Wang Xing is destined to have "no peaceful days."

On April 24th, the topic of "Wang Xing deleting Weibo" sparked significant external attention. There were speculations that Wang Xing's action might be related to the competition between JD.com and Meituan. However, it was later reported that this was a rumor, as Wang Xing had set his Weibo to be visible for six months, and he had not posted any new Weibo updates during that time. Meanwhile, the active performance of JD.com founder and chairman Liu Qiangdong stands in stark contrast to Wang Xing's low profile. Internal discussions about setting a red line for food delivery net profit margins and personally experiencing food delivery have also generated industry buzz. The internet hasn't been this lively in a long time. Since JD.com launched its food delivery business this year, JD.com and Meituan have engaged in multiple confrontations, escalating into a heated battle in April, with both sides exchanging barbs, making statements, and hinting at each other, pushing both to the forefront. The capital market also showed a mediating attitude—on April 22nd, the day the "verbal battle" was at its fiercest, both JD.com and Meituan's stock prices plummeted. Looking back at the most intense cash-burning wars in the internet sector, Meituan has been involved in nearly every battle: the group-buying war in 2010, the food delivery war in 2015, the shared bike war in 2017, and the community group-buying war in 2020... As one of the giants, Meituan has faced off against Alibaba, Baidu, Didi, and Pinduoduo. A report from ten years ago by China Entrepreneur, which interviewed Wang Xing, described Meituan as "O2O never at peace," indicating that Meituan's business model means it can never escape competition. It must be said that Meituan has indeed chosen a "bad business." Food delivery requires heavy investment, burns a lot of cash, and is difficult to profit from. A report from JP Morgan shows that the average net profit margin of mainstream global food delivery platforms in 2024 is only 2.2%. If described in the language investors love, it would be "this model isn't sexy enough." However, as online growth approaches its ceiling today, the food delivery business suddenly becomes "very appealing"—which other traffic entry can connect online and offline and meet high-frequency essential needs? Only food delivery. High-frequency and essential needs are the core of this verbal spat. Why is this "hard business" so appealing? Why is food delivery considered a bad business? The simplest dimension to judge a business is whether it makes money. According to JP Morgan's global online food delivery industry report, the predicted net profit margin for mainstream global food delivery platforms in 2024 is between 1.5% and 3.3%, with an average of 2.2%. Among them, Uber's Uber Eats leads with a net profit margin of 3.3%, while Meituan's food delivery business has a net profit margin of 2.8%. The food delivery business of Southeast Asian ride-hailing platform Grab has a net profit margin of only 1.6%, and Ele.me has yet to turn a profit. Globally, the profit margins for food delivery businesses are not high, and compared to profit "cash cows" like e-commerce and gaming, it really doesn't qualify as a good business model Meituan once changed its financial reporting criteria to core local business and new business starting from the second quarter of 2022 due to low gross margins in food delivery and unsatisfactory financial data. Core local business mainly includes mature business models such as food delivery, flash purchase, in-store services, and hotel travel, while new business refers to areas that require continuous investment, such as Meituan Preferred, Little Elephant Supermarket, and ride-hailing. In-store services and hotel travel are Meituan's main sources of profit, with financial data being quite good. After food delivery was merged into core local business, this segment overall also became quite "presentable." For example, in the 2024 financial report, this segment generated revenue of 250.2 billion yuan, with a revenue growth of 20.9%, and operating profit margin increased from 18.7% to 20.9%. Even if it cannot make money, food delivery is still Meituan's most unshakeable moat. Without the food delivery business, Wang Xing's advocated "boundaryless expansion" would likely just become a slogan. The "clothing, food, housing, and transportation" related to people's livelihoods are all essential businesses, but "food" is certainly the most frequent among them. High transaction frequency from users creates a strong dependence on the platform, meaning that the food delivery business is essentially a huge traffic entry point. Once the economies of scale (i.e., both merchants and users tend to gather on the largest platform) are formed, the traffic from food delivery can easily translate into growth for other businesses, bringing overall synergy. For instance, Meituan's hotel travel business achieved