Despite facing intense pressure from rivals burning through cash, Meituan managed to defend its 60% market share with minimal losses, weathering each competitive wave with its own disciplined approach.
"We not only kept pace but did so using far fewer resources than them," stated Wang Puzhong, CEO of Meituan's Core Local Commerce, last summer. Many dismissed this as bravado at the time. A year later, financial results revealed Meituan's Core Local Commerce segment reported a loss of 6.9 billion yuan, while its competitor's losses were twenty times greater.
The three major platforms collectively incinerated over 150 billion yuan in the food delivery war, a conflict with no clear victor. However, Meituan successfully maintained its 60% market share, saw its user base grow throughout the contest, and its cash reserves remained largely untouched.
How was this achieved? According to Wang Puzhong, the timing, targeting, and amount of coupon distribution are strategic skills honed by Meituan over a decade.
As the battle reached this point, regulators intervened to call a halt. Commentary suggesting "the food delivery war should end," amplified by an official repost, caused Meituan's stock price to surge by 14%. This rally was driven not by current performance but by improved market expectations.
Meituan's year of endurance was not in vain. By minimizing its resource consumption, it has secured the breathing room needed for strategic deployments. Initiatives in instant retail, international expansion, and AI, long in development, can now be advanced with renewed focus and resources.
"Burning cash" is not a universal solution. Over the past year, the food delivery industry burned through more than 150 billion yuan. To put this in perspective, based on an average industry profit margin of 3%, this sum equates to the total profits the entire industry would generate over five years. Platforms heavily subsidized items like milk tea and burgers, with "1-cent milk tea" promotions leaving young consumers astonished.
The contest became less about winning and more about which player would buckle first. Meituan was forced to respond defensively. Facing aggressive subsidies from competitors, inaction would have meant losing market share, while reckless matching could have dragged it into a financial abyss. It chose the most challenging path: to match competition strategically, not indiscriminately.
According to J.P. Morgan research data from November 2025, based on order volume, Meituan, Alibaba, and JD.com held market shares of 50%, 42%, and 8%, respectively. Crucially, in terms of Gross Transaction Value (GTV), Meituan consistently maintained a share exceeding 60%.
Simultaneously, Meituan established a dominant position in higher-value, more profitable market segments. It accounted for over two-thirds of orders where the actual payment exceeded 15 yuan and over 70% of orders above 30 yuan. This indicates that while competitors fought for users with low-price subsidies like "1-cent milk tea," Meituan secured the core, profit-generating customer base.
Notably, amidst the fierce subsidy battle, Meituan's fundamental user base expanded rather than contracted. Meituan's 2025 financial report disclosed that both annual transacting users and user purchase frequency hit record highs over the past year. By the third quarter, Meituan's 12-month transacting user count had already surpassed 800 million.
Regarding losses, Meituan's full-year Core Local Commerce loss of 6.9 billion yuan appears remarkably restrained compared to peers. During the same period, JD.com's report showed its new business segment, led by food delivery, incurred a loss of 46.6 billion yuan. Market analysts estimated Taobao Quick Purchase's annual loss exceeded 80 billion yuan. Roughly calculated, Meituan's losses were only about one-twentieth of its rivals'.
Why such a stark difference in outcomes despite all parties spending heavily? The answer lies in Wang Puzhong's explanation. In a July interview with LatePost, he stated, "When everyone is aggressively issuing coupons, the type of coupon, the amount, and who receives it—these all involve methodology, collectively known as the capability to execute subsidies. This is something we have developed over nearly ten years."
The same one-yuan subsidy yields vastly different results depending on the target recipient, timing, and method. Meituan's subsidy strategy, built on years of accumulated user profiles and transaction data, ensures each cent drives higher order conversion.
A deeper competitive moat lies in its fulfillment network and merchant resources. Meituan's daily order volume far surpasses competitors, allowing its cost per order fulfillment to be diluted to the industry's lowest level. Furthermore, its long-cultivated relationships with mid-to-high-end餐饮 merchants form a firewall difficult for rivals to breach quickly.
This year, Meituan endured. Its success relied not on luck but on systemic capabilities built over a decade. Under pressure from rivals' cash-burning, it avoided panic and passive defense, instead weathering each assault with its own strategic rhythm.
As Meituan demonstrated its resilience, the external environment began to shift. Competitors collectively burned through hundreds of billions but failed to shake Meituan's core position. Conversely, Meituan's cost for a year of competition was only a fraction of its rivals'. Continuing the fight likely meant a stalemate: Meituan holding its ground, opponents unable to break through, and all sides continuing to bleed resources. The battle's significance subtly transformed; it became less about victory and more about endurance.
It was at this juncture that regulators stepped in. The day before Meituan's earnings release, the Economic Daily published a commentary titled "The Food Delivery War Should End," which was subsequently reposted by the State Administration for Market Regulation (SAMR).
This news triggered a 14% surge in Meituan's stock price, lifting the Hang Seng Tech Index, with investors celebrating the development on social media. The market clearly interpreted this as a positive shift in expectations: regulatory guidance signaled an end to the cash-burning contest and a return to normalized industry competition.
This wasn't the regulator's first statement on disorderly competition in the food delivery sector. As early as Q3 2025, SAMR had summoned major platforms, instructing them to avoid vicious below-cost competition. However, the reposting of an official media commentary carried stronger signaling power—not merely mediation but a clear correction of a destructive business model.
