JD.com's new ventures, including its food delivery service, have demonstrated staggering cash burn. For every 100 yuan earned last year, the company lost 94.6 yuan. However, founder Liu Qiangdong shows no signs of halting this aggressive investment strategy.
During the earnings call following the release of JD.com's 2025 financial report on March 5, CEO Sandy Xu remarked that total investment in the food delivery business is expected to decrease in 2026 compared to 2025, sparking widespread speculation.
The new business segment, which includes food delivery, reported an annual operating loss of 46.6 billion yuan. This loss nearly consumed the entire annual operating profit of JD's core retail division and caused the group's net profit to halve year-on-year to 19.6 billion yuan.
This massive expenditure of 46.6 billion yuan secured a 15% market share in the food delivery sector. The question remains: what comes next?
Xu's statement seemed to suggest that the company might be scaling back its fight in the food delivery arena. However, such an interpretation might underestimate Liu Qiangdong's resolve.
The substantial loss has not stopped the spending; it has merely been redirected. On February 26, just one week before the earnings release, JD.com quietly launched a new "Billion-Dollar Supermarket" channel, announcing plans to invest over 20 billion yuan in subsidies over the next three years. This move squarely targets dominance in the instant retail market.
This sequence of a major loss followed by a significant new investment sends a clear message: while JD.com may avoid a protracted battle in food delivery, it will not concede defeat in the broader instant retail war.
The market appears to have understood this strategy. On the day following the earnings report, JD.com's stock price surged nearly 10%.
The food delivery business has become JD.com's most capital-intensive endeavor. According to CEO Sandy Xu, because JD's food delivery service was newly launched in 2025, the company made substantial investments in operations, research, and development.
Consequently, JD.com's marketing expenses surged from 48 billion yuan in 2024 to 84 billion yuan in 2025, a 75.1% increase. These expenses rose from 4.1% to 6.4% of total revenue, which the company attributed primarily to promotional activities for new businesses.
Additionally, JD.com's R&D expenses grew by 30.5% year-on-year to 22.2 billion yuan, increasing their share of revenue from 1.5% to 1.7%. Fulfillment expenses also rose by 25.2% to 88.2 billion yuan, accounting for 6.7% of revenue compared to 6.1% the previous year.
The combined spending on R&D, marketing, and fulfillment reached nearly 194.4 billion yuan for the year, yet the returns were startling. The new business segment, including food delivery, generated 49.3 billion yuan in revenue but recorded an operating loss of 46.6 billion yuan. This loss expanded more than 15-fold from 2024 and was nearly equivalent to the 51.4 billion yuan in annual operating profit generated by JD's core retail division.
An operating loss ratio of 94.6% provides a more direct perspective. Simply put, for every 100 yuan JD.com earned, it lost 94.6 yuan. The fourth quarter alone saw a loss of 14.8 billion yuan, a stark contrast to the 900 million yuan loss in the same period of 2024.
In fact, the cash-burning trend for new businesses became apparent starting in the second quarter of 2025, with a single-quarter loss of 14.78 billion yuan, compared to an operating loss of just 695 million yuan in Q2 2024.
This frenzied investment significantly eroded the group's cash flow. JD.com's annual free cash flow plummeted by over 85%, dropping from 43.7 billion yuan in 2024 to just 6.5 billion yuan in 2025.
What did this sacrifice of short-term profitability achieve? According to JD.com, it resulted in growth in user base and market share: 240 million transacting users and a 15% share of the food delivery market. The company aims to increase this share to 30% by 2026, as per its plan.
However, JD.com's figures differ from statistics provided by third-party agencies. A February report by LatePost indicated that the food delivery market has stabilized, with Meituan and Taobao Quick Delivery holding over 50% and 40% market share respectively, while JD.com holds less than 5%.
According to the Hong Kong Economic Journal, a recent J.P. Morgan report, measuring by order volume, stated that Meituan handles 71 million daily orders, commanding a 50% market share. Alibaba follows with a 42% share, while JD.com holds 8%.
The discrepancy in data highlights different perspectives on the competitive landscape. Goldman Sachs predicts the market shares for food delivery and instant commerce will eventually settle into a 5:4:1 ratio among Meituan, Alibaba, and JD.com.
For JD.com's nascent food delivery service, these numbers confirm its presence but also present a harsh reality: climbing from that "1" to a higher position will require an even greater cost than the current 46.6 billion yuan loss. The cash-burn battle has only just begun.
The 46.6 billion yuan loss has not deterred Liu Qiangdong's spending strategy. Instead, the focus of investment has shifted. Liu Qiangdong likely realized that to win the instant retail war, JD.com cannot merely fight on competitors' turf but must leverage its own strengths.
On February 26, the JD.com app discreetly launched the "Billion-Dollar Supermarket" channel. Unlike previous low-key business launches, JD.com publicly announced plans to invest over 20 billion yuan in product subsidies over the next three years, targeting an incremental sales increase of 200 billion yuan.
