--- title: "The One-Year Bill for the Food Delivery War: 150 Billion Burned, What Has Changed?" type: "News" locale: "en" url: "https://longbridge.com/en/news/288850460.md" description: "Meituan released its Q1 2026 financial report, revealing that over the past year, Meituan, Alibaba, and JD.com burned at least 150 billion yuan in the food delivery war, pushing daily order volume to over 200 million. As the conflict subsides and market share stabilizes, the three companies are shifting strategies: Meituan is reducing subsidies to protect its share, Alibaba is redirecting funds to AI, and JD.com's profits are returning to normal. Regulators have signaled a halt to vicious competition, marking the industry's entry into a phase of healthy development" datetime: "2026-06-05T10:55:50.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288850460.md) - [en](https://longbridge.com/en/news/288850460.md) - [zh-HK](https://longbridge.com/zh-HK/news/288850460.md) --- # The One-Year Bill for the Food Delivery War: 150 Billion Burned, What Has Changed? On June 1, Meituan released its Q1 2026 financial report. This marks the completion of a full-year accounting for the food delivery war that lasted from Q2 2025 to this quarter. According to estimates, Meituan, Alibaba, and JD.com burned at least 150 billion yuan on food delivery, forcibly pushing the daily volume of the catering delivery business, originally around 80-90 million orders, to a peak of over 200 million orders. This battle changed many things. A little over a year ago, Ele.me still operated under its own name. When most people heard "instant retail," they thought of Meituan Instashopping. No one ordered food delivery on JD.com, and the Hang Seng Tech Index had not yet been mocked by the market as the "Hang Seng Food Delivery Index." A year later, Ele.me has been merged into Alibaba's China E-commerce Business Group. JD.com's food delivery service has reached a daily average of about 10 million orders, while Meituan maintained its number one market share position despite losses for three consecutive quarters. The war is receding. The market share landscape among the three has stabilized for two quarters, with overall order volumes declining from their peak. In the latest quarterly reports, the posture of all three companies has clearly changed. Meituan's adjusted net profit narrowed significantly compared to the previous two quarters, with more emphasis placed on retail in its financial report and conference call. Alibaba's net profit was nearly wiped out, hitting a two-year low, but more capital is no longer being burned on food delivery; instead, it is being spent on AI. JD.com's net profit has basically returned to the level seen when the food delivery war began. An insider at Meituan told "Dingjiao One" that in Q1 2026, Meituan's daily average food delivery orders were around 65 million, while Taobao Instashopping and JD.com Food Delivery were approximately 50 million and 9 million, respectively. The order ratio among the three remained basically flat compared to Q4 last year, with overall order volumes decreasing across the board. "Meituan's current goal is to reduce subsidies while ensuring a leading market share. It can accept competitors' daily order volumes not exceeding 80% of its own," the insider said. Strategies are shifting among the three, and regulation is tightening. In late March this year, the State Administration for Market Regulation republished an article from Economic Daily titled "The Food Delivery War Should End," which the market viewed as a clear signal from regulators to halt vicious platform competition and guide the industry toward healthy development. With multiple factors converging, the most intense period of the food delivery war has passed, but this does not mean competition among the giants will weaken. ## No Winner on the Books, But Each Has Its Own Way of "Winning" Looking at the bill from the past year, there is no absolute winner among the three main participants in this food delivery war. Let's first look at Meituan's financial report. Q1 continued the tone of the previous quarter, with a slight improvement in revenue scale. Core Local Commerce (CLC) achieved revenue of 64.1 billion yuan during the period, a slight year-on-year increase of 0.2%, marking the first positive growth in two quarters. The company's overall operating loss also narrowed from over 10 billion yuan in the previous two consecutive quarters to a loss of 6.5 billion yuan. Both figures slightly exceeded market expectations. Revenue scale and operating profit are the two indicators in the financial report most closely linked to the food delivery war. In Meituan's financial reports, subsidies provided to users are not fully recorded as expenses; instead, a portion is recorded as a deduction from revenue. This means that revenue growth often reflects the intensity of food delivery subsidies more intuitively than profit growth. In Q3 and Q4 2025, Meituan's CLC revenue declined year-on-year, with a drop of nearly 3% in Q3, the most intense period of the food delivery war. Returning to parity in Q1 this year is itself a signal that subsidies are tapering off. The reduction in losses exceeded expectations, partly because revenue was slightly better than expected. In Bloomberg's consensus estimates, CLC revenue for Q1 this year was expected to be flat compared to last year, but the actual result was about 75 million yuan higher than expected. Another reason was a significant narrowing of sales expenses. In Q1 this year, Meituan's sales expenses were approximately 23 billion yuan, a noticeable decrease from the over 30 billion yuan in the previous two quarters. During the earnings conference call following the financial report release, Meituan revealed that the unit economics (UE) for pure catering food delivery, excluding non-food instant retail, had turned positive in April and May of this year. A securities analyst who has long followed Meituan told "Dingjiao One" that the lowest point for Meituan's food delivery UE in Q3 last year was approximately -2 yuan. By the end of Q1 this year, this had narrowed to about -1 yuan. If management's statement about achieving break-even in Q2 holds true, the rate of loss reduction in Q2 is accelerating significantly. Furthermore, the analyst stated that the UE of Meituan's main competitors was once 4 yuan lower than Meituan's last year, meaning Meituan lost 2 yuan per order while competitors lost 6 yuan. In Q1 this year, this gap has narrowed to within 3 yuan, indicating that subsidy intensity across the board is significantly decreasing. Financial reports released by Alibaba and JD.com in recent weeks also confirm this trend. In Alibaba's Q1 financial report, if amortization and impairment of intangible assets and investments in the Qianwen APP are excluded, the adjusted net profit level declined slightly compared to the same period last year. JD.com's adjusted net profit attributable to shareholders in Q1 this year returned to a level basically flat with Q2 2025. Behind the hundreds of billions in burned profits, the book wins and losses are only half of the story. According to previous understanding by "Dingjiao One," in the last three quarters of last year, Meituan, Alibaba, and JD.com invested subsidies of 40 billion, 70 billion, and 35 billion yuan, respectively, in the food delivery war. In total, at least 145 billion yuan was burned within the year. Although subsidy intensity weakened in Q1 this year, the total subsidies from the three companies still exceeded 10 billion yuan. After one year of food delivery war, at least 150 billion yuan in profits was burned. However, behind what appears to be a lose-lose situation, each company obtained what it wanted. JD.com took one year to achieve a daily average of about 10 million food delivery orders. This scale is equivalent to half of Ele.me's daily average before the food delivery war began, allowing JD.com to basically establish a foothold in the food delivery market and successfully build user awareness for ordering food on JD.com. Alibaba's food delivery market share grew from one-quarter to nearly matching Meituan, even surpassing Meituan to become the industry leader in certain months. More importantly, instant retail businesses, represented by food delivery, drove the growth of its e-commerce business. During Alibaba's Q1 earnings conference call, Jiang Fan stated that the synergy between instant retail and traditional e-commerce businesses is reflected in driving customer acquisition, increasing user activity, meeting diversified consumption needs, increasing transaction volume, improving monetization capabilities, and supporting logistics infrastructure. Alibaba's Q1 GMV and CMR showed strong growth momentum, with instant retail playing a key role. For Meituan, although it lost its previously absolute market leadership, it consolidated its core food delivery base at a smaller cost than its competitors. Additionally, Meituan still holds an advantage in the high-average-order-value segment of the food delivery market. ## Burning Hundreds of Billions in Profits in One Year Exceeded All Participants' Expectations Looking back, when this battle began in Q2 2025, no company could have predicted it would evolve into its current state. A confrontation between JD.com and Meituan was inevitable, a consensus in the internet circle for years prior to 2025. As JD.com's delivery timeliness improved and Meituan's food delivery categories expanded, the business boundaries between the two became increasingly blurred, making a head-to-head clash unavoidable. On February 