JP Morgan believes that China's food delivery market is entering a critical turning point.
According to the Chasing Wind Trading Desk, JP Morgan summarized the key points from the food delivery expert conference call in its latest report. JP Morgan pointed out that the overall order volume in the food delivery industry has declined, with market orders dropping from a peak of 151 million in September to 145 million in October, and expected to further decrease to 141 million in November, mainly due to weakened subsidies and seasonal factors.
JP Morgan believes that Meituan is expected to achieve breakeven by mid-2026, with a profit of 0.4-0.5 yuan per order in the second half of the year, while Alibaba will not be close to breakeven until the end of 2026. This means that Meituan's profitability recovery will occur earlier than expected, while Alibaba's food delivery business will still face pressure in the short term.
Regarding this food delivery battle, experts expect subsidies to gradually cool down in the first quarter of 2026, at which point the industry is expected to shift from cash-burning competition to rational management.
<h2>Overall market cooling, Meituan's share drops to 50%</h2>
The report pointed out that the growth of China's food delivery market is slowing down. Under the influence of platform subsidy cuts and seasonal factors, the national average daily order volume has dropped from 151 million in September to an estimated 141 million in November.
In terms of market structure, Meituan maintains a leading position with a 50% share (approximately 71 million daily orders), but the report states that its position is &#34;somewhat cooling.&#34;
Following closely is Alibaba, which occupies 42% (approximately 59 million daily orders), while JD.com ranks third with an 8% share (approximately 11 million daily orders).
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/07100d4a-acf1-4c7d-9d30-5086a3edbfc5.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/07100d4a-acf1-4c7d-9d30-5086a3edbfc5.png"/>
<h2>Path to profitability: Meituan leads, Alibaba follows</h2>
In terms of core profitability, the gap between platforms remains significant. Experts estimate that Meituan's average loss per order in September was 1.8 yuan, narrowing to 1.4 yuan in October, and expected to further improve to 1.2 yuan in November. In contrast, Alibaba's estimated loss per order in November is expected to be 3.0 yuan, while JD.com's loss is as high as 4.8 yuan.
The minutes estimate that Meituan's loss per order is far lower than its competitors, mainly due to its higher order density and fulfillment efficiency. Regarding the market's focus on the profitability timeline, the experts cited by the bank provided clear predictions:
<blockquote>
Meituan is expected to achieve breakeven by mid-2026, with profits per order reaching 0.4-0.5 yuan in the second half of 2026... while Alibaba may still incur losses in 2026, but the losses will gradually narrow, potentially approaching breakeven by the end of the year.
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Experts believe that the key path to profitability lies in implementing a more &#34;intelligent&#34; subsidy strategy, which means leaning towards high-ticket orders while optimizing fulfillment costs through increased order density.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0615cd5e-ed55-4298-a89f-ad6605b448a7.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0615cd5e-ed55-4298-a89f-ad6605b448a7.png"/>
<h2>Platform strategy differentiation: Meituan focuses on membership, Alibaba looks at conversion, JD.com defends its position</h2>
It is worth mentioning that the strategic focus of the three major platforms varies.
Meituan focuses on actively managing high-quality, high-frequency members, providing these user groups with more substantial coupon packages to enhance user loyalty. This strategy aligns with its goal of pursuing profit quality.
As for Alibaba, experts believe it will continue to make large-scale investments in the takeaway/flash purchase business. The turning point may come from two conditions: the takeaway business achieving breakeven and the conversion rate of takeaway traffic to e-commerce transactions increasing from the current 2% to 4-5%. Experts expect that once these two conditions are met, Alibaba will significantly reduce the intensity of subsidies and shift the focus of subsidies from takeaway to flash purchases.
JD.com, on the other hand, focuses on leveraging the two key flash purchase categories of 3C digital products and maternal and infant goods to serve JD Plus members, adopting a relatively focused strategy.
<h2>Subsidy War Pausing? Rational Competition Ahead</h2>
Looking ahead to 2026, the &#34;burning money&#34; war that once swept the market is expected to gradually cool down.
A JP Morgan report indicates that experts believe high subsidies will ease in the first quarter of 2026, driven by three factors:
<blockquote>
First, irrational low prices may attract regulatory attention; second, the seasonal factor of reduced winter beverage orders lowers the demand for high-frequency subsidies; finally, in the face of huge order volumes, sustained high subsidies are difficult for any platform to maintain. This suggests that the focus of competition in the industry may shift from a brutal price war to more sustainable operational efficiency and service quality
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JP Morgan stated that the market order volume has decreased from the peak of 151 million orders in September to 145 million orders in October, and is expected to further decline to 141 million orders in November, mainly due to weakened subsidies and seasonal factors. Meituan is expected to achieve breakeven by mid-2026, while Alibaba will not be close to breakeven until the end of 2026. It is anticipated that subsidies will gradually cool down in the first quarter of 2026, at which point the industry is expected to shift from cash-burning competition to rational management

- JPMorgan believes that China's food delivery market is at a critical turning point, with overall order volumes declining from a peak of 151 million in September to a projected 141 million in November due to reduced subsidies and seasonal factors.  
- Meituan is expected to achieve breakeven by mid-2026, while Alibaba may not reach this point until late 2026, indicating a faster recovery for Meituan's profitability.  
- The report suggests that the intense subsidy competition will ease by early 2026, shifting the focus towards sustainable operational efficiency and service quality.

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The takeaway battle enters the second half: order volume declines, average order value rises, Meituan is expected to achieve breakeven by mid-next year