Meituan, the leading food delivery company in China, reported its second consecutive quarterly loss, slightly missing revenue growth forecasts. This comes after a year of aggressive, subsidy-intensive competition in China’s one-hour delivery market.
Meituan’s revenue growth and profits have been under pressure for several consecutive quarters since the introduction of new ‘instant retail’ platforms by e-commerce heavyweights Taobao, which is owned by Alibaba, and JD.com in early 2025.
The term ‘instant retail’ or ‘quick commerce’ refers to online orders that typically include food, bubble tea, and everyday items, delivered within an hour.
However, the early part of 2026 has signaled a potential slowdown in the instant retail pricing battle, which has been condemned as a “race to the bottom” by Chinese regulatory bodies.
For the quarter ending on December 31, Meituan’s revenue reached 92.1 billion yuan (approximately US$13.3 billion), marking a 4.1% increase from the previous year. This figure is slightly below the 92.2 billion yuan analysts had predicted.
The company managed to reduce its adjusted net loss to 15.1 billion yuan, down from 16 billion yuan in the third quarter. This is a stark contrast to the same period a year earlier, when Meituan reported a profit of 9.8 billion yuan.
During a post-earnings call with analysts, Meituan’s CEO, Wang Xing, claimed that the regulatory stance on the instant retail competition is “already quite clear”. Wang stressed that regulatory authorities are vehemently against the escalating ‘neijuan’ competition and are keen on promoting a healthy, orderly market. ‘Neijuan’, or ‘involution’, refers to a situation where individuals or companies are forced into intensifying competition that yields minimal benefits.
Earlier in the week, Meituan’s shares experienced a surge of 14% following the re-publication of a state media editorial by Chinese regulators. The editorial called for an end to the ongoing food delivery price wars, and its re-publication was perceived by industry experts as an official endorsement.
What is ‘instant retail’?
Instant retail, also known as quick commerce, refers to online orders typically comprising food, bubble tea, and daily use items, delivered within an hour.
What does ‘neijuan’ mean?
‘Neijuan’, or ‘involution’, refers to a situation where companies or individuals are pushed into a state of intensifying competition that brings very little benefit.
What was the response of the market to the call for an end to the food delivery price wars?
Following the re-publication of a state media editorial that called for an end to the food delivery price wars, Meituan’s shares experienced a 14% increase, suggesting a positive market response.
