One Year into the Food‑Delivery War, the Damage Ratio Is the Moat

Meituan's defence held — losses tell a different story than headlines

Meituan (美团) reported 2025 full‑year revenue of RMB 364.9 billion and an overall operating loss of RMB 17.0 billion, with its core local commerce unit showing an annual operating loss of RMB 6.9 billion and a Q4 operating loss of roughly RMB 10.0 billion — about 30% narrower than Q3. Those are material losses. But look closer: Meituan’s cash and short‑term liquid assets rose by about RMB 25.0 billion quarter‑on‑quarter, and the company still commands more than 60% of food‑delivery GTV (gross transaction value). What looks like a bruising year reads more like a successful defence.

Why did Meituan lose less and keep share? The short answer: quality of orders and operational leverage. Meituan has retained disproportionate share in mid‑ and high‑ticket restaurant orders — over two‑thirds of orders >RMB 15 and more than 70% of orders >RMB 30 — segments that are harder to win with subsidies alone. JP Morgan (摩根大通) research cited in the report showed order‑share splits of roughly 50% for Meituan, 42% for Alibaba (阿里巴巴) and 8% for JD.com (京东), underscoring that much of rivals’ volume came from low‑value, heavily subsidised orders. It has been reported that JD’s new local delivery efforts lost in excess of RMB 40 billion last year and that Taobao Flash Sale (淘宝闪购) reportedly burned RMB 70–80 billion — heavy spending that, crucially, did not move high‑value demand.

Regulators have moved; the war appears to be ending

Regulatory pressure has been the other decisive factor. A string of interventions — multi‑agency talks in May 2025, a follow‑up SAMR (State Administration for Market Regulation/市场监管总局) administrative meeting in July, a competition assessment announced in January 2026, and a hard‑line editorial in the state‑run Economic Daily (经济日报) in March — have all signalled a tightening tolerance for “inner‑voluntary” subsidy wars. The Economic Daily piece was reprinted on the SAMR website and Meituan’s shares jumped about 14% on the day. If subsidies are curtailed by policy or enforcement, the low‑quality order pools that rivals bought with cash will evaporate. Who wins then? The platform that holds durable supply, fulfilment and unit economics — Meituan, in other words.

So what next? The likely path is a reversion to fundamentals: lower headline volumes as subsidy schemes are constrained, and competition refocusing on fulfilment, merchant supply, dispatch algorithms and unit economics — areas that take time and capital to build and cannot be easily copied overnight. It has been reported that SAMR’s probe and related assessments are ongoing and that regulators could pursue a package of measures from administrative penalties to limits on subsidy mechanics. For Western readers: this is not a pure market‑share fight but a regulatory and durability test in which capital intensity and “damage ratio” — how much pain a platform inflicts on rivals relative to its own pain — become the defensive moat.