Meituan (美团) holds the line as subsidy war rages — but is the worst still to come?

Meituan weathers a billion-yuan barrage

Meituan (美团) surprised markets by keeping more than 60% of the food-delivery GTV market even after a fresh round of subsidy-led attacks from rivals. In its 2025 fourth-quarter and full-year results the company reported revenue of 3,649亿元 (RMB 364.9 billion) and a full-year net loss of 234亿元 (RMB 23.4 billion); its core local commerce unit posted an operating loss of 69亿元 (RMB 6.9 billion). Yet market share stayed above 60% and Meituan retained a commanding position in mid-to-high ticket restaurant orders. It has been reported that JD (京东) and Alibaba (阿里) injected large sums—reportedly around RMB 50 billion and RMB 90 billion respectively—into the war, raising the obvious question: can cash alone buy a durable moat?

Efficiency, logistics and diminishing returns on subsidies

The short answer appears to be no. Meituan’s unit economics have been markedly superior. A JPMorgan analysis cited in the market shows Meituan’s per-order losses narrowing from about RMB 1.8 to RMB 1.2 in late 2025, versus competitors losing more than RMB 3.0 per order. Meituan also captures more than two-thirds of orders with a paid ticket above RMB 15 and over 70% of orders above RMB 30 — segments where retention, brand and higher margins matter most. Subsidies can move short-term share, but their marginal effect fades as customer stickiness, merchant networks and fulfillment density take hold.

Moat rooted in logistics, long-term experience and cash reserves

Meituan’s advantage is partly structural. The company pioneered “instant retail” and built fulfillment around a tight ~5km radius — a model that a far-field e‑commerce logistics play cannot simply transpose overnight. Meituan’s decade-plus experience in low-margin local services, its data-driven routing and cost control, and the density of merchant relationships are hard to replicate quickly. The company ended 2025 with roughly 1,700亿元 (RMB 170 billion) in cash and equivalents and has continued targeted investments — including a roughly $717 million acquisition of Dingdong Maicai (叮咚买菜) China business and overseas pushes such as Keeta — underscoring that it can both defend and selectively expand.

The battle is far from academic. Against a backdrop of tighter capital conditions and geopolitical pressures that make global expansion and supply-chain plays more fraught, China’s tech firms are fighting for scale at home. Subsidy duels are costly and, reportedly, “the most painful moment hasn't come yet,” say some analysts. But for now, Meituan’s blend of operational discipline and local-market infrastructure means the subsidy barrage has not yet pierced its defenses.