---
title: "Meituan Conference Call: \"Resolutely Oppose Involution,\" \"Not Rushing to Be a 'Token' Factory,\" KeeTa Expected to Profit in Saudi Arabia"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/280633156.md"
description: "CEO Wang Xing explicitly stated \"resolutely oppose involution\" and will actively withdraw from low-efficiency price wars. Meituan is fully advancing AI, has opened its AI assistant \"Xiao Tuan\" to all users, and is committed to building a \"super AI gateway\" for local life. In terms of overseas expansion, the Saudi market is expected to achieve its first profitable month by the end of this year, and the company guidance indicates that the overall loss for new businesses in 2026 will not exceed that of last year"
datetime: "2026-03-26T12:49:01.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/280633156.md)
  - [en](https://longbridge.com/en/news/280633156.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/280633156.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280633156.md) | [繁體中文](https://longbridge.com/zh-HK/news/280633156.md)


# Meituan Conference Call: "Resolutely Oppose Involution," "Not Rushing to Be a 'Token' Factory," KeeTa Expected to Profit in Saudi Arabia

Facing unprecedented fierce competition, Meituan, while stabilizing its core commercial base, **is clearly rejecting industry "involution" and fully betting its future imagination space on the AI reshaping of the physical world and the acceleration of KeeTa's globalization.**

In the Meituan Q4 2025 and full-year earnings call tonight, Meituan Chairman and CEO Wang Xing and CFO Chen Shaohui presented a steady progress report in a complex environment to the market, and detailed the company's latest moves in core local commerce, AI strategy, retail M&A, and overseas business.

Financial data shows that Meituan's total revenue in the fourth quarter of 2025 reached 92.1 billion yuan, a year-on-year increase of 4.1%. As of the end of 2025, the company held a total of 166.8 billion yuan in cash, cash equivalents, and short-term treasury investments. Among its business segments, core local commerce revenue in the fourth quarter was 64.8 billion yuan; the new business segment, driven by the expansion of KeeTa and retail, showed strong performance with revenue reaching 27.3 billion yuan in the fourth quarter, a year-on-year increase of 18.9%.

In response to market concerns about the competitive landscape, performance guidance, and future growth engines, Meituan management provided clear answers.

## Facing Competition and Regulation Head-on: "We Resolutely Oppose Involution"

Regarding the recent market concerns about the price war in food delivery and the industry investigation by regulatory authorities, Wang Xing took a firm stance. He pointed out that the competent authorities hope to foster a healthy and orderly market, and that subsidy-driven or price-driven competition in the food delivery industry is "very typical irrational competition."

> "**We resolutely oppose involution**. We will actively cooperate with regulatory investigations."

Wang Xing emphasized that Meituan is withdrawing resources from low-average-order-value and low-quality orders to defend market share and promote high-quality growth. "Regardless of how the market environment evolves, our food delivery strategy remains clear and consistent."

This strategy has already shown initial financial results. Chen Shaohui revealed that the operating loss for core local commerce narrowed significantly quarter-over-quarter in the fourth quarter, mainly due to a substantial reduction in food delivery business losses. Wang Xing also provided optimistic guidance:

> "**We expect to see a more meaningful quarter-over-quarter improvement in food delivery loss per order in the first quarter compared to the fourth quarter of last year.**"

## Ambition in the AI Era: "Not Rushing to Become a 'Token' Factory"

AI is another major focus for the market in this conference call. As a service platform with a vast offline merchant network and fulfillment network, how will Meituan cope with the potential crisis of "super entry point" replacement brought by AI? Wang Xing stated:

> "I believe that while AI will fundamentally change everything, in this AI revolution, the only meaningful strategy is to take the initiative rather than just defend. But this does not mean we are rushing to be one of the 'token factories'; absolutely not."

Wang Xing believes that general AI cannot reliably manage the experience of real-world services. If it cannot deeply participate in fulfillment management, AI is "just a smart chatbot." Currently, Meituan has pushed its embedded AI assistant "Xiao Guan" to all users and is committed to building it into a user-centric AI intelligent agent for local services.

He vividly gave an example: users can directly ask "Xiao Guan" in natural language – "My friend and I are in Wangjing and Zhongguancun respectively, and we only have 2 hours for lunch. Can you find a restaurant in a central location that serves spicy dishes and has convenient parking?"

Wang Xing stated that to truly answer such long-text, real-world needs, **it requires not only large models but also real-time POI (Point of Interest) data, traffic information, restaurant availability, and actual reviews, which is precisely the deep moat Meituan has built in the physical world.**

## Retail M&A and Overseas Landscape: Proposed Acquisition of JD Assets, KeeTa Expected to Profit in the Middle East

In its search for new growth curves, Meituan is pursuing both instant retail and overseas markets (KeeTa) simultaneously.

