Meituan has released its financial results for the first quarter of 2026. The report shows the company achieved revenue of 91 billion yuan for the quarter, representing a year-on-year increase of 5.6%. The operating loss was significantly reduced to 6.5 billion yuan from 16.1 billion yuan in the previous quarter, marking a sequential reduction of 9.6 billion yuan that exceeded market expectations. The core local commerce segment saw its operating loss narrow to 2 billion yuan, a substantial improvement from the 10 billion yuan loss in Q4. Losses from new initiatives also narrowed significantly to 2.1 billion yuan from 4.6 billion yuan in the prior quarter.
Against a backdrop of increasingly rational industry competition, Meituan has delivered a high-quality report card to the market, characterized by a loss reduction that surpassed forecasts, a continuously expanding lead in unit economics for its food delivery business, and an operating loss that is a mere fraction of its rivals'. Concurrently, the company is accelerating the implementation of its "Physical AI" strategy in real-world scenarios under its broader "Retail + Technology" vision. The recent successful listing review of its portfolio company, Unitree Robotics, further highlights Meituan's forward-looking positioning and strategic resolve in the AI era.
First Quarter Loss Reduction Surpasses Expectations, Losses a Fraction of Rivals', UE Lead Widens with Over 60% GTV Share
At the beginning of 2025, JD.com entered the food delivery arena with high-profile subsidies worth tens of billions, while Alibaba upgraded Ele.me to "Taobao Flash" and followed with its own massive subsidy plan, creating a three-way competitive landscape with Meituan. This led to a year of intense, arguably irrational, competition within the industry. The three platforms collectively burned through subsidies amounting to hundreds of billions, with total industry subsidies approaching 200 billion yuan for the year. Under these conditions, investment banks had previously estimated Meituan's core local commerce operating loss would be around 4-4.5 billion yuan, with new initiative losses around 2.6 billion yuan.
However, Meituan's Q1 2026 loss reduction significantly outperformed these market expectations. The company's revenue reached 91 billion yuan, up 5.6% year-on-year, while the operating loss shrank to 6.5 billion yuan from 16.1 billion yuan last quarter. Specifically, the core local commerce operating loss was 2 billion yuan, a sharp decrease from 10 billion yuan in Q4, and new initiative losses narrowed to 2.1 billion yuan from 4.6 billion yuan.
In contrast, the losses from Meituan's food delivery business were described as "not even a fraction of its competitors'". Alibaba's financial report for January-March 2026 showed its China commerce EBITA decreased by 15.7 billion yuan year-on-year, largely in line with investment bank estimates of a 17-18 billion yuan loss for its instant retail business in Q1. JD.com's new business revenue for Q1 was 6.3 billion yuan, a modest increase of 600 million yuan year-on-year, but its losses ballooned to 10.3 billion yuan, 9 billion yuan more than the year before, aligning with bank estimates of 9-10 billion yuan in losses for its food delivery segment.
This outperformance in loss reduction for both core and new businesses, resulting in a loss scale dwarfed by rivals, is a concentrated reflection of Meituan's ongoing efforts in refined operations and cost control within the instant retail sector.
On one hand, its food delivery business has continuously optimized order structure and fulfillment efficiency through innovative supply models like "Brand Satellite Stores" and "Pin Hao Fan," solidifying its advantage in the mid-to-high customer ticket market and further widening the unit economics gap with competitors. On the other hand, Xiaoxiang Supermarket expanded to 55 cities, effectively improving product gross margin by deepening its supply chain and increasing the proportion of private labels. Keeta saw significantly improved operational efficiency in Hong Kong and Saudi Arabia due to scale effects and refined operations, while maintaining strong growth in other Middle Eastern regions and Brazil.
Leveraging its healthy user base and efficient delivery force调度, Meituan has maintained over 60% of the Gross Transaction Value (GTV) share with a loss level far lower than its competitors, once again demonstrating its formidable moat in the mid-to-high customer ticket market.
Physical AI Strategy Accelerates Implementation: Parallel Pursuit of In-House R&D and Strategic Investments
The development of the AI industry follows a historical pattern of "infrastructure first, followed by applications and entry points." The first wave of gains from the "infrastructure/pick-and-shovel" layer has already occurred, with the next wave of红利 shifting towards the "compressors" and "gatekeepers." Pure application-layer ventures without data moats, traffic inlets, or hardware forms will struggle to survive. The real opportunity ultimately lies in serving tangible user needs like food, clothing, housing, and transportation. The ultimate winners will be the "gatekeeper" platforms that can orchestrate models and connect to the physical world.
Following this logic, Meituan continues to increase its R&D investment. In Q1 2026, its R&D expenditure grew 22% year-on-year to 7 billion yuan, accounting for 7.7% of total revenue. CEO Wang Xing stated clearly, "We will continue to increase our investment in AI, continuously iterate on AI Agent and large language model capabilities to better enhance the real-world experience for consumers."
In terms of large models, in April 2026, Meituan opened its next-generation model, LongCat-2.0-Preview, for testing. The model's total parameter scale exceeds one trillion, with training and inference entirely reliant on domestic computing clusters. Based on LongCat, Meituan upgraded its AI assistant "Xiao Tuan," which served over 100 million users during the May Day holiday. Simultaneously, a collaboration between Meituan's AI assistant "Xiao Mei" and Tencent's "Yuanbao" is set to launch soon, allowing users to directly input requests in "Yuanbao" to access local services like food delivery via "Xiao Mei."
On the merchant side, Meituan is committed to "helping every merchant use their own AI assistant." The "Intelligent Shopkeeper" for the in-store dining industry has served over 700,000 merchants, while the "Digital Employee" for the service retail sector covers more than 300,000 merchants, continuously helping small and medium-sized businesses reduce costs and increase efficiency.
Regarding AI hardware, in May of this year, Meituan's drone-built "Urban Low-Altitude Network" entered regular operations and opened for industry-wide collaboration. Currently, Meituan's drone delivery service operates routinely in several cities including Beijing, Shanghai, Shenzhen, Hong Kong, and Dubai, having completed over 900,000 commercial orders, ranking second globally.
In external investments, Meituan's technology portfolio is beginning to yield significant value. On June 1st, the humanoid robotics star company Unitree Technology underwent its listing review for the STAR Market, aiming to raise 4.202 billion yuan. Based on a public offering of no less than 10%, the overall valuation is estimated at around 42 billion yuan. The prospectus reveals that the Meituan-affiliated entities are the largest external shareholders in Unitree, holding a combined 9.65% stake. Meituan had already led the investment in Unitree's Series B2 round when its valuation was merely 1 billion yuan.
From developing the domestically-built trillion-parameter model LongCat, to AI assistants "Xiao Tuan" and "Xiao Mei" serving consumers, to "Intelligent Shopkeeper" and "Digital Employee" helping 700,000 merchants; from the regular operation of its urban drone network, to investing in over 28 tech unicorns including Unitree and Zhipu AI—Meituan is using "Physical AI" as its anchor, capturing the红利 from infrastructure to application gateways, and embedding AI capabilities into every real-world scenario of local life.
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