Takeout is a "battle for efficiency," with Meituan maintaining a 60% market share while incurring minimal losses.

Author: Qibai

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The most brutal battle in China’s consumer market in 2025 is not a war between new energy vehicles, nor a fight over AI entry points—it is the “Three Kingdoms” showdown of food delivery in the on-demand retail industry.

The three major food delivery platforms burned through more than 150 billion yuan, and users were bombarded round after round with “low-priced milk tea,” pushing the entire industry into an irrational competition defined by “who can burn more money.”

On March 26, Meituan released its full-year 2025 financial report. Against the backdrop of losses that had already been forecast, the highlight of this report is not the losses themselves, but the fact that it lays out the end result of the food delivery war.

The day before the report was released, the State Administration for Market Regulation forwarded a commentary by the Economic Daily, and it was rare to see it set the tone so clearly: “The food delivery war should be over.” The next day, Meituan’s share price surged 14% immediately, and the Hang Seng Tech Index jumped sharply.

Why now? Meituan’s financial report provides the answer: as the side holding the fort, it used the smallest cost to defend the most core position. The core local commerce segment lost 6.9 billion yuan for the year. At a cost far lower than its competitors, it held onto more than 60% of food delivery GTV share.

Subsidies determine the starting point; competition filters down to the finish line. What may truly reshape the industry landscape is those long-term players who continue to stand by the essence of value creation even after the storm.

**** Defend 60% share at the lowest cost ****

In 2025, under the strong offensive of JD Food Delivery and Taobao Flash Purchase, Meituan held its core base.

The financial report shows that Meituan’s full-year 2025 net loss was 23.4 billion yuan. Its core local commerce business segment moved from profit to loss, with an operating loss of 6.9 billion yuan. This food delivery war, on the surface, is a contest of “money-burning capability,” but in reality it is a test of refined operations capability nearly two decades after industry development.

In a horizontal comparison, JD Food Delivery posted losses of 46.6 billion yuan, while Taobao Flash Purchase burned through more than 5B yuan. By comparison, Meituan’s core local commerce operating loss of 6.9 billion yuan looks especially “disciplined.” This also verifies what Meituan’s CEO of core local commerce, Wang Puzhong, previously said: “We not only can afford to keep up, but we used far fewer resources than them to do it.”

Meituan still steadily maintains more than 60% of the GTV market share. Morgan Stanley’s November survey data shows that, by order volume, the shares for Meituan, Alibaba, and JD.com are 50%, 42%, and 8%, respectively.

In 2025, facing the strong offensive from JD Food Delivery and Taobao Flash Purchase, Meituan successfully defended its core base.

Worth noting is that in the mid-to-high average order value sit-down meal market, Meituan still maintains an absolute advantage. Sit-down categories have higher average order values, stronger user stickiness, and more stable merchant partnership relationships. They are the core source of profit for food delivery. In the most intense price war, in low-priced milk tea and fast-food categories, subsidies have a bigger impact on share. But in the sit-down meal space, user choice depends more on delivery experience, merchant coverage, and service stability—precisely the moat Meituan has accumulated over the long term.

At the same time, the subsidy war did not weaken Meituan’s user base; instead, to a certain extent, it strengthened user stickiness. The financial report shows that in 2025, both Meituan’s number of transaction users and user consumption frequency hit new highs. User numbers did not decline but increased, and consumption frequency continued to rise—indicating that amid fierce subsidy competition, Meituan’s user experience and delivery fulfillment capability remain key factors driving user choice. “The harder you fight, the more users you get, and the higher the stickiness becomes”—this reflects that Meituan’s food delivery business moat has not been eroded by the price war.

In addition, although it went through a year of high-intensity competition, Meituan’s cash and cash equivalents still stood at nearly 170 billion yuan by the end of 2025, basically in line with the same period last year. This means that in the money-burning war, Meituan used a relatively controllable loss scale to hold up the base of its core business, while maintaining ample cash reserves—leaving sufficient room for subsequent business development and adjustments to competitive dynamics.

**** The food delivery war should be over ****

On March 25, the State Administration for Market Regulation forwarded the Economic Daily article titled “The food delivery war should be over,” and the regulator’s clear stance at the level of supervision also signals that the era of irrational competition in the industry is about to end.

From the perspective of the long-term development of the platform economy, in the past year the three platforms cumulatively incurred losses of more than 150 billion yuan. This model of using capital investment to buy market share is clearly not sustainable.

In fact, the subsidy war does not provide a stable operating environment for restaurant merchants. By using high subsidies to drive down the average order value, consumers form habits that are sensitive to price. When subsidies are reduced, merchants will face dual pressure: declining orders and rising costs.

For consumers, low prices do reduce the consumption threshold in the short term. But in the long run, such irrational subsidies not only distort price perception—they also affect how much food and beverage companies invest in service quality and food safety fundamentals. Once subsidies can no longer be sustained, consumers may face a gap between rising prices and worsening service experiences.