During the call, Wang Xing confirmed **Meituan's plan to acquire JD.com's mainland China retail business for $717 million** (the transaction still requires regulatory approval). He stated that this move, in addition to demonstrating confidence in China's retail business, will significantly enhance Meituan's supply chain capabilities in the instant retail sector and substantially improve its coverage and service quality in East China.

In overseas markets, KeeTa's globalization is accelerating. Following its entry into Qatar, Kuwait, the UAE, and Brazil (focusing on São Paulo) in the second half of 2025, its mature market profitability model has been validated.

"KeeTa achieved its first profitable month in Hong Kong in October 2025, and it took us 29 months to achieve profitability," Wang Xing revealed an exciting market expectation:

> "Saudi Arabia is a market very conducive to achieving profitability for delivery businesses. **We expect KeeTa to achieve a profitable month in Saudi Arabia much faster than in Hong Kong, certainly before the end of this year.**"

Wang Xing emphasized that Meituan's core philosophy for overseas expansion remains creating value for the ecosystem, not involution. Even with the entry into numerous new markets in the second half of 2025, thanks to the efficiency improvements in domestic new businesses, **management expects the overall loss in the new business segment in 2026 not to exceed that of 2025.**

**The full transcript of the Meituan conference call is as follows:**

> Operator
> 
> Thank you for holding and welcome to Meituan's Q4 2025 and Full Year Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a Q&A session. To ask a question, please press star-one on your telephone keypad. I would now like to hand the conference over to Ms. Scarlett Xu, Head of Investor Relations and Capital Markets. Please proceed.
> 
> Scarlett Xu
> 
> Thank you, operator. Good evening, and good morning. Welcome to Meituan's Q4 2025 and Fiscal Year Earnings Conference Call. Joining us today are Mr. Wang Xing, Chairman and Chief Executive Officer, and Mr. Chen Shaohui, Senior Vice President and Chief Financial Officer. During today's call, management will first review our Q4 2025 and fiscal year results, followed by a Q&A session.
> 
> Scarlett Xu
> 
> Before we begin, please note that our remarks contain forward-looking statements, which involve risks and uncertainties, and actual future results may differ materially. Our remarks also contain certain non-GAAP financial measures, which should be considered as supplemental, and not as a substitute for the company's financial performance measures prepared in accordance with IFRS. For a detailed discussion of risk factors and non-GAAP measures, please refer to the disclosure documents on the Investor Relations section of our website. I will now turn the call over to Mr. Wang Xing. Please go ahead, Xing.
> 
> Wang Xing
> 
> Thank you, Scarlet, and hello, everyone. 2025 has been a year of both opportunity and challenge for Meituan. Amidst unprecedented competition, we have remained focused on serving consumers, merchants, riders, and all our ecosystem partners. We are committed to creating long-term value. In 2025, our platform achieved double-digit growth in both GTV and transaction volume, reaching new highs in new transaction users, user transaction frequency, and ARPU. These key metrics have solidified our position as the preferred local services platform for Chinese consumers.
> 
> In 2025, we comprehensively upgraded the Meituan membership program. This is our first consumer loyalty program to cover almost all categories. It has helped us drive cross-selling and enhance the stickiness of our core users.
> 
> Concurrently, leveraging our comprehensive advantages in the local services domain, we launched our proprietary AI assistants, Xiao Mei and Xiao Guan. We have brought AI technology into real consumption scenarios. Looking ahead, Meituan Membership and AI will continue to be key tools for us to provide differentiated and enhanced local experiences.
> 
> Regardless of how the market environment evolves, we remain focused on strengthening our long-term moat and promoting the healthy and sustainable development of the entire industry. We are also actively seeking new growth opportunities. During 2025, we made a series of key advancements. First, we accelerated our deep penetration into the supply side and, through supply-side innovation, built a comprehensive and high-value-for-money supply system covering all price ranges and diverse categories. This allows us to accurately meet users' comprehensive needs in food delivery, instant retail, and service retail, further consolidating our position as a one-stop local services platform.
> 
> In food delivery, we collaborated with merchants, focusing on innovations in products, store formats, and channels. Innovative models such as brand satellite stores, rotating self-service hot pot, and shared kitchens have helped numerous catering brands and small and medium-sized merchants improve operational efficiency and expand their businesses. We partnered with merchants to launch other models like "Shen Qiang Shou" (Super Grabber), offering premium yet affordable signature products across different price points to serve a broader consumer base.
> 
> In instant retail, we deepened our presence in local supply and became an important partner for many leading brands in their omnichannel strategies. We have continued to extend our reach in the supply chain. Our innovative supply models, including Meituan Instant Warehouses, Meituan Flash Warehouses, Brand Official Flagship Flash Warehouses, as well as our own Little Elephant Supermarkets and micro-warehouses, have become important supplies for instant retail.
> 
> We have worked closely with top liquor brands, and our liquor business has achieved rapid growth. In healthcare, we have continued to strengthen the local supply of common household medicines and medical devices, supported the online debut of numerous innovative drugs, and further expanded the coverage of 24-hour pharmacies, online consultations, and home testing services.
> 
