BUSINESS

Meituan Warns of Loss as High as $3.5 Billion Amid Subsidy War

Published: Feb. 14, 2026 6:52 p.m. GMT+8

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A Meituan food delivery rider travels along a street in Shenzhen. Photo: VCG

Meituan expects to swing to a net loss of up to 24.3 billion yuan ($3.5 billion) for 2025, flagging the heavy price of defending its dominance against aggressive incursions by Alibaba Group Holding Ltd. and JD.com Inc.

The Hong Kong-listed food delivery giant projected a net loss between 23.3 billion yuan and 24.3 billion yuan for the full year, a stark reversal from the 35.8 billion yuan profit recorded in 2024. In a filing released on Friday, the company warned that the red ink is expected to persist into the first quarter of 2026.

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Meituan expects a 2025 net loss of up to 24.3 billion yuan, reversing a 35.8 billion yuan profit in 2024, mainly due to fierce subsidy wars with Alibaba and JD.com.
The company’s Core Local Commerce segment swung from a 52.4 billion yuan profit in 2024 to a 6.8 billion yuan loss in 2025; its market share dropped to 55–58%.
Meituan’s shares fell over 30% in 2025; Chinese regulators introduced new antitrust rules targeting excessive subsidies.

AI generated, for reference only

Who’s Who

Meituan: Meituan, a Chinese food delivery giant, is facing significant financial challenges due to intense competition from Alibaba and JD.com. Anticipating a net loss of up to 24.3 billion yuan for 2025, the company's profitability has collapsed. This downturn is driven by a subsidy war, which has led to increased spending and a decline in market share.

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd. is a major competitor in China's consumer tech sector. Its instant retail unit, Taobao Instant Commerce, is engaged in a fierce subsidy war in the food delivery market, announcing a 50-billion-yuan subsidy program in July 2025. This has significantly impacted Meituan's profitability and market share.

JD.com Inc.: JD.com Inc. formally entered the food delivery market in February 2025, igniting a "subsidy war" with competitors Meituan and Alibaba. By 2025, JD.com had captured 5% to 8% of the market share, contributing to a volatile three-way contest in the industry. As a result, JD.com's executives were summoned by the State Administration for Market Regulation (SAMR) in May and July 2025, aiming to promote fair and rational competition.

Taobao Instant Commerce: Taobao Instant Commerce (formerly Alibaba's Ele.me) is a major player in China's instant retail market. It announced a 50-billion-yuan subsidy program in July 2025, intensifying a subsidy war with Meituan and JD.com. This competition led to significant market share shifts and financial losses for Meituan.

Ele.me: Ele.me, formerly owned by Alibaba, is now rebranded as Taobao Instant Commerce and competes with Meituan and JD.com in the food delivery market. It was initially in a 70-30 split with Meituan, but by 2025, it held 35% to 37% of the market share. Taobao Instant Commerce launched a 50-billion-yuan subsidy program, sparking a subsidy war with Meituan.

J.P. Morgan: J.P. Morgan acknowledges the challenges Meituan faces due to intensified competition in food delivery and instant retail. While investor focus has shifted to short-term earnings risks, J.P. Morgan also notes a potential positive: regulatory intervention could curb irrational competition, mitigating some of Meituan's downside risks.

AI generated, for reference only

What Happened When

2024：: Meituan recorded a net profit of 35.8 billion yuan.

2024：: Meituan's Core Local Commerce segment had an operating profit of roughly 52.4 billion yuan.

February 2025：: JD.com formally entered the food delivery market, igniting a subsidy war.

May 2025：: SAMR summoned executives from JD.com, Alibaba, and Meituan to demand rational competition.

Q2 2025：: Meituan’s net profit plummeted 96.8% year-on-year to just 365 million yuan.

July 2025：: Alibaba’s instant retail unit, Taobao Instant Commerce, announced a 50-billion-yuan subsidy program.

July 2025：: SAMR again summoned executives from JD.com, Alibaba, and Meituan.

Q3 2025：: Meituan posted a net loss of 18.6 billion yuan, its first quarterly loss since 2023.

2025：: Meituan projected a net loss between 23.3 billion and 24.3 billion yuan for the full year.

2025：: Meituan's share price plunged by more than 30%.

As of 2025：: The food delivery market restructured into a three-way contest: Meituan (55%-58%), Taobao Instant Commerce (35%-37%), JD.com (5%-8%).