DingjiaoOne, Reporting by Wang Hanxing, Editing by Wei Jia

NextFin News -- On June 1, Meituan released its Q1 2026 earnings report. At that point, the year-long food delivery war—running from Q2 2025 through this quarter—finally came with a full bill. By estimates, Meituan, Alibaba, and JD.com burned through at least RMB 150 billion on food delivery, forcibly pushing a business that used to handle 80–90 million meal-delivery orders a day to more than 200 million orders a day at its peak.

This war changed a lot. More than a year ago, Ele.me still had a name of its own; when most people heard the term “instant retail,” they thought of Meituan Instashopping; nobody ordered food delivery on JD; and Hong Kong’s Hang Seng TECH Index still hadn’t been jokingly dubbed the “Hang Seng Food Delivery Index.”

A year later, Ele.me had been folded into Alibaba’s China e-commerce business group; JD Food Delivery had reached around 10 million orders per day on average; and Meituan held onto its No. 1 market-share position by enduring three consecutive quarters of losses.

The tide has begun to ebb. The market-share pattern among the three players has stayed stable for two straight quarters, and overall order volume has come down from the peak. In the latest round of earnings, all three companies clearly struck a different posture.

Meituan’s adjusted net profit narrowed sharply compared with the previous two quarters, and both its earnings release and conference call talked more about retail; Alibaba’s net profit was nearly wiped out, hitting a nearly two-year low, but the money was no longer being poured into food delivery—more of it went to AI instead; JD.com’s net profit, meanwhile, had basically returned to where it was when the food delivery war first kicked off.

An internal source at Meituan told DingjiaoOne that in Q1 2026, Meituan’s average daily meal-delivery order volume was around 65 million, while Taobao Instashopping and JD Food Delivery came in at about 50 million and 9 million, respectively. The order split among the three was essentially unchanged from Q4 last year, and overall volumes were down across the board.

“Meituan’s goal at this stage is to scale back subsidies while keeping its leading share. It can accept rivals’ average daily order volume at no more than 80% of its own,” the source said.

The three companies’ strategies were shifting—and regulators were tightening as well.

In late March this year, the State Administration for Market Regulation reposted an Economic Daily article titled “The Food Delivery War Should End,” which the market took as a clear signal that regulators were moving to rein in destructive platform competition and steer the industry toward healthier development.

With multiple factors converging, the most intense phase of the food delivery war had passed—but that did not mean competition among the giants would ease.

Everyone Had Their Own Way of “Winning”

Judging from the bills over the past year, none of the three major players in this food-delivery war can be called an outright winner in any absolute sense.

Let’s start with Meituan’s earnings.

Q1 continued the tone set in the previous quarter: revenue improved slightly. Core Local Commerce (CLC) generated RMB 64.1 billion in revenue during the period, up a marginal 0.2% year over year—returning to positive growth after two quarters. The company’s overall operating loss also narrowed from more than RMB 10 billion in each of the previous two quarters to a loss of RMB 6.5 billion. Both were slightly ahead of market expectations.

Revenue scale and operating profit are the two metrics most closely tied to the food-delivery war in an earnings report. In Meituan’s financials, user subsidies typically aren’t fully booked as expenses; instead, part of them is recorded as a deduction from revenue. This means revenue growth often reflects the intensity of delivery subsidies more directly than profit growth does.

In 2025 Q3 and Q4, Meituan’s CLC revenue both declined year over year. In Q3—when the delivery war was at its fiercest—the YoY drop was close to 3%. Returning to roughly flat growth in Q1 this year was itself a sign that subsidies were easing off.

The better-than-expected loss reduction was partly because revenue came in slightly above expectations. Bloomberg’s consensus forecast for CLC revenue in Q1 this year was flat versus last year; the actual result was about RMB 75 million higher than expected.

Another reason was a sharp contraction in selling expenses. In Q1 this year, Meituan’s selling expenses were about RMB 23 billion, a clear drop from the RMB 30+ billion level seen in the previous two quarters.

On the post-earnings conference call, Meituan disclosed that the UE (unit economics, i.e., profit/loss per order) for pure restaurant delivery—excluding non-restaurant “instant retail” orders—had already turned positive in April and May this year.

A brokerage analyst who has long followed Meituan told Dingjiao One that in 2025 Q3, Meituan’s delivery UE hit a trough of about -RMB 2 per order, narrowing to roughly -RMB 1 by late Q1 this year. If management’s claim that it reached break-even in Q2 held true, then the pace of loss reduction across Q2 accelerated significantly.

The analyst added that Meituan’s main competitors once had UEs about RMB 4 worse than Meituan’s last year—meaning Meituan lost RMB 2 per order while rivals lost RMB 6. In Q1 this year, that gap had already narrowed to within RMB 3. Subsidy intensity across the board was clearly declining.

Financial reports released by Alibaba and JD.com in the weeks prior also confirmed this trend.