> Little Elephant Supermarkets accelerated its urban expansion pace in the fourth quarter. Over the past few years, Little Elephant Supermarkets has built a strong supply chain, improved fresh produce quality, and developed industry-leading product capabilities. Our private label products now cover a wider range of categories, contributing a higher proportion of GTV.
> 
> In our "To-Store, Hotel & Travel" business, we launched high-quality merchant recommendation lists and expanded our "Must-Eat List" and "Black Pearl" list programs to more categories such as education, fitness, healthcare, and elderly care services. Based on deep insights into consumer trends, we further enriched our offerings in sports events, cultural and artistic ticket sales, and housekeeping services. Additionally, we have empowered over 1 million independent artisans (Xiao Yan) to digitize on our platform, enhancing our unique service ecosystem connection.
> 
> Second, we focused on enhancing our comprehensive service capabilities through product iteration and Meituan Membership upgrades to provide consumers with an excellent consumption experience. In terms of fulfillment, we upgraded services like "On-Time Guarantee" and "Dedicated Delivery," significantly expanding their coverage in 2025. This provides consumers with more reliable and higher-quality fulfillment assurance, consolidating our competitive advantage in fulfillment. In instant retail, we launched the industry's first full-cycle service guarantee program in collaboration with millions of merchants and brands.
> 
> This program offers free return shipping for high-tier members and selected brand products, setting service standards across the industry for experience, fulfillment, delivery, and after-sales support. In healthcare, we expanded our online consultation collaborations with doctors from top-tier hospitals. We upgraded verification and service guarantees for services such as dentistry and medical aesthetics. These efforts have comprehensively improved the reliability of online medical services. We have deeply integrated these high-quality services with our comprehensively upgraded Meituan Membership. We have launched a series of exclusive member benefits covering diverse consumption scenarios such as food delivery, hotel bookings, lifestyle services, travel, and healthcare.
> 
> These exclusive member benefit activities have significantly boosted user engagement and transaction frequency, enabling us to better serve our core user base. As a result, a large number of mid-tier members have been promoted to higher tiers. Amidst fierce competition, our high-value member base has continued to grow steadily, with both transaction frequency and consumption amounts increasing. Notably, they are also engaging in cross-purchases across a wider range of categories.
> 
> Our continuously enhanced Meituan Membership program provides strong multi-dimensional support. It promotes traffic, operations, and transaction growth, and also drives cross-selling between different categories and scenarios within core local commerce. Overall, we have consolidated our leading position in infrastructure and user mindshare, even in a highly competitive market environment.
> 
> We remain committed to fostering a sustainable ecosystem and are taking concrete actions to promote high-frequency, high-quality growth across the local services industry. We continue to empower small and medium-sized merchants. For example, we increase financial support, promote the "Bright Kitchen" project, and utilize AI tools to improve merchant operational efficiency. We aim to promote the healthy development of the catering service industry and address structural challenges such as marketing involution and food safety governance. We have also made progress in rider welfare.
> 
> In 2025, we took the lead in providing pension insurance subsidies to various types of riders nationwide. Our occupational injury protection pilot program has now been expanded to 17 provinces and municipalities, covering over 16 million riders. This protection carries no financial burden for the group. Furthermore, we continue to improve the multi-level welfare system for riders in areas such as healthcare, education, and housing.
> 
> Fourth, in our overseas markets, Keeta has accelerated its global expansion and achieved good growth momentum in 2025. In Hong Kong, Keeta consolidated its leading position and achieved positive unit economics in the fourth quarter. In Saudi Arabia, Keeta's order volume continued to grow throughout 2025, and it has become one of the preferred platforms for local consumers due to its higher quality service.
> 
> In the second half of 2025, we launched operations in Qatar, Kuwait, the UAE, and Brazil. All these new markets have shown strong growth momentum since their launch. Looking ahead, Keeta will continue to leverage its advantages in product, technology, and operational experience. We will work closely with merchants and riders in various global markets to jointly promote the digital transformation of the industry and enable more consumers in different countries and regions to enjoy our high-quality, efficient services.
> 
> Moreover, in 2025, we embraced the opportunities presented by artificial intelligence. We are committed to driving the AI transformation of the physical world by combining AI innovations with our proven physical service advantages. We have made significant investments in AI technology over the years. We have developed our proprietary series of multimodal long-text models based on our in-house R&D capabilities. Concurrently, we have also utilized state-of-the-art third-party models. We also leverage Meituan's unique digital assets, including extensive merchant information, high-quality and diverse supply, real consumption behavior, and user reviews.
> 
> We first tested the intelligent lifestyle assistant "Xiao Mei" on a standalone app. More importantly, we have pushed the AI assistant "Xiao Guan," embedded within the Meituan app, to all users. We have integrated AI technology with application scenarios on the Meituan platform, covering all categories of local services. The AI feature "Xiao Guan" in the Meituan app will fundamentally change how consumers use our app.
> 