a cold start through the food delivery business, with the first batch of hotel travel users coming from food delivery users. Meituan's traffic is even more precise than that of social platforms; as a tool-based platform, Meituan's traffic is almost entirely purpose-driven, meaning consumers open the app with specific needs to order food delivery, book hotels, or buy tickets, all of which are goal-oriented actions. A hotel industry practitioner once explained to "China Entrepreneur" that most marketing investments in content platforms for hotel travel do not have as high a conversion rate as imagined. "For example, many people may save related content they see on Douyin or Xiaohongshu, but when it comes to making a real decision, users' first habit is still to open OTA platforms to search and place orders, and they might not even go back to their saved items." This business logic has been summarized internally by Meituan as "high frequency drives low frequency," meaning that high transaction frequency businesses (food delivery, flash purchase) are responsible for traffic generation, while low frequency businesses (in-store services, hotel travel) are responsible for monetization, until they cover the entire local lifestyle business network. High-frequency essential businesses often have low profits, but from a synergy perspective, whoever controls this entry point essentially holds the discourse power of high-frequency local traffic. Therefore, when dissecting Meituan's business model, it should not be viewed in isolation but rather calculated as a whole. Meituan has engaged in many "hard businesses," such as bike-sharing and power banks, which are all heavily invested local essential businesses. These businesses are seen by Meituan as "entry points"—even if they do not make money or incur slight losses, as long as they can cultivate the habit of users opening Meituan daily, they can drive traffic to the overall business and sustain growth in more profitable areas. Thus, Meituan's performance is entirely the result of the combined effects of scale and cost reduction and efficiency improvement. The initial growth was also entirely achieved through the "ground-pushing iron army" negotiating with one merchant after another. Meituan has become accustomed to hard businesses, investing billions and burning cash subsidies to seize market share has become routine Of course, Meituan cannot do every business. In the past, Meituan tried to replicate the flywheel effect with this approach and encountered many pitfalls: for example, community group buying and ride-hailing, supporting new businesses with its usual money-burning subsidy method, but between 2019 and 2023, new business losses exceeded 100 billion, and Meituan is still looking for ways to stop the losses. For other internet giants, the local lifestyle market is indeed tempting, as the online traffic dividend has already peaked, and everyone is trying to find new growth within the existing stock. QuestMobile data shows that by January 2025, the average number of apps used per user per month, usage duration, and usage frequency across the entire network were 28.7, 171.4 hours, and 2487.9 times, respectively. Among them, both the number and duration saw slight year-on-year increases, but the frequency experienced a rare decline year-on-year, indicating that traffic has further diversified. The local lifestyle market is a rare trillion-dollar track with relatively high market space and low penetration. However, entering this track means competing for capacity and merchant supply from the leading players, as well as overcoming the difficulties of fulfillment. Rich as Douyin is, although it has captured some of Meituan's market share in-store, it has almost stagnated in the "home delivery" takeaway business due to its inability to overcome weaknesses in logistics distribution and merchant resource connections. Douyin has not experienced tough times, but JD.com is different. Back then, JD.com also relied on honing its supply chain and building its logistics to secure a place in the e-commerce market. Douyin has not succeeded in takeaway; what about JD.com? Wang Xing's "Antarctic Exploration Story" Let's first discuss a real question: Does JD.com need takeaway? In the last round of the takeaway war, the subsidies from takeaway platforms led by Meituan and Ele.me reached the level of hundreds of billions. The outcome was that Meituan Takeaway occupied 70% of the market share, Ele.me fell to second place, and Baidu Nuomi and Koubei had long since disappeared. On one hand, Meituan has already formed a bilateral scale effect; in addition, the growth rate of Meituan Takeaway has also significantly slowed down. Its transformation into all-category instant retail and full commitment to "flash purchase" is also aimed at finding profit growth space. More importantly, the current stage is no longer suitable for relying on burning money to fight a "lightning war." The final result is likely