Against the backdrop of “anti-overcrowding” becoming a macro policy direction, the price war in the food delivery industry no longer aligns with the goals of “benefiting businesses and benefiting people” and promoting high-quality development. The message released by regulators is that competition in the industry should shift away from money-burning models built on piling up capital, and move toward healthy competition based on efficiency, service, and innovation.

Meituan’s 2025 financial report also shows that a pure money-burning model built on capital is unable to shake an opponent that has refined operational capabilities and deep ecosystem moats. Meituan’s share price surge reflects the capital market’s positive expectations for the current policy environment and market conditions.

With regulators setting the tone and the market making the choice, this year-long, high-intensity subsidy war may be entering its next phase and coming to a staged close.

**** Return to the essence of retail; Meituan charts the next decade ****

While the core local commerce segment has endured the test of intense competition, Meituan has already started a new layout.

Among them, the rollout of the on-demand retail business is especially crucial. The financial report shows that as Meituan’s self-operated on-demand retail business, Xiaoxiang Supermarket—by continuously deepening its supply chain efforts—had already entered 39 cities nationwide by the end of 2025. Meanwhile, Meituan has also launched a series of innovative models, such as “Brand Officer Flag Lightning Warehouses” and “self-operated front warehouses.” These initiatives expand delivery categories well beyond food delivery, pushing into everyday department goods, 3C electronics and more, accelerating the realization of the vision of “everything at home in 30 minutes.”

Meituan is making a strategic leap from a single food delivery platform into a comprehensive retail platform that covers more categories and satisfies more on-demand needs.

Meituan’s international business also maintains steady development. After its overseas business, Keeta, entered the Hong Kong market in China, it has gradually extended into broader regions. In the second half of 2025, Keeta further rolled out in Qatar, Kuwait, the United Arab Emirates, and Brazil, and in each new market it showed strong growth momentum. At a recent management communication meeting, Wang Xing explicitly stated that Meituan’s confidence in internationalization is firm and its intentions are clear—but it will not expand blindly; not every business will explore in isolation.

The financial report shows that in 2025, Meituan’s grocery retail business and overseas business delivered strong growth, driving revenue from new business segments of 104 billion yuan, up 19% year over year.

While expanding the boundaries of its business, Meituan continues to invest in ecosystem building to build long-term competitive moats. In rider protection, Meituan was the first to achieve nationwide coverage of subsidies for riders’ retirement insurance, and it also introduced what is considered the industry’s first retirement insurance plan covering all types of riders. In addition, its occupational injury protection program has been expanded to 17 provinces and cities nationwide, covering 16 million riders. In terms of food safety, Meituan is strongly promoting the “bright kitchens and visible stoves” initiative; through hardware subsidies and cash incentives, it encourages merchants to open live-streams from their back-of-house kitchens. Recently, Meituan also upgraded its food safety governance large model, “Star Eye (Xingmou),” using AI technology for store authenticity verification and back-of-house environment early warnings, adding intelligent support for food safety.

Technology investment is another important dimension of Meituan’s future layout. The financial report shows that Meituan’s total R&D investment for 2025 reached 26 billion yuan, up 23%. These investments are mainly used to build an AI foundation and action capability for the physical world. In logistics technology, Meituan continues to develop unmanned drones, unmanned vehicles, and more. By the end of 2025, Meituan’s unmanned drones had opened 70 flight routes in multiple cities both in China and abroad, and cumulatively completed more than 780k orders. In AI applications, Meituan, leveraging its accumulated service scenarios and data advantages in the physical world, launched AI assistants for users: “Xiaomei” and “Xiaotuan.” Public information indicates that during the Spring Festival holiday, more than 8B users planned their eating, drinking, and entertainment consumption through “Xiaotuan.” Meituan has also iterated a series of AI tools for merchants. To date, more than 3.4 million merchants use Meituan’s AI merchant operation assistant to reduce operational costs.

Wang Xing once said that on-demand retail ultimately is still a form of retail. To succeed in retail business, after going through all kinds of flashy things, you need to return to fundamentals—ensure access to a wide variety of high-quality products; ensure you can provide fast and reliable delivery services; and also ensure prices remain affordable.

The food delivery war of 2025 ultimately came to an end with Meituan’s performance of “the least loss and the highest efficiency,” alongside regulators’ explicit requirement that “involution should be turned off.”

In fact, the bigger significance of Meituan’s financial report is that it helps the industry, capital, and regulators deeply recognize that the rough-and-ready model of “burning money for market share” has reached its end.

Of course, for Meituan, the real test is only just beginning. How to lead the industry into healthy competition under regulatory guidance; how to replicate the “efficiency” advantage into broader markets such as grocery and convenience retail and internationalization; and how to continuously fulfill social responsibility and build a healthier ecosystem—these will be the key to determining whether Meituan can get through cycles and truly become a “retail giant.”