> Search will evolve from simply entering keywords to making requests in natural language. "Xiao Guan," leveraging Meituan's rich supply and strong fulfillment capabilities, combined with the mature native interface of the Meituan app, has provided consumers with a brand new, easy-to-use, and excellent experience in 2025. In 2026, we will continue to optimize the user experience of "Xiao Guan." Our goal is to make "Xiao Guan" the most user-centric AI agent for local services.
> 
> Reflecting on 2025, we faced a complex external environment and unprecedented fierce competition. However, we have always adhered to our mission of "eating better, living better" and strived to create tangible value for consumers, merchants, riders, and all ecosystem partners. Looking ahead, we believe that core local commerce still holds strong growth potential and business resilience. We will continue to deepen supply-side penetration, enhance service quality, improve the Meituan Membership program, and invest in ecosystem building.
> 
> We will further consolidate our position as the preferred local services platform for most consumers and drive high-quality industry development. Simultaneously, retail business (including instant retail) and overseas markets are long-term growth curves with clear strategies and potential. We will adhere to investment discipline and actively explore these areas. More importantly, as we enter the era of artificial intelligence, we will steadfastly implement the "Retail + Technology" strategy, using AI to deeply empower the local services industry and bring better experiences to consumers and merchants. With that, I will now turn the call over to Shaohui to discuss our latest financial results.
> 
> Chen Shaohui
> 
> Thank you, Xing. Good evening, everyone. Let's now go through our Q4 financial results. Unless otherwise stated, all comparisons are on a year-over-year basis. In the fourth quarter, our total revenues were RMB 92.1 billion, up 4.1% year-over-year. Cost of revenues increased by 11.6 percentage points to 33.8%.
> 
> This was primarily driven by three factors: more consumer incentives deducted from revenues, increased rider incentives to maintain leading service quality, and higher costs from our overseas operations. Sales and marketing expenses ratio increased by 14.8 percentage points to 34.4%, mainly due to increased investments in promotion, advertising, and user incentives to enhance brand awareness and core user engagement. R&D expenses ratio increased to 7.6%, reflecting our increased investments in AI, while G&A expenses ratio slightly increased to 4%.
> 
> In the fourth quarter, total segment operating loss and adjusted net loss narrowed quarter-over-quarter to RMB 14.7 billion and RMB 15.1 billion, respectively. These sequential improvements reflect our focus on high-quality growth and execution efficiency amidst intense competition. As of December 31, 2025, we held RMB 166.8 billion in cash and cash equivalents and short-term treasury investments. Although operating cash flow remained negative, it showed sequential improvement with operating cash outflow narrowing to RMB 6.6 billion.
> 
> Now, let's turn to segment performance, starting with the Core Local Commerce segment. This quarter, we continued to see healthy growth in order volume and GTV. Our leadership positions in food delivery and Meituan's to-store businesses remained solid, while our market position in other categories within core local commerce remained stable. Our core user base continued to show healthy growth and higher engagement on our platform. These users are not only transacting more frequently but also exploring more services on our platform.
> 
> Their retention rates further improved this quarter compared to the third quarter. Several consumption categories, including pharmaceutical health, leisure entertainment, sports and fitness, pet services, and most categories within Meituan's instant retail, achieved double-digit growth in order volume and GTV.
> 
> Financially, segment revenue for the fourth quarter was RMB 64.8 billion, down 1.1% year-over-year. Although the intensity of subsidies in the food delivery industry eased slightly compared to the third quarter, it remained at historical highs. In the fourth quarter, we focused on high-quality growth and further withdrew resources from low-average-order-value and low-quality orders. This drove a sequential rebound in the average order value for food delivery, although our net AOV for food delivery remained significantly above the industry average. Intense competition did lead to a substantial year-over-year decline in food delivery AOV, impacting our commission revenue growth.
> 
> The impact of consumer subsidies on delivery service revenue also continued into the fourth quarter. Our online marketing revenue maintained stable growth. We continue to see that merchants across all categories, from small and medium-sized restaurants to offline retailers and other local service providers, consider Meituan a key marketing channel, and our advertiser base continues to expand steadily.
> 
> In terms of costs and expenses, we increased marketing expenditures and promotional activities to enhance our brand positioning and price competitiveness while driving engagement across all users. We allocated more resources to strengthen our membership program. We also provided more incentives to riders to ensure the quality of delivery services and user experience. Meanwhile, we continue to invest in ecosystem building.
> 
> The Core Local Commerce segment recorded an operating loss of RMB 10 billion in the fourth quarter, with operating loss narrowing significantly quarter-over-quarter. This improvement was mainly attributable to a substantial reduction in losses from the food delivery business. Turning to the New Initiatives segment, revenue reached RMB 27.3 billion in the fourth quarter, up 18.9% year-over-year, primarily driven by the expansion of Keeta and retail businesses. However, segment operating loss widened to RMB 4.6 billion, reflecting seasonal headwinds in businesses like bike sharing, as well as strategic investments in overseas expansion and retail businesses this quarter. This quarter, we expanded Keeta into four new markets, which required significant upfront investment.