to be a long-term war of attrition where both sides burn money—JD.com initiated hundreds of billions in subsidies, 0 commissions, free delivery for late orders, and paying social security for riders, each of which requires substantial real cash investment; Meituan responds, following every move of JD.com, also requiring large investments. When two listed companies engage in a cash-burning war, can cash flow sustain it, and can financial statements hold up? But JD.com has to fight. The "30-minute delivery efficiency" emphasized by Meituan's flash purchase directly strikes at JD.com. Among the three major retail e-commerce platforms, Taobao focuses on a wide variety of categories and abundant supply, Pinduoduo emphasizes saving money, while JD.com focuses on speed. In addition, in recent years, Meituan has been continuously expanding in the instant retail field, with flash purchases entering the 3C digital and home appliance markets, directly targeting JD.com's territory. Meituan's logic is very clear: from the service side of delivery, both takeaway and flash purchase are low-margin businesses, while high margins are hidden in the retail end of "everything," and 3C and digital home appliances are the highest profit categories among all goods. According to past strategies, if massive delivery resources are used to drive low frequency with high frequency, instant retail may become Meituan's new cash "cow." Although Meituan has not directly engaged in retail itself, Wang Xing's logic in doing things has always been to dismantle opponents through efficiency—this efficiency is not a one-time large-scale offensive, but rather a little bit every day, winning in the long term without people noticing. Before the "Battle of a Thousand Groups" ended in 2012, Wang Xing told a "South Pole exploration story": In 1911, there were two expedition teams—Amundsen's team and Scott's team—who aimed to achieve the great feat of being the first humans to reach the South Pole. Both teams set out around the same time, and ultimately, Amundsen's team arrived at the South Pole first, with all five members successfully returning to base; in contrast, Scott's team, which had 17 members, arrived late and tragically lost all members on the return journey. The success of Amundsen's team was due to their thorough investigation and preparation, particularly their strict plan—regardless of the weather, they had to advance 30 kilometers every day. Wang Xing is similar; he breaks down Meituan's long-term goals and requires the team to make small progress every day. JD.com must be on guard. At the very least, it can muddy the waters and disperse Meituan's resources. JD.com indeed needs a high-frequency traffic entry point to enhance the activity of the JD app, in addition to boosting fresh produce, daily necessities, 3C, and other advantageous categories, it can further occupy consumer mindset in terms of retail speed. This battle for food delivery is not just about delivery, but rather the discourse power of "instant retail" and "fulfillment infrastructure." Meituan and JD.com are the most adept at doing ground-level hard work among the internet giants, both relying on a heavy asset model to establish their moats. JD.com may not necessarily need food delivery, but the food delivery market certainly needs JD.com. QuestMobile data shows that the competition for rider traffic is key to closing the service loop. In February 2025, with JD.com actively promoting its food delivery business, its Dada Express Rider app attracted the use of riders from the same industry, and these "new users" were mostly deep users, with the average daily usage time significantly higher than the overall average level of the app. However, it is important to note that the usage level of "new users" on the Dada Express Rider app is relatively weak, more so as users who switch between two applications, making the "competition" to attract and retain these users the core of the competition between both sides. The number of riders and the support of delivery capacity are tricky issues for JD.com's entry into food delivery. It took JD.com 40 days from launch to reach a daily order volume of over one million; it took less than a month to grow from one million to five million daily orders. To compete for riders, JD.com announced that "it will gradually pay five social insurances and one housing fund for full-time riders of JD Food Delivery," which has also pressured Meituan to improve its social security policies. For merchants and consumers, the entry of new platforms will inevitably trigger a subsidy war between platforms, as no one likes a monopoly in the food delivery market. The food delivery market needs a "catfish" to stir things up. "War-like" Meituan? In 2010, many defined this year as the "beginning of the mobile internet." The most significant event of this year was the "Battle of a Thousand Groups"—with the introduction of the "group buying" concept into the country, numerous group