Meituan Posts First Loss in Nearly Three Years as Food-Delivery Price War Deepens

Meituan reported a surprise adjusted net loss of ¥16 billion ($2.3 billion) for the quarter ended September, marking its first quarterly deficit in nearly three years, Bloomberg said. The company attributed the downturn to aggressive discounting by rivals Alibaba and JD.com, which has blunted growth and compressed margins across its domestic commerce business.

Revenue reportedly rose modestly to ¥95.5 billion, a 2% year-on-year increase, but most of the losses stemmed from the company’s on-demand commerce unit, where competitors intensified subsidies and price cuts to capture market share. Meituan cautioned investors that losses are likely to continue into the current quarter as the three-way battle for food delivery and quick commerce escalates.

Competition Drags Margins

Meituan attributed the hit primarily to intensified competition in food delivery, where Alibaba and JD have poured large sums into promotions and logistics to expand their footholds. That aggressive campaigning has forced Meituan to match offers and raise marketing and fulfilment spending, a dynamic the company says is weighing on profitability even as top-line growth slows.

Industry trackers project notable share shifts in the quick-commerce market over the coming years. Morningstar forecasts Meituan’s share of gross transaction value will fall to about 55% by 2027 from 73% in 2024, with Alibaba expanding toward 40% and JD gaining ground modestly. The changing market map underscores why Meituan’s management has accepted near-term losses to defend long-term scale.

Overseas Expansion

To counter domestic pressure, Meituan has accelerated international moves: this year it launched its Keeta food-delivery service in Brazil and expanded into parts of the Middle East, including Qatar, Kuwait and the UAE. Reports, and analysts, say the company is also exploring a possible entry into India, a market with large growth potential but heavy incumbent competition.

Brokerage and sell-side coverage has grown more cautious. Consensus analyst recommendations fell to record lows after multiple downgrades, and average price targets have been cut sharply since March. Some research notes warn that overseas expansion will be costly and that protecting the domestic market should remain a priority.

Meituan warned investors that the price war may continue to depress profits in the near term. The company’s choices, sustain subsidies to protect share, or pull back and defend margins, will shape its financial profile through 2026. For now, Meituan is betting that scale and international diversification will ultimately restore profitability, even if that means enduring another stretch of elevated losses.