> 
> But we are encouraged that in established markets such as Hong Kong and Saudi Arabia, unit economics have shown healthy improvement as order density and operational efficiency increase. We are optimistic that Keeta's new markets will follow this positive trend. For the retail business, it remains a long-term strategic focus for Meituan. Little Elephant Supermarkets has made solid progress over the past few years, with key metrics trending positively. In the fourth quarter, we accelerated our expansion into new cities and expanded our warehouse network to capture growing online retail demand.
> 
> We also strengthened our physical presence by opening our first Little Elephant Supermarket offline store in Beijing and launching several new "Huan Luo Hou" stores. Furthermore, we recently announced our plan to acquire JD.com's domestic assets, which we expect will further enhance Meituan's overall capabilities in the instant retail space.
> 
> We believe these strategic investments will solidify our competitive advantage and create long-term value in the retail domain. Looking ahead, we remain confident in the company's long-term, sustainable growth trajectory. We firmly believe that the industry will gradually move towards standardization, and competition will gradually return to normal under regulatory guidance. We will focus more on improving efficiency and achieving higher-quality growth, and continue to invest in technology, service quality, and ecosystem building. With that, we will now begin the Q&A session.
> 
> Operator
> 
> Thank you. If you'd like to ask a question, please press star-one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star-two. If you are using a speakerphone, please lift your handset before asking your question. Our first question is from Ronald Young from Goldman Sachs. Please proceed.
> 
> Ronald Young (Goldman Sachs Analyst)
> 
> Thanks. Shaohui, Scarlett, Xing, good afternoon. I wanted to ask about the competition on the AI super entry point or entrance, as this new era has begun. How does the company view this trend and its future development? From a risk perspective, does this pose a risk of losing its position as the primary traffic entry point, as was the case in the App era? What strategies or plans does management have to address this risk? Could you also share the latest progress on the AI agent and long text model?
> 
> Wang Xing
> 
> Thank you, Rona. On previous earnings calls, I have clearly stated that I believe while AI will fundamentally change everything, in this AI revolution, the only meaningful strategy is to take the initiative rather than just defend. But this does not mean we are rushing to be one of the "token factories"; absolutely not.
> 
> We view AI as a strategic opportunity to improve, strengthen, and even revolutionize our products in local services, which is our core business. I will elaborate slightly.
> 
> First, I believe AI requires significant investment. Therefore, since early 2023, we have invested heavily in capital expenditures and AI talent. Thus, aside from those cloud companies, we are likely one of the companies in China that invests the most in AI.
> 
> We have been doing this for over three years. This has obviously impacted our balance sheet and cash flow, but we will continue to commit to developing our own long-text large models because we believe that to accurately understand the physical world, based on our own massive proprietary data, we need to have the capability to build internal models. But at the same time, we are also working with the most advanced third-party models. We are striving to lead the upgrade of our main Meituan app to an AI-powered app to better serve consumers' end-to-end needs in local services and e-commerce.
> 
> Therefore, we believe that the competition for so-called "super entry points" fundamentally depends on the ability to accurately understand user needs and then efficiently execute tasks. But it is far more complex than a smart chatbot. The local services industry has highly complex use cases, a large amount of fragmented information, and a lot of real-time information from small and medium-sized merchants.
> 
> Many of these merchants are not fully digitized. Therefore, much of the data on both the merchant and consumer sides has not been effectively digitized to benefit from AI, and I believe this data needs to be digitized first. This is precisely what we have been doing for many years. Many merchants operate on our digitized systems, so we have unparalleled access to their data. But furthermore, a local services platform also needs to be able to deeply participate in the management of fulfillment services, otherwise, it is just a smart chatbot.
> 
> Here, I believe general AI cannot reliably manage and guarantee real-world service experiences. Meituan has already built an extremely rich set of physical world data, including merchant POI data, dynamic and real-time merchant operational data, and the most comprehensive and authentic user reviews for local services.
> 
> I believe that our deep expertise in food delivery networks, instant delivery networks, business expansion operations, retail supply, and future drone, autonomous vehicle, and other embodied intelligence technologies will provide us with significant advantages in connecting AI with the physical world. Our self-developed models are catching up with those open-source advanced models. Our intelligent agents are also rapidly evolving, which will help us seamlessly integrate digital and physical world information.
> 
> To give a few examples. We have recently made our AI assistant "Xiao Guan" available to all users within the Meituan app. Prior to this, we released a standalone AI app – "Xiao Mei." But for "Xiao Guan," the existing hundreds of millions of Meituan app users will benefit from these new AI capabilities. "Xiao Guan" covers all local service categories on our platform, allowing users to express their needs more naturally. In the past, most people were accustomed to searching with a few keywords. But now, with enhanced AI capabilities, "Xiao Guan" can understand longer queries expressed in natural language. "Xiao Guan" can access all the data within the Meituan app.