buying websites launched simultaneously, and due to the extremely low entry barrier of the group buying market, over 5,500 group buying websites emerged within a year Almost all entrepreneurs and VCs believe that they need to rely on financing to expand their territory, spending huge amounts on offline advertising and finding endorsements. This has led to the first documented marketing war in the history of China's internet that involved hundreds of millions in funding. The intensity of this battle was unprecedented, with new group buying websites emerging almost every week and others shutting down just as quickly. Ultimately, out of 5,500 group buying companies, only Meituan survived. The "Battle of a Thousand Groups" officially marked the beginning of various battles in the mobile internet era. Meituan's victory made everyone realize that while plundering is important and burning money is crucial, strategic plundering and strategic spending are the keys to survival. At the beginning of the group buying war, the leader was Lashou.com. In the first half of 2011, Lashou.com raised a total of $160 million, while Dianping.com raised $127 million, and Meituan had only completed its Series A round, raising just $12 million. At that time, the logic of advertising was still relatively traditional, with almost all wealthy players seeking celebrity endorsements and aggressively competing for advertising space in subways, elevators, buses, and on television. If it came to offline advertising spending, Wang Xing couldn't match that amount. But he did two things: first, he consulted with former Alibaba president Guan Mingsheng, who advised that businesses shouldn't rely on advertising, as ground promotion is more effective, and that online marketing has a higher conversion rate for consumers; second, he sought out Gan Jiawei to build Meituan's ground promotion team. While competitors were desperately spending on offline advertising in first- and second-tier cities, Wang Xing quietly bought keywords online and opened up new markets in third- and fourth-tier cities through ground promotion. By the time competitors realized what was happening, they found that when searching for group buying online, the pages that popped up were all Meituan; by the time they tried to expand into third- and fourth-tier cities, Meituan had already monopolized them. Later, when Wang Xing summarized the reasons for Meituan's victory in the Battle of a Thousand Groups, he encapsulated it as "three highs and three lows," meaning high quality, low price; high efficiency, low cost; high technology, low profit margin. This logic is still used by Meituan today. Having experienced the fiercest competition, Wang Xing was no longer afraid of the fight. Meituan later adopted an aggressive "boundary-less expansion," successively entering multiple businesses such as food delivery, hotel and travel, movies, ride-hailing, and community group buying. Of course, there were successes and failures, but one constant was that each business burned a significant amount of money. Coincidentally, Liu Qiangdong also fought his way through. Another famous battle in the mobile internet era was the e-commerce price war initiated by Liu Qiangdong in 2012: Liu Qiangdong issued a challenge on Weibo, declaring that JD.com would have zero profit margins on large home appliances for three years, pricing them 10% lower than Suning and Gome. Subsequently, senior executives from Suning and Gome responded on Weibo, launching a counterattack, and Yixun and Dangdang also joined the fray, leading to a major melee in the e-commerce industry. JD.com gained a lot of traffic and attention in this battle. Wang Xing and Liu Qiangdong had many intersections in the past. Eight years ago, at the famous Wuzhen Internet dinner, Ma Huateng sat at the main seat, with Wang Xing and Liu Qiangdong on either side. This dinner was arranged by the two and later became known as the "Dongxing Bureau." At that time, JD.com and Meituan shared the same major shareholder, Tencent, and coexisted amicably in WeChat's traffic pool, united against external competition Here we need to interject another famous internet battle - on a certain day in 2017, Didi's Cheng Wei and Meituan's Wang Xing had a meal together, calling each other brothers. But a few hours later, Cheng Wei saw the news online: Meituan launched its ride-hailing service. Cheng Wei then released that famous harsh statement: "If you want to fight, then let's fight!" So, there are no eternal friends in business. In the context of the internet growth peaking, JD.com and Meituan, both of which have a strong competitive spirit, are bound to clash. Regardless of the outcome, what the market wants to see is that both sides can further refine their operations and improve user experience. Author of this article: Deng Shuanglin, source: China Entrepreneur Magazine, original title: "Wang Xing is destined to have 'no peace'" Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk