Meituan posts first loss in three years – warns more to come

Reuters

1st Dec 2025

China’s leading food delivery group Meituan has swung to its first quarterly loss since late 2022 and warned of likely further losses next quarter as a price war with rivals Alibaba and JD squeezes margins.

The company reported an adjusted net loss of 16 billion yuan (US$2.26 billion) for the quarter ended September 30, compared with an adjusted net profit of 12.8 billion yuan a year earlier – the first quarterly loss since December 2022, according to LSEG data.

The price war in the food delivery sector is unsustainable and a “typical example of bad money driving out good money”, CEO Wang Xing said on a post-earnings call.

He added that Meituan still leads in mid- to high-priced orders. “Our market share exceeded two-thirds for recent orders with a payment above 15 yuan, and over 70 per cent for orders valued over 30 yuan,” Wang said.

Competition has overheated, Meituan said, and it expects operating losses to continue in the fourth quarter for both its core local commerce segment and the company overall. The company has spent heavily to defend its nearly 70 per cent market share as rivals Alibaba and JD spend heavily on customer acquisition.

The firm has consistently said defence of its customer base will prove expensive, pressuring its profit margin in the near term.

Competition has been particularly intense in instant retail, where goods are delivered within an hour. Meituan’s push into JD’s core electronics and smartphone sales business earlier this year prompted its rival to launch its own food delivery platform, while e-commerce market leader Alibaba Group also ramped up instant retail efforts.

Alibaba executives said this week their focus was now moving beyond an initial grab for market share into improving unit economics.

Analyst Jamie Chan at Third Bridge expects the price war to ease next year.

“As subsidies taper off and logistics costs fall, Meituan’s unit economics (UE) are expected to turn positive in Q1 next year, or Q2 at the latest,” Chan said.

Regulators have flagged new rules for pricing to protect small retailers, and all three firms have pledged to curb price wars. Meanwhile, Meituan has accelerated overseas expansion for its Keeta app in Hong Kong, the Middle East and Brazil, where it launched on October 31.

Meituan shares have dropped more than 30 per cent so far this year. Third-quarter revenue rose 2 per cent, beating analyst estimates.

• Reporting by Beijing Newsroom; Editing by Jacqueline Wong, Elaine Hardcastle, of Reuters.