> 
> Let me give another specific example. It is common for users to find restaurants using the Meituan app. But sometimes it requires a better understanding of the use case. For example, one day I might ask Meituan a very specific question: I am in my office in Wangjing, in the northeast part of Beijing, and a friend who works in Zhongguancun (in the west of Beijing) will join me. We plan to have lunch together, and we only have 2 hours. Can you help me find a restaurant in a central location that has good private rooms, serves spicy dishes, and has convenient parking? I think this is a very natural, real-world need.
> 
> But in the past, limited by keyword search, users could not ask such questions. Now, with enhanced AI capabilities, this has become possible. This is a very real use case. But to truly answer this question, you need to have map information, POI information, and even traffic information. You also need to know not only the location of the restaurant but also its menu or real-time availability. Otherwise, you might recommend a very popular restaurant, but the user cannot book a table or private room.
> 
> This is not what the user needs. Therefore, to truly satisfy this need, our system needs to access a large amount of information about the physical world. AI is helping us integrate all this physical world data to provide a better user experience for our users.
> 
> Thus, leveraging Meituan's comprehensive and authentic merchant database, "Xiao Guan" can now actually answer these specific questions, not just about merchant or location, operating hours, store facilities, etc. "Xiao Guan" can also leverage our real user reviews and recommendations to provide valuable insights. With this enhanced reasoning capability, "Xiao Guan" can fulfill more personalized queries and generate one-stop guides for dining, entertainment, travel, shopping, and more. We are delighted to see that the "Xiao Guan" feature effectively met user needs during the Spring Festival, but this is just the beginning. It has received positive feedback and further enhanced user engagement.
> 
> In the future, I believe the models will become even better, and we will continue to deepen the integration of "Xiao Guan" features within the Meituan app. Our goal is to leverage new AI technologies to make the Meituan app the preferred destination for all users to meet their local needs and local service demands. We will enhance AI search capabilities and execution capabilities. Then, we will strive to upgrade Meituan into a leading AI-powered app, becoming the AI gateway for future local service demands. Thank you.
> 
> Ronald Young (Goldman Sachs Analyst)
> 
> Great. Thank you.
> 
> Operator
> 
> Thank you. Our next question comes from Ya Jiana from CICC. Please proceed.
> 
> Ya Jiana (CICC Analyst)
> 
> Thank you. Good evening. Thanks for answering my question. Regarding the State Council's investigation into the competitive landscape of the food delivery market since early January, have there been any changes to our business strategy? What changes have we observed in the competitive environment recently? Looking ahead, how do we plan to maintain or expand our competitive advantages in the current regulatory environment? Also, the narrowing loss for the food delivery business from Q4 to Q1, that's my question. Thank you.
> 
> Wang Xing
> 
> Thank you, Zhang Yao. We believe the direction of regulation is very clear. The competent authorities resolutely oppose so-called "involution" and wish to foster a healthy and orderly market. Subsidy-driven or price-driven competition in the food delivery industry is very typical irrational competition and is very typical involution. We attach great importance to this issue. I want to reiterate our position. We resolutely oppose involution. We will actively cooperate with regulatory investigations. At the same time, we are withdrawing resources from low-quality orders. We strive to defend our market share and market leadership.
> 
> Therefore, in 2026, regardless of how the market environment evolves, our food delivery strategy will remain clear and consistent. First, we will continue to focus on doing the right thing, strengthening our core advantages, which include expanding high-quality choices, ensuring fast and reliable delivery, and providing continuously competitive prices. Second, as I mentioned earlier, we will maintain our leadership position while concentrating resources on driving high-quality growth and improving operational efficiency. Third, we will continue to create value, in addition to the work we are currently doing, such as supply-side innovation, providing year-round support to riders, and improving welfare benefits.
> 
> We are also promoting product and service upgrades, as well as innovations in AI and other automation technologies, to enhance efficiency and experience across the entire industry. Therefore, looking ahead, we believe competition will shift towards in-depth exploration of user lifetime value, improving supply quality and diversity, and providing a seamless end-to-end user experience. In recent months, despite continued intense competition and considerable irrational subsidies, Meituan has remained the preferred choice for high-value consumers when selecting food delivery services, because we offer a better overall experience.
> 
> We have maintained a competitive advantage in mid-to-high average order value orders, with our average order value continuously remaining significantly above the industry average, thanks to our focus on high-quality growth and improved order structure. We expect to see a more meaningful quarter-over-quarter improvement in food delivery loss per order in the first quarter compared to the fourth quarter of last year. We believe that a more regulated market will help shift competition from purely subsidy wars to innovation, service experience, and efficiency.
> 
> These are precisely the areas where we have greater advantages. We will continue to hone our core strengths, through better operations and innovation and iteration of the products themselves, which will help us consolidate our structural advantages in mid-to-high average order value orders, high-value users, and efficient delivery networks. We are confident in the competitiveness and long-term potential of our food delivery business. Thank you.