In Alibaba’s Q1 results, adjusted net profit—after stripping out amortization and impairment of intangible assets, as well as investment in the Qianwen App—edged down slightly year over year. JD.com’s adjusted net profit attributable to shareholders in Q1 this year returned to roughly the same level as in 2025 Q2.

Behind the trillions of yuan in profit burned, the headline win-or-lose figures on the books were only half of this war.

According to information previously obtained by “DingjiaoOne,” over the last three quarters of last year, Meituan, Alibaba, and JD.com spent roughly RMB 40 billion, RMB 70 billion, and RMB 35 billion respectively on subsidies in the food delivery war—burning at least RMB 145 billion in total within a year.

Although subsidies eased in Q1 this year, the combined total from the three still exceeded RMB 10 billion. After a year of fighting, at least RMB 150 billion in profits went up in smoke.

Yet behind what looks like a lose-lose outcome, each company still got what it wanted.

JD.com spent a year building up to around 10 million food delivery orders per day on average. That scale is about half of Ele.me’s pre-war daily order volume, meaning JD.com had essentially secured a foothold in the food delivery market—and successfully established the user mindset of “ordering food delivery on JD.com.”

Alibaba grew its food delivery market share from about one quarter to nearly on par with Meituan’s, even surpassing Meituan in certain months to become the industry leader. More importantly, instant retail—represented by food delivery—helped drive growth in its e-commerce business.

On Alibaba’s Q1 earnings call, Jiang Fan said the synergies between instant retail and traditional e-commerce showed up in multiple areas: driving user acquisition, boosting user engagement, meeting more diversified consumption needs, increasing transaction volume, improving monetization, and supporting logistics infrastructure, among others. Alibaba’s Q1 GMV and CMR demonstrated strong growth momentum, in which instant retail played a key role.

As for Meituan, while it lost its previously unassailable market lead, it still reinforced its core food delivery base at a lower cost than its rivals. In addition, Meituan continued to hold an advantage in the mid-to-high average order value segment of food delivery.

The Price War Wipes out 100+ Billion Yuan in Profit

Looking back, when the battle kicked off in 2025 Q2, no company could have foreseen it would evolve into what it became.

That JD.com and Meituan were destined for a showdown had been a long-standing consensus in China’s internet circles well before 2025. As JD.com’s delivery speed kept improving and Meituan’s range of delivery categories kept expanding, the boundary between their businesses grew increasingly blurred—making a head-on clash inevitable.

On February 11, 2025, JD.com officially announced it was recruiting restaurant merchants for its food delivery business. A week later, JD.com said it would gradually begin paying full-time JD food delivery couriers’ social insurance and housing provident fund, with all related costs covered by JD.com.

The market initially read the move as a “trial run.” Even after JD.com briefly pushed its daily average order volume up to 25 million through hefty early subsidies, there wasn’t much sense of crisis inside Meituan.

An insider at Meituan told “Dingjiao One” that in early 2025, Meituan’s focus was still on retail. Senior management frequently visited offline retail brands to discuss potential partnerships. At one internal meeting, a Meituan executive said they should pay close attention to how JD.com’s food delivery business boosted its core e-commerce site, rather than fixating on competitors’ order volumes. The implication was that if JD.com executed well, Meituan could draw on those lessons when it expanded its own retail business in the future.

The situation began to shift in late April. After Taobao Flash Sale entered the fray, Meituan’s order volume and market share fell noticeably in some cities and regions. To preserve its lead, it had no choice but to follow with subsidies.

One telling detail: members of Meituan’s S-team—who had not attended Meituan’s monthly finance meetings for years—started joining again, tracking subsidies for Meituan food delivery and Flash Sale and their downstream impact on the company’s profits.

Meituan’s initial assessment was that this food delivery war would be a prolonged battle lasting one to two years. Throughout 2025, the company might need to spend an additional RMB 15–20 billion on subsidies. Judging from the eventual outcome, Meituan still underestimated how brutal this war would be.

By mid-June, Taobao Flash Sale’s restaurant delivery business—online for just over a month—was already nearing half of Meituan’s average daily order volume, and it kept ramping up subsidies, pushing the war to a new level.

In August, riding the “first milk tea of autumn” marketing campaign, Taobao Flash Sale pushed its single-day peak order volume further to 120 million orders.

On Alibaba’s Q2 earnings call, Jiang Fan said Taobao Flash Sale’s orders had already “overtaken” its competitors: “If we look only at the share of orders delivered to the doorstep in food delivery, we’re already leading the industry.”

According to Dingjiao One, early in the food delivery war, during a one-on-one investor meeting organized by the sell side, an Alibaba executive said there would be no upper limit on its spending on delivery subsidies—because it couldn’t let competitors know where its bottom line was.

Meituan also quickly realized it had underestimated its rival’s determination to spend, and it promptly matched with subsidies, at one point pushing its own single-day peak to 150 million orders to secure its leading position.

