dividing lines in long-term competition.

Moreover, Meituan maintained over 60% of its GTV share, and its moat in the mid-to-high ticket dining market remains solid. Its total annual revenue increased by 8.1% to 364.85 billion yuan. Looking back, Wang Puzhong’s statement in an interview wasn’t empty talk: Not only could we keep up, but we did so using far fewer resources than they did.”

Just a day before the earnings report, Economic Daily published an article titled 'The Food Delivery War Should End,' which was reposted by the State Administration for Market Regulation. On the day of the earnings release, the State Administration held its first corporate fairness symposium of 2026, inviting multiple companies including Meituan to discuss further measures to address 'internally competitive' practices. Judging from the regulatory signals repeatedly sent out, such intense competition in the food delivery industry in 2025 is unlikely to be sustainable.

Meituan has defended its stronghold, and the whistle has blown on regulation. But throughout the year, there were still many noteworthy lessons worth reviewing and studying.

01 Holding fast to the food delivery fortress

In this food delivery war, Meituan is considered by the market to be on the defensive. However, being on the defense doesn’t mean sitting idle and taking hits; looking at the numbers across four quarters reveals a very clear rhythm of control.

In 2025, Meituan's total annual revenue reached 364.85 billion yuan, an increase of 8.1% year-over-year. Both the number of transaction users and consumption frequency hit record highs. Maintaining growth in a year of being surrounded on three sides was no small feat. Of course, there were costs: the core local commerce segment incurred a full-year loss of 6.9 billion yuan, with the group recording a net loss of 23.35 billion yuan. However, analyzing the quarterly profit data shows that losses in the core business have been effectively controlled.

The core local commerce segment earned 13.49 billion yuan in Q1, dropped to 3.72 billion yuan in Q2, plunged into a loss of 14.07 billion yuan in Q3, and narrowed significantly to a loss of 10.05 billion yuan in Q4. The curve resembles the left half of a V-shape that has already formed, while the right half is just beginning, indicating the worst is over. For the full year, the group’s net loss was 23.35 billion yuan.Logically, Q4 marked the tail end of the battle combined with concentrated overseas investments, showing that overall momentum is improving.。

The marketing expenses also demonstrate a shift in momentum. At its peak in Q3, the company burned through 34.27 billion yuan, but actively reduced it to 31.73 billion yuan in Q4, cutting 2.5 billion sequentially. It is worth noting that by Q4, Meituan had already eased off on subsidies ahead of recent regulatory warnings, likely anticipating the turning point after Q3 losses peaked.

Overall, Meituan's current financial performance is particularly commendable given the intense competition in the food delivery market. More importantly, regardless of how it’s measured, theirmost valuable portion of market share remains intact.。

According to the company’s earnings report, based on Gross Transaction Value (GTV), Meituan maintained a market share above 60%. Additionally, according to JPMorgan's data from November 2025, Meituan held 50% of the order volume share, Alibaba accounted for 42%, and JD.com stood at 8%. A more than ten-point difference between the two metrics suggests that challengers gained more in low-ticket items like tea and coffee orders, while Meituan still holds a higher position in consumers' minds in the mid-to-high-priced meal market.

Moreover, both the number of transaction users and consumption frequency reached all-time highs this year. Combined efforts from three major players pushed daily orders from less than 100 million pre-war to 150 million, fully educating consumers about 'everything delivered to your door.' Goldman Sachs’ latest tracking data from March this year shows that the daily order ratio stabilized at approximately 5:4:1.Meituan still holds the top position。

Subsidies are not about who has more money, but about who spends it wisely. In an interview, Wang Puzhong once said: 'When everyone is aggressively handing out coupons, the type of coupon, the quantity, and who they are given to all matter—this is collectively known as the ability to manage subsidies, which we have honed over nearly a decade.'

Looking back, this battle may seem like a fight for market share on the surface, but its most profound impact goes beyond the share of food delivery itself. Three far-reaching and irreversible changes emerged:

First, the industry's safeguards have been significantly upgraded. Few people noticed that Meituan has continuously increased its investment in rider benefits, becoming the first platform in the industry to extend pension subsidies to all riders nationwide. Add to that the strong push for 'transparent kitchens' and the substantial investment in the food safety governance model 'Starry Gaze,' among others. These measures won’t disappear just because subsidies stop—they permanently raise the cost floor and competitive threshold of the entire industry.

Second, the competition to increase warehouse density was ignited earlier than expected. Before the food delivery war, people considered front warehouses a tough business, with companies wavering in their commitment. Once the battle began, all players realized that without warehouses, there would be no '30-minute delivery' experience, and without that experience, users couldn’t be retained. This forced them to pour vast sums into warehouse networks. As a result, the infrastructure threshold for instant retail rose by another level compared to pre-war conditions, doubling the fixed asset investment required for newcomers.

Finally, service standards cannot be rolled back. Users now expect 30-minute deliveries, and merchants have been pulled into providing full-category instant delivery. No one can lower service levels; if they do, users will leave. Ultimately, the battle objectively expanded the overall instant retail market, even teaching elderly people in fifth- and sixth-tier cities how to order groceries online.