> 
> Ya Jiana (CICC Analyst)
> 
> Thank you.
> 
> Operator
> 
> Thank you. Our next question is from Kenneth Kong from UBS. Please proceed.
> 
> Wang Xing
> 
> Hi, good evening, management. Thank you for taking my question. We note that since Q4 last year, Douyin has significantly increased subsidies for its to-store business, and these subsidies are expected to remain high in 2026. So, we would like to understand your view on the current local services competitive landscape and how Meituan's current strategy differs from the competitive cycle in 2022-23?
> 
> Wang Xing
> 
> Thank you for Kenneth's question. For your question, the short answer from a short-term perspective is: yes, we are seeing competitors increasing their investment and spending recently. This might negatively impact our short-term profitability. This is the reality we are facing, and we hope the market can understand it. But I will spend more time discussing our long-term strategy for this business. I think understanding how the competitive landscape has changed significantly in recent years is key.
> 
> The entire to-store industry has undergone significant changes over the past few years. In terms of competition, industry participants now have considerably differentiated focus on categories, merchants, and consumption scenarios. Leading participants are now placing greater emphasis on efficient operational strategies. For us, our paramount priority has always been the long-term sustainable development of this business, rather than winning tactically in the short term. We firmly believe that the end-to-end business still has huge potential, but it still requires significant investment and more innovation across the entire value chain. Regardless of how the landscape changes, providing efficient and high-quality services to consumers and merchants, and driving strong offline consumption growth, are keys to success.
> 
> Over the years, we have seen changes in consumer demand; they are seeking more personalized experiences and value for money, while the demand for extended services (such as online tutoring, booking, online ordering for offline pickup) continues to grow. On the supply side, forms of supply and service categories are continuously innovating, keeping pace with consumption trends. This sustained momentum is also a key driver of digital transformation. On the technological frontier, consumer and merchant expectations and demands for AI-driven products are growing. In light of these trends, Meituan remains vigilant and continues to innovate, leveraging our extensive experience and deep understanding of the industry.
> 
> We have and will continue to enhance our differentiated advantages in terms of category mix, merchant ecosystem, and operational efficiency. For example, thanks to Meituan and Dianping's years of expertise and insights in the catering sector, we have noticed changes in the business logic of the catering industry, and we directly share these insights with high-end catering partners to help them maintain their leading positions and quickly adapt to evolving consumer demands. We are also continuously tracking industry trends and exploring new supply offerings such as self-service models, leisure and entertainment, sports and cultural event ticketing, and self-operated housekeeping services.
> 
> The authentic user reviews accumulated on our platform over the years, along with integrated one-stop online services (including group buying, online booking, pickup, Meituan reservations, QA management), have become our unique competitive advantage. Additionally, over 1 million artisans have become unique supply on our platform. On the technology front, our AI agent "Merchant Operations Assistant" helps merchants optimize their digital services. Merchants can provide personalized services by utilizing AI to retrieve and analyze consumer preferences and can intelligently analyze consumer feedback to improve operations.
> 
> Furthermore, our AI agents, such as digital employees and AI business development, simplify merchant operations in areas like store opening, daily operations, and customer acquisition. We will continue to provide merchants with their own AI assistants. In 2026, we will further differentiate our services and allocate more resources to achieve higher ROI. We will strengthen our position in core categories and minimize ineffective investments in non-core areas.
> 
> Looking ahead, we will remain committed to providing consumers with a seamless service loop, offering precise decision-making and a one-stop experience. We aim to establish a more comprehensive merchant empowerment system covering customer acquisition, conversion, and retention. We will continue to promote the sustainable development of the industry through digital transformation. Thank you. Thank you.
> 
> Operator2
> 
> Thank you. Our next question is from Thomas Cheong from Jefferies. Please proceed.
> 
> Wang Xing
> 
> Hi, good evening.
> 
> Thomas Cheong (Jefferies Analyst)
> 
> Thank you, management, for taking my questions. What synergies can we expect from Meituan's planned acquisition of JD (Bing Bong)? How is Meituan's retail business strategy evolving? What is the strategy for Meituan's self-operated retail business?
> 
> Wang Xing
> 
> Thank you, Thomas, for the question about JD. Regarding our retail business strategy, we recently announced the acquisition of JD.com's mainland China business for $717 million. But please note that this transaction is still subject to regulatory approval. The reason, obviously, the most important reason, is our confidence in China's retail business, both online and offline. Beyond that, there are two key reasons for this acquisition. First, it will enhance Meituan's overall capabilities in the instant retail sector, particularly strengthening our supply chain capabilities. It will also help further improve the operational efficiency of our retail business.
> 
