A recent report by QuestMobile has highlighted a significant shift in China's local services and e-commerce battle, revealing competitive pressures on Meituan. The report, focusing on 2026 local consumption trends, contained a notable data point concerning Douyin's independent application "DouShengSheng," launched on February 10. By May 10, its daily active users had surged to nearly 16 million. Achieving 16 million DAU from zero in just three months is striking, especially as the app targets Meituan's profitable core segment: in-store group buying deals. Industry speculation suggests Douyin's local services arm aims to surpass Meituan's in-store transaction volume by 2026. More remarkably, the gap between the two had already narrowed to less than 25% by 2025.
Data from the merchant side is equally revealing. The monthly active users for Meituan's merchant app for food delivery reached 17.113 million, growing at a modest 3.4%, indicating it may be nearing saturation. In contrast, Taobao's Quick Purchase merchant app saw MAU of 8.439 million with a 30.4% growth rate, while JD.com's Instant Delivery merchant app, with an MAU of 3.265 million, exploded with 71.0% growth. Although starting from a smaller base, these growth rates underscore an intense, ongoing battle for merchant supply.
The local services war has not subsided after the initial wave of subsidies but has instead evolved into a more brutal, trench-based conflict fought over every city and district. According to QuestMobile data up to March 2026, the comprehensive e-commerce sector boasted 1.095 billion MAU, with local services at 569 million, food services at 189 million, and fresh produce e-commerce at 137 million. The market is too vast for any player to ignore.
The most significant change, however, lies not in the market size but in the fundamental shift in strategy and user behavior. The report frequently mentions "user mindset elevation." In simpler terms, users no longer view instant retail merely as a tool for ordering takeout. The clearest evidence is the change in overlapping user numbers across the three major apps—Taobao, JD.com, and Meituan. This overlap reached 378 million at the peak of the subsidy war in September 2025 before settling at 361 million as subsidies eased. This shift indicates a permanent change in user perception; instant retail is now seen as a comprehensive consumption portal. Users can order food on Taobao, buy fresh produce on JD.com, and browse group deals on Meituan, reducing loyalty to any single platform.
This evolution is particularly critical for Meituan as it strikes at the company's core business. The emergence of Douyin places Meituan under pressure from multiple fronts, effectively breaching its moat from two directions.
On the main battlefield, the strategic paths of Alibaba, JD.com, and Meituan have diverged clearly. Alibaba is pursuing an ecosystem synergy model, building a "grand consumption platform." Taobao's app had an MAU of 957 million in March 2026, with a modest 0.6% year-on-year growth. However, monthly average usage per user surged to 69.4 times, up 10.9% year-on-year. This deep integration of food delivery is reshaping user behavior on Taobao, transforming it from a pure shopping destination to a platform for ordering food and exploring local services.
JD.com is focusing on a quality food delivery and self-operated store model. Its app reached 598 million MAU, growing 8.6% year-on-year, with monthly usage per user at 37.2 times, up 13.6%. JD.com's strategy leverages its 7Fresh supermarkets as forward warehouses, deploying a capital-intensive "1 central store + N satellite store" model to offer premium 30-minute delivery services. Both Taobao and JD.com also saw significant spikes in new user installations during certain months last year.
Meituan has not been idle, launching initiatives like Flash Warehouses to strengthen offline fulfillment, introducing "Raccoon Canteen" for quality food delivery, and promoting dual-brand forward warehouse services with "Elephant Supermarket" and "Happy Monkey." These are sound strategic moves. However, the most challenging aspect for Meituan is the shift from being an aggressor to playing defense.
The supply-side data further illustrates the competitive intensity. The number of merchants using all three major platforms reached 2.673 million, a staggering 192.8% year-on-year increase. This means roughly two out of every three merchants are operating stores on all three platforms simultaneously. Omnichannel operation is no longer an option but a standard requirement.
A similar trend is observed among delivery riders. Meituan's crowd-sourced delivery platform leads with nearly 8 million MAU, but the number of riders concurrently using apps from Meituan, Alibaba's Fengniao, and JD.com's Instant Delivery is rising. This increased overlap in delivery networks reduces each platform's exclusive control over rider capacity.
Enter Douyin's "DouShengSheng," which represents a distinct flanking maneuver. Douyin's approach to local services is entirely different. It does not need to build flash warehouses, forward warehouses, or maintain a massive fleet of riders. Its strategy revolves around one core action: redirecting its vast traffic. The main Douyin app serves as a traffic engine and a content discovery field. Users are introduced to restaurants, dishes, or deals through short videos. Previously, transactions might have happened within the main app. Now, Douyin has externalized this transaction chain into a standalone app, DouShengSheng.
The user profile of DouShengSheng is particularly telling. Its core user base for in-store group purchases—females, post-90s generation, and users in higher-tier cities—mirrors that of Meituan's Dianping. However, DouShengSheng shows a stronger focus on lower-tier markets, with users from second-tier cities and below comprising 67.3% of its user base. This下沉市场 is precisely the solid foundation Meituan has built over recent years. Thus, Douyin is not confronting Meituan head-on but is instead encircling it, gradually eroding Meituan's core user base. This combination of using content for traffic, a standalone app for transaction closure, and targeting下沉市场 for growth is a precise and effective strategy.
Adding to Meituan's concerns, industry sources indicate Douyin's local services target for 2026 is to exceed Meituan's in-store business transaction volume. With the gap already below 25% in 2025, it seems only a matter of time before Douyin catches up, given its current growth trajectory. Contrasting DouShengSheng's rapid rise to 16 million DAU, the MAU growth rate for Meituan's Dianping app has moderated to 11.4%.
Returning to the fundamental question: why has Meituan's market capitalization declined by 40%? It is not because the food delivery business is failing. Food delivery remains a high-frequency entry point, as evidenced by Taobao's 69.4 and JD.com's 37.2 monthly uses per user in March 2026, largely driven by their delivery services. Meituan itself recorded 49.2 monthly uses per user. The high-frequency demand persists; it is simply no longer exclusive to Meituan.
The root cause is the reversal of strategic positions. Meituan has shifted from the aggressor to the defender, from enjoying user exclusivity to facing cross-platform diversion, and from having a stable supply-side moat to confronting mobile merchants and riders. These combined changes point to a deeper issue: Meituan's narrative has transformed from that of a high-growth, offensive company to one entrenched in a defensive battle. Financial markets are not inherently afraid of defensive battles; their concern arises when a company is forced into a defensive position while its competitors are successfully executing flanking maneuvers to capture its core market.
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