The challengers spent hundreds of billions helping the leader educate the market, fast-tracking user habits that would have otherwise taken Meituan three to five years to cultivate on its own within just one year.This is the biggest outcome of the 2025 food delivery war, and it is also the premise for understanding Meituan’s upcoming strategic choices.

02 Growth lies beyond food delivery

Everyone’s attention is fixated on those few percentage points of food delivery market share, on who issued what coupons or who offered coffee for a few yuan. No one looks at what Meituan is doing elsewhere. Yet, these efforts may prove more important than market share when reviewed three to five years from now.

Little Elephant Supermarket, Flash Warehouse, and Keeta appear to be scattered across different business units on the surface, but when viewed together, it becomes clear that Meituan is pursuing the same goal—Transitioning from a food delivery company to an instant retail infrastructure provider.。

By the end of the year, Little Elephant Supermarket had expanded to cover 39 cities, with its private-label product categories and Gross Transaction Value (GTV) share both increasing. It’s no longer just a grocery delivery service. Coupled with the $717 million acquisition of DingDong in February this year, if the deal goes through, Meituan will establish the densest instant retail supply network in the country.

Shaohui Chen clearly explained the acquisition rationale during the earnings call: first, to strengthen supply chain capabilities; second, to fill the coverage gap in Eastern China. DingDong has deep roots in Jiangsu, Zhejiang, and Shanghai, while Little Elephant dominates in the North. The merger of these two networks significantly enhances service quality and geographic reach. It’s evident that the key point of this transaction is to buy time—building a presence in Eastern China from scratch would take at least two to three years. By spending money to acquire an existing network, the saved time becomes a competitive barrier.

While rolling out its self-operated warehouse network, the ecosystem for third-party supply continues to expand.

By Q2 2025, Flash Warehouse plans to have 50,000 locations nationwide, with over 1,000 brands having set up official flagship stores. The expansion from delivering meals to delivering almost anything is accelerating—now, you can purchase items such as alcohol, medications, digital accessories, and even pet supplies on Meituan, many of which were previously only bought on e-commerce platforms.

In short, warehouses need to be densely distributed for the promise of 30-minute delivery to be meaningful. But delivery speed alone isn’t enough; users need compelling reasons to open the app, which cannot solely revolve around food.Expanding categories beyond food to everything naturally increases user engagement frequency.。

As domestic strategies prove successful, the ability to replicate this model abroad becomes a more critical consideration for the market.

Keeta launched in Hong Kong in May 2023 and entered Saudi Arabia in September 2024. In the second half of 2025, it expanded into Qatar, Kuwait, the United Arab Emirates, and Brazil. It took about two and a half years for Hong Kong operations to break even, but Saudi Arabia will achieve this much faster. During the earnings call, Wang Xing stated, 'Definitely by the end of this year,' and added that they are 'already very close.'

A more critical detail is that despite Keeta significantly cutting subsidies in Saudi Arabia, order volumes have remained resilient: this means users stay because of service quality, not because it's cheap. Operating data from Saudi Arabia also confirms this: covering 23 cities, partnering with over 50,000 restaurants, 38,000 delivery riders, accumulating over 150 million orders completed, with an average delivery time of 30 minutes.

These expansions certainly don’t come for free. The combination of overseas city launches, the expansion of Xiaoxiang, and the winter headwinds for shared bikes caused the Q4 operating loss for new businesses to jump to 4.65 billion yuan, which looks alarming, but this is entirely different from the logic behind losses during the food delivery war. Management provided clear guidance during the earnings call: by 2026, the overall losses of the new business division will not exceed those of 2025.In other words, while overseas markets are still burning cash, improvements in domestic new business efficiency will offset the additional costs.。

The intervention of regulators holds significant meaning for Meituan—not because the 3% profit margin on food delivery has returned; a business earning one yuan per order was never highly profitable. What’s truly been unlocked is financial flexibility and strategic room. With 166.9 billion yuan in cash and short-term investments at year-end, all resources had been forced to focus on defending the food delivery business during the war, whereas now, instant retail and overseas expansion can proceed without restraint.

03Conclusion

Wang Xing also revealed a forward-looking signal during the earnings call: by Q1 2026, the losses per food delivery order compared to Q4 will see a “more meaningful quarter-on-quarter improvement.” A year ago, the core question for Meituan was whether it could hold on, and now that question has been answered.

The anchor point for how the market prices Meituan will shift from 'how much did the food delivery war cost' to 'how quickly will profits recover' and 'how much are the second growth curves worth?' The 104 billion yuan in new business revenue, the densest warehouse network domestically, Keeta’s overseas expansion, and its profit recovery—these assets are currently undervalued by the market, but investors will eventually reassess their worth.

What was burned into the industry’s bones during the food delivery war—social security, warehousing networks, fulfillment standards—won’t disappear just because subsidies stopped. They’ve become the new foundation.A company that can emerge standing tall from such intense competition deserves to be reassessed.。 $MEITUAN-W (03690.HK)$

Disclaimer: This article is intended for learning and communication purposes only and does not constitute investment advice.

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