This marks the first time in nearly two years that JD.com has directed massive subsidies towards the supermarket and department store categories. More notably, the company explicitly stated that the subsidy intensity for these categories would surpass that for its traditional strength in electronics, making it the largest segment within JD.com's "Billion-Dollar Subsidy" system.
This adjustment is both defensive and offensive, with the sole aim of seizing leadership in instant retail. Just one month prior, Meituan spent $717 million (approximately 4.9 billion yuan) to fully acquire Dingdong Maicai's China business.
This transaction involved an episode awkward for JD.com. Sources close to the matter revealed that JD.com had reached a preliminary acquisition agreement with Dingdong Maicai in early January 2026, with a price tag between 5-6 billion yuan, needing only final approval. However, Meituan ultimately succeeded with a higher offer, intercepting the deal.
Some market commentators noted that "JD.com's offer was low, and its decision-making was slow." Losing Dingdong Maicai was costly for JD.com. Dingdong possesses over 1,000 front-end warehouses and 7 million monthly active users, with a dominant position in the Yangtze River Delta region. Meituan's own "Xiaoxiang Supermarket" reported a GMV of nearly 30 billion yuan in 2024, with close to 1,000 warehouses and 50% of its orders concentrated in Beijing and Shenzhen. By acquiring Dingdong, Meituan instantly strengthened its position in the Yangtze River Delta, solidifying its hold on the three key cities of Beijing, Shanghai, and Shenzhen.
Some analysts commented that "Meituan spent 4.9 billion yuan on a defensive insurance policy, effectively kicking JD.com off the negotiating table." JD.com's response was swift—the "Billion-Dollar Supermarket" launched just one month later.
Furthermore, Meituan is not the only competitor eyeing the supermarket sector. In January of this year, Pinduoduo began low-key internal testing of its own "Billion-Dollar Supermarket" channel. Screenshots from test users showed it covering high-frequency, essential categories like fruits, vegetables, and household goods. As the pioneer of the "Billion-Dollar Subsidy" model, Pinduoduo successfully used it to penetrate the online 3C electronics market, grabbing market share from JD.com and Tmall.
Internet giants are unanimously igniting competition in the supermarket sector. E-commerce analyst Li Chengdong's observation highlights the deeper logic behind JD.com's adjustment. In his view, while last year's food delivery war significantly impacted the instant retail landscape, from a strategic efficiency standpoint, "it is better to directly subsidize the core instant retail business rather than burn money on the food delivery track."
From burning billions on food delivery to investing 20 billion yuan in supermarkets, JD.com's path is changing, but the destination remains the same: securing a leading position in instant retail in the era of "everything delivered to your door."
However, this battle is exceptionally challenging on both fronts. The food delivery battlefield is difficult. According to a LatePost report, Alibaba's core management stated unequivocally in an internal meeting in early 2026 that they would continue to increase strategic investment in Taobao Quick Delivery, encouraging the team to push forward boldly and "not be burdened by losses for three years." Alibaba founder Jack Ma internally defined Taobao Quick Delivery as a "milestone battle for the group."
This signifies that in the food delivery arena, JD.com faces an opponent that will not retreat due to losses. Taobao Quick Delivery's investment in 2026 is set to comprehensively exceed that of the previous year, with clear goals: focus on high-average-order-value meals (over 30 yuan) and achieve breakthroughs in specific instant retail categories one by one. Meanwhile, Meituan has just spent 4.9 billion yuan to acquire Dingdong, filling its gap in the Yangtze River Delta.
JD.com's 46.6 billion yuan expenditure bought a 15% market share, which must now grow while squeezed between Meituan (over 50%) and Alibaba (over 40%). On this battlefield, there is no room for retreat.
The supermarket battlefield is equally daunting. Hema's discount format "Super Value NB" is expanding rapidly, opening seven new stores in just two months. Meituan's community hard-discount brand "Happy Monkey Supermarket" entered the South China market earlier this year and has since established locations in Beijing's Changping, Fangshan, and Miyun districts, with plans to open three stores in Ningbo.
Notably, competition is already direct. In Beijing's Mentougou district, a Meituan Happy Monkey Supermarket and a JD.com Discount Supermarket are located just a five-minute drive apart, competing for the same price-sensitive customers within the same community.
Traditional players are also fighting back. Yonghui Superstores is undergoing a transformative "self-revolution," closing nearly 400 stores and renovating over 300 existing stores with a "Pang Donglai-style" overhaul. Wumart has already completed similar renovations at 43 stores.
Perhaps more formidable than any competitor are the inherent challenges of the supermarket business itself. Consumers demand cost-effectiveness, quality, and novelty simultaneously. As industry insiders note, achieving "more, faster, better, and cheaper" in the non-standardized, low-margin, high-wastage supermarket category is akin to solving an "impossible quadrilateral."
The 20 billion yuan in subsidies is merely the beginning. On the instant retail track, no player can expect an easy victory. For JD.com, which has just entered the race, this tough battle has only completed its first half.
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