Why the intervention? Because the price war had transcended "platform competition" and begun to harm the entire餐饮 ecosystem. With industry profit margins already low (averaging around 3%), subsidies reaching "1-cent milk tea" levels placed immense pressure on餐饮 businesses first.
A restaurant owner illustrated this on social media: a milk tea costing 8 yuan to produce is sold for 1 yuan after platform subsidies, with the merchant bearing a 2-yuan loss and the platform subsidizing 5 yuan. Superficially, the merchant loses only 2 yuan, but factoring in packaging, labor, and platform commissions, the actual loss is much higher. To survive, merchants might compromise on ingredients—replacing fresh milk with creamer or real fruit with concentrate.
This "bad money driving out good" effect ultimately reaches consumers, who may believe they are getting a bargain but receive a lower-quality product. More seriously, as the entire餐饮 industry is forced into low-price competition, the survival space for small and medium merchants shrinks, and the sector's innovation momentum and service quality decline.
From a macro perspective, this runs counter to central government efforts to boost consumption. Consumption upgrade requires high-quality goods and services, not illusions of low prices created by burning cash. If餐饮 businesses are trapped in a "die without subsidies, chaos with subsidies" dilemma, with industry profits squeezed dry, how can consumption recovery be achieved?
The Economic Daily commentary was blunt: "Healthy competition should be a良性 contest of technological innovation, efficiency improvement, and service optimization, not a cash-burning game reliant on capital."
The regulatory intervention also ensured Meituan's year of endurance was not wasted. Had the war continued, even if Meituan held its ground, it would remain mired in the price war, unable to focus elsewhere. Now, competition returns to a playing field where it excels: competing on efficiency, service, and technology. Meituan endured to gain a fairer competitive arena.
What will this hard-won breathing room be used for? Regulation has intervened, the food delivery war is cooling, and Meituan has survived. But the true meaning of "not enduring in vain" extends beyond defending market share and awaiting a better environment. Through this year's消耗, it gained the most valuable asset: the space to布局从容 (deploy strategically).
Financial reports show that as of the end of 2025, Meituan's cash and cash equivalents remained near 170 billion yuan, essentially unchanged year-on-year. While rivals burned through hundreds of billions, Meituan's core financial foundation was barely touched.
It emerged from this war of attrition with its treasury intact. Where does it go next? Looking back, three initiatives have continued uninterrupted, predating the food delivery war and destined to outlast it.
Instant retail is one. Ele.me's "Little Elephant Supermarket" has expanded to 39 cities, deepening its supply chain, with its fresh produce quality ranking highly. New models like brand flagship flash warehouses and self-operated前置仓 are extending the "30-minute delivery for everything" concept from meals to groceries and electronics. In February, Meituan invested $717 million to acquire Dingdong Maicai, bolstering its presence in East China and gaining a mature fresh produce supply chain.
In 2025, Meituan's New Initiatives segment revenue surpassed 100 billion yuan, reaching 104 billion, a 19% year-on-year increase. Meituan's second growth curve is gradually taking shape.
Another front is international expansion. Keeta is progressing steadily. Starting in Hong Kong, it has now entered several major Gulf countries in the Middle East and recently launched in Brazil. In Hong Kong, a profitable model was finally achieved in Q4 last year. Orders in Saudi Arabia are growing rapidly, with good user口碑. Expansions into Qatar, Kuwait, and the UAE in the latter half of the year have had decent starts. Wang Xing's directive is clear: international expansion should be resolute but not盲目.
The third focus is AI. In the latest earnings call, Wang Xing stated, "In the AI revolution, the only reasonable strategy is offense, not defense." These are not empty words. Meituan has been investing heavily in AI for over three years. Wang Xing revealed that capital expenditure and AI talent investments began in early 2023. "Excluding companies with cloud computing businesses, Meituan's AI investment scale is likely the largest among domestic enterprises, and we have persisted with this布局 for over three years."
Many observers first look at the账面 gains from Meituan's AI investments. Li Auto generated over HKD 10 billion in gains, the stake in智谱 is valued over 10 billion, and宇树科技, based on its IPO prospectus, had a market cap of 4 billion yuan pre-listing, expected to multiply afterward. Meituan's name appears on the shareholder lists of a significant portion of China's AI unicorns.
However, Meituan's goal with its heavy AI investment is not solely financial return. Wang Xing's internal comments are more revealing: "The digitization of the physical world will be a very important foundation for AI. Even if Einstein were your secretary, asking him to book a restaurant, he still wouldn't know if there are seats available. It's not an intelligence problem; it's an information problem."
Meituan doesn't lack intelligence; it seeks the capability for AI to comprehend the physical world. Its extensive investment strategy aims to integrate business and technological scenarios with portfolio companies—宇树's robotics,智谱's large models,沐曦's chips—all ultimately feeding into Meituan's local services ecosystem. The recently upgraded food safety model "StarGaze" is already being applied in store inspections and kitchen monitoring, representing an initial implementation of this logic.
Instant retail, international expansion, and AI—these three areas have been Meituan's focus for years. The food delivery war was merely an interlude. Over the past year, Meituan defended its position at minimal cost and welcomed a return to理性 competition. Now, it can finally apply its strategic acumen to longer-term races.