> Second, JD has established a strong market position in East China. Through this acquisition, if successful, we will significantly increase our coverage and service quality in this region. The retail business is highly aligned with the company's mission and is one of our long-term strategic priorities. As market dynamics evolve, we observe that self-operated supply, such as Little Elephant Supermarkets, is becoming increasingly important in the instant delivery ecosystem. Little Elephant Supermarkets represents high-quality supply assurance on the platform, providing users with a more reliable shopping experience. Given the growth potential of this industry, we see immense opportunities.
> 
> Last year, we restructured our retail business portfolio, shifting towards a more efficient approach to drive sustainable growth. Over the past few years, Little Elephant Supermarkets has maintained strong growth momentum while continuously improving operational efficiency. We have expanded our private label product offerings, covering nighttime consumption scenarios, and maintained industry-leading fulfillment speed and experience. We believe Little Elephant Supermarkets represents a model where Meituan can leverage its advantages and move towards a clear path to profitability. Looking ahead, we plan to extend this model to more cities and regions, bringing faster, fresher, and more affordable instant retail to more consumers. Thank you. Thank you.
> 
> Operator2
> 
> Thank you. Our next question is from Gary New from Morgan Stanley. Please proceed.
> 
> Gary New (Morgan Stanley Analyst)
> 
> Hi, thank you for the opportunity to ask a question. My question relates to Keeta. Keeta has made some progress in both Hong Kong and Saudi Arabia, but the road ahead looks quite challenging given regulatory and competitive constraints. Could management share any updates on the company's overseas strategy for 2026? How much are you planning to invest in Brazil this year? When do you expect Saudi Arabia to achieve profitability? In 2026. Thank you.
> 
> Wang Xing
> 
> Thank you, Gary. Before discussing the specific details of our 2026 international strategy, I would like to take this opportunity to express my deepest gratitude to our employees, merchants, riders, and all ecosystem partners in the Middle East. Thank you for your dedication in your work and for providing essential services to all users. During this difficult time, we are doing everything we can to ensure your safety and livelihood, and to overcome these challenges together.
> 
> Now, back to Gary's question. First, I want to emphasize that Meituan's core philosophy outside of China has always been to create value for the entire ecosystem and promote long-term industry growth, not involution. This is never what we wanted to do, and our international business through Keeta will follow the same principles. We want to grow together with local players. We want to help accelerate the digital transformation of the local services industry and jointly serve and expand larger markets. Therefore, ultimately, we want to create new value for users, merchants, riders, and other partners in these markets.
> 
> In 2026, Keeta will primarily focus on our current markets, as each market has different product dynamics. Therefore, we will remain flexible and adjust our strategies based on local conditions. Compliance will always be a top priority while balancing growth and profitability in each market and at each stage. Therefore, we are working very proactively with local regulatory bodies. In the long term, we are committed to global operations, with a strategic focus on instant delivery and instant retail, areas where we can leverage our core strengths.
> 
> Regarding the markets you mentioned, as I said last quarter, Keeta achieved its first profitable month in Hong Kong in October 2025. Allow me to remind you that Keeta was launched in Hong Kong in May 2023 and achieved break-even in October 2025. So it took us 29 months to achieve profitability. This year, we will focus on further improving operations. For Saudi Arabia, it is a market very conducive to achieving profitability for delivery businesses. Therefore, we expect Keeta to achieve a profitable month in Saudi Arabia much faster than in Hong Kong. Certainly before the end of this year.
> 
> In fact, I would say we are very close, and it will happen in the near future. We have achieved break-even in some cities, and I believe other cities will follow suit soon. Because recently we have significantly reduced subsidies in Saudi Arabia, but our order volume has remained resilient. This means users choose Keeta because of our better service, not for subsidies or lower prices.
> 
> Therefore, in 2026, we will further optimize our operations in other Middle Eastern markets, and our orders are also growing rapidly. With our experience in Saudi Arabia (Southern Rib) and regional brand recognition, I believe we can rapidly improve operational efficiency in these new markets. However, our growth in these markets in 2026 is still subject to external risks, such as the current complex regional situation. Regarding Brazil, we see tremendous long-term value. Therefore, we remain firmly committed to its long-term growth.
> 
> Currently, our operations are concentrated in São Paulo, the largest city in Brazil. Before expanding nationwide, we prioritize perfecting our business model in São Paulo. At the same time, we will actively explore business strategies to build differentiated advantages.
> 
> Overall, Keeta's losses in 2026 will still be significant because we entered many new markets and countries in the second half of 2025. Orders in these markets are still scaling. However, this will be offset by more efficient improvements in our domestic new businesses. Therefore, we expect the overall loss in the new business segment in 2026 not to exceed that of 2025. Thank you.
> 
> Operator2
> 
> Thank you. There are no further questions at this time. I will now turn the call back over to Scarlett for closing remarks.
> 
> Scarlett Xu
> 
> All right. Thank you everyone for joining today's call. We look forward to speaking with you again next quarter. Thank you.
> 
> Operator2
> 
> Thank you. That concludes our conference call for today. Thank you for your participation, and you may now disconnect.

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