Meituan Profit Plunges 97% Amid China Food Delivery Competition

Meituan's profits plunged dramatically in the second quarter of 2025, with net income falling 97% to 365.3 million yuan despite a 12% rise in revenue, highlighting intense competition from Alibaba and JD.com in China's food delivery market. The company attributed the profit collapse to aggressive discounting and increased spending on user incentives, promotions, and advertising aimed at retaining customers amid this price war, which also eroded operating margins significantly. Meituan's operating profit dropped 76% in its core local commerce segment, with an operating margin shrinkage from 25.1% to 5.7%, while losses in its new business segment widened. The fierce competition led to a substantial loss in market value for Meituan and JD.com, forcing the companies to pledge an end to the destructive price war under regulatory pressure. To counter domestic margin pressures, Meituan is expanding internationally through its logistics platform Keeta, which has grown in order volume and transaction value since entering markets like Saudi Arabia and Hong Kong. Despite the profit setbacks, Meituan’s revenue growth and strategic shifts in its business model indicate ongoing efforts to stabilize and regain market leadership.