Throughout 2025 Q3, the combined average daily restaurant delivery orders across the three platforms at one point exceeded 200 million. Meanwhile, all three saw their quarterly net profit drop by more than 50% year over year. Three profitable companies simultaneously choosing to burn through more than half their profits was a situation not seen in the past several years.

As profits became increasingly unsustainable for each player, subsidy intensity began to tighten toward the end of Q3.

Meituan CLC CEO Wang Puzhong called via the media for the industry to return to normal business judgment and rationality; JD.com CEO Xu Ran also said JD.com would not fixate on competitors’ minute moves, and that JD.com’s push into food delivery was “not a sprint for quick wins.”

On top of that, as industry regulation tightened again and again, the food delivery price war was put on pause—at least for the time being.

Competition Still Stiff  

As the food delivery battle moved into 2026, the overall tone was already clear. The intensity of restaurant delivery has cooled, but competition across the broader on-demand retail battlefield will not ease.

According to a report by LatePost, Alibaba carried out a major leadership reshuffle this May: Group CTO Wu Zeming joined Alibaba’s Partnership Committee, becoming its fifth member; meanwhile, Hema CEO Yan Xiaolei’s reporting line was changed from Wu Zeming to reporting directly to Jiang Fan, who oversees Alibaba’s entire commerce business.

Both changes are closely tied to on-demand retail. Wu Zeming is also CEO of Taobao Flash Purchase, and Hema is a key component of Alibaba’s on-demand retail operations.

At present, Alibaba’s on-demand retail formats span offline supermarkets and department stores, Hema stores, Hema front warehouses, and Tmall Supermarket, combining platform and self-operated models. On a fully consolidated basis, its average daily order volume for non-food on-demand retail has already reached half of Meituan’s. This organizational restructuring also means Alibaba has brought all on-demand retail-related formats under its China E-commerce Business Group, with unified management under Jiang Fan.

In addition, Alibaba has been in talks to acquire Pupu Supermarket. A few weeks ago, media reports said that Alibaba, JD.com, and Meituan were all involved in the acquisition of Pupu Supermarket, a fresh-grocery front-warehouse operator.

A person close to Meituan told Dingjiao One that Meituan only took part in the acquisition talks at an early stage, but later stopped following up because the asking price was too high.

Compared with Alibaba’s aggressive expansion in on-demand retail, Meituan has been more inclined to rely on its existing Meituan Flash Purchase and its self-operated front-warehouse chain Xiaoxiang Supermarket to grow its non-food business.

In its latest quarterly earnings report, Meituan adjusted its disclosure approach, listing revenue from self-operated businesses—such as Xiaoxiang Supermarket, Kuailv, pharmaceuticals, and alcohol—separately as “revenue from goods sales.” With this figure disclosed on its own, Meituan’s performance in self-operated retail is presented more clearly.

In Q1, goods sales revenue from Meituan’s new initiatives reached RMB 17.989 billion, up 40.7% year over year, with the increase mainly driven by Xiaoxiang Supermarket.

In February, Meituan further strengthened its front-warehouse footprint by acquiring Dingdong Maicai. On February 5, Meituan announced in a filing that it would acquire all issued shares of Dingdong Maicai and its mainland China business for US$717 million (about RMB 5 billion).

Dingdong Maicai has more than 1,000 front warehouses and 7 million monthly active users, and the acquisition primarily serves as a supplement to the Xiaoxiang Supermarket format. At the same time, Meituan Flash Purchase—its platform-based on-demand retail business—has continued to expand, having already built more than 30,000 front warehouses and planning to reach 100,000 by 2027.

Compared with Alibaba and Meituan, JD.com is not chasing scale advantages; instead, it is more focused on synergy across businesses such as JD 7Fresh and JD Instant Delivery, as well as on building out its supply chain.

The fiercest moment of the food-delivery war has already passed, but that doesn’t mean competition among the giants will ease—it’s simply moving to a different battlefield. In the new arena of on-demand retail, challenges come not only from outside, but also from within.

Alibaba has to balance its investment in AI and broad consumer spending over the next year, and prolonged fighting on two fronts has already put profits under heavy strain.

For Meituan, the issue it may need to solve is coordination between its platform business and its self-operated businesses. For a long time, the two major on-demand retail pillars—Meituan Instashopping and Xiaoxiang Supermarket—have essentially operated independently: the former sits under CLC, while the latter belongs to grocery retail, and the commission rate Xiaoxiang pays Meituan’s food-delivery riders is even lower than what it pays its own. When Alibaba fully integrated its on-demand retail formats and launched an all-out offensive, Meituan should have been thinking even more about how to properly address cross-business synergy.

Beyond that, while the food-delivery war was raging, Alibaba’s e-commerce business and Meituan’s in-store services business both, to varying degrees, were hit by “surprise attacks” from competitors—most notably the impact from Douyin. For the main participants in the food-delivery war, the threats beneath the surface may be even more severe than the visible competition.