While the market focuses on intense food delivery competition, Meituan has already made deep strategic moves in the AI sector.
Among Chinese internet companies, Meituan stands out as one of the most resilient. From the group-buying wars to early food delivery battles, local service defenses, and the new round of food delivery competition, Meituan has faced each challenge head-on. Historically, while each conflict has been difficult, the company has consistently emerged stronger.
The current food delivery competition, occurring amid the AI revolution, has persisted for over a year. Meituan's management has repeatedly expressed opposition to irrational price wars, yet competitive pressures have forced the company to respond.
How has Meituan performed in this battle? Has it maintained its position? Beyond food delivery, what other initiatives has Meituan pursued?
In the face of intense competition, Meituan reported expected losses. In 2025, the company recorded revenue of RMB 364.9 billion, an 8% year-on-year increase, but shifted from profit to a net loss of RMB 23.4 billion, with an operating loss of RMB 17 billion. The core local commerce segment, which includes food delivery, reported an operating loss of RMB 6.9 billion.
Although the company turned from profit to loss, the loss amount was relatively modest compared to peers. On a quarterly basis, significant improvement was observed: the operating loss in core local commerce narrowed from RMB 14.1 billion in Q3 2025 to RMB 10 billion in Q4 2025, with the loss margin improving by 5.5 percentage points to 15.5%.
For comparison, Alibaba's China e-commerce group saw adjusted EBITA drop 46% over nine months ending December 31, 2025, while JD.com reported a RMB 46.6 billion loss in its new business segment, including food delivery.
In terms of sales expenses, during the three quarters since the competition intensified, Alibaba increased spending by RMB 83.7 billion year-on-year, JD.com by RMB 34.7 billion, and Meituan by RMB 38.7 billion. Combined, the three companies invested over RMB 150 billion in subsidies, primarily for rider incentives and price competition.
Meituan's full-year sales costs rose 22.2% to RMB 253.8 billion, while sales and marketing expenses increased 60.9% to RMB 102.9 billion. However, quarterly figures show a reduction in both costs and marketing expenses in Q4 2025, indicating improved efficiency.
According to J.P. Morgan survey data from November 2025, Meituan held a 50% share of order volume, compared to Alibaba's 42% and JD.com's 8%. Throughout 2025, Meituan maintained a 60% share of gross transaction value in food delivery, demonstrating strength in the mid-to-high-price meal segment.
Wang Puzhong, CEO of Meituan's core local commerce, emphasized the company's efficient use of resources in competitive promotions, stating that Meituan not only kept pace but did so with fewer resources.
Meituan has also expanded its "30-minute everything delivery" service beyond food to include daily necessities, electronics, and other categories through innovations like flagship stores and self-operated warehouses. Over the past year, both user numbers and purchase frequency reached new highs. Additionally, the company's new businesses in grocery retail and international operations surpassed RMB 100 billion in revenue, maintaining strong growth.
In its financial report, Meituan reiterated its clear strategic focus despite a volatile external environment. CEO Wang Xing emphasized that instant retail remains a form of retail, where success depends on product variety, reliable delivery, and competitive pricing.
On March 25, ahead of the earnings release, an article in the Economic Daily calling for an end to the food delivery price war was reposted by the State Administration for Market Regulation. The piece argued that prolonged price competition is unsustainable and benefits no one. Following this, shares of Alibaba, Meituan, and JD.com surged, with Meituan's Hong Kong-listed stock rising 13.92%.
Post-earnings, Citi upgraded Meituan to "buy" and raised its target price from HK$94 to HK$110, citing improved unit economics in the food delivery business due to a focus on high-value users.
In the AI revolution, Wang Xing stated that the only reasonable strategy is offense, not defense. However, Meituan aims to apply AI strategically to enhance its core local services rather than pursuing superficial advancements. The company has significantly invested in AI talent and infrastructure since early 2023, positioning itself as one of the largest investors in AI among Chinese firms without cloud computing operations.
Meituan holds a 9.65% stake in Unitree Robotics, the world's leading humanoid robot company, making it the largest external shareholder. According to China Entrepreneur, Meituan has invested in at least 16 companies in embodied intelligence, with 10 achieving unicorn status. Notable investments include Galaxy General, Starsea Atlas, and Sharpa.
In broader hard tech sectors like chips, AI models, and autonomous driving, Meituan has supported 28 unicorns and 7 listed companies, including Moore Threads, Unisoc, and Li Auto. The company's tech investments span computing, decision-making, perception, and execution, building a comprehensive capability map for AI integration into the physical world.
Meituan continues to develop its proprietary foundation model, LongCat, while collaborating with leading third-party models to improve real-world understanding. Wang Xing highlighted that the key to an AI "super entrance" lies in accurately understanding user needs and efficiently executing tasks, which goes beyond simple chatbots.
Leveraging its extensive data on local merchants and user reviews, Meituan has launched an AI assistant, "Xiao Tuan," integrated into its app, covering all local service categories. The assistant helps users quickly find suitable merchants based on their needs.
Looking ahead to 2026, Meituan plans to fully embrace AI, combining its proprietary multimodal model with open-source technologies to create a comprehensive local life AI assistant. The company remains committed to its mission of helping people "eat better, live better," creating value for all stakeholders.