11, 2025, JD.com officially announced the recruitment of catering food delivery merchants. A week later, JD.com announced it would gradually pay social insurance and housing fund contributions for its full-time food delivery riders, with all costs borne by JD.com. The market initially interpreted this move as a "trial." Even though JD.com briefly pushed daily order volume to 25 million through large subsidies in the early stages, Meituan's internal team did not feel a strong sense of crisis. An insider at Meituan told "Dingjiao One" that at the beginning of 2025, Meituan's focus was still on retail. Management frequently inspected offline retail brands to discuss potential cooperation. At an internal meeting, Meituan executives proposed focusing on how JD.com's food delivery business could drive its main e-commerce site, rather than fixating on competitors' order volumes. The implication was that if JD.com performed well, Meituan could learn from it when expanding its retail business in the future. The situation began to change in late April. With the entry of Taobao Instashopping, Meituan saw a significant decline in order volume and market share in certain cities and regions. To maintain its leading advantage, it had to follow suit with subsidies. One detail is that members of Meituan's S-team, who had not participated in Meituan's monthly financial meetings for years, began attending together to monitor subsidy situations for Meituan Food Delivery and Instashopping, as well as their subsequent impact on company profits. Meituan's initial judgment was that this food delivery war would be a protracted battle lasting one to two years, and that the company might need to spend an additional 15 to 20 billion yuan on subsidies throughout 2025. From the final results, Meituan underestimated the cruelty of this war. By mid-June, just over a month after its launch, Taobao Instashopping's daily average food delivery orders had approached half of Meituan's, and it continued to increase subsidies, pushing the war to another level. In August, leveraging the marketing campaign "The First Cup of Milk Tea in Autumn," Taobao Instashopping pushed its single-day order peak further to 120 million. During Alibaba's Q2 earnings conference call, Jiang Fan stated that Taobao Instashopping's orders had "surpassed" competitors, saying, "Looking solely at the share of home-delivered food orders, we are already leading the industry." According to "Dingjiao One," during the early stages of the food delivery war, at a one-on-one investor communication session organized by sell-side analysts, an Alibaba executive stated that there was no cap on investment in food delivery subsidies, as competitors should not know their bottom line. Meituan quickly realized it had underestimated its opponents' determination to invest and rapidly followed with subsidies, pushing its daily order peak to 150 million to ensure its leading position. Throughout Q3 2025, the combined daily average food delivery orders of the three platforms briefly exceeded 200 million. Meanwhile, the year-on-year decline in quarterly net profit for all three exceeded 50%. It was unprecedented in recent years for three profitable companies to simultaneously burn more than half of their profits. As profits became unsustainable, subsidy intensity began to tighten by the end of Q3. Wang Puzhong, CEO of Meituan CLC, called through media outlets for the industry to return to normal business judgment and rationality. JD.com CEO Xu Ran also stated that JD.com would not focus on competitors' minor moves and that JD.com's approach to food delivery was "not fighting for immediate gains." Coupled with successive rounds of tighter industry regulation, the food delivery war was temporarily paused. ## Competition and Threats Beneath the Surface Remain Severe Entering 2026, the tone of the food delivery war is clear. The intensity of catering food delivery has decreased, but competition in the broader instant retail battlefield will not ease. According to LatePost, in May this year, Alibaba underwent significant personnel adjustments. Group CTO Wu Zeming joined the Alibaba Partnership Committee, becoming its fifth member. The reporting line for Hema CEO Yan Xiaolei was adjusted from Wu Zeming to directly report to Jiang Fan, who oversees Alibaba's entire commercial sector. Both adjustments are highly relevant to instant retail. Wu Zeming is also the CEO of Taobao Instashopping, and Hema is an important component of Alibaba's instant retail sector. Currently, Alibaba's instant retail format covers offline supermarkets and department stores, Hema stores, Hema front warehouses, and Tmall Supermarket, combining platform and self-operated models. On a full-scope basis, non-food instant retail daily order volume has reached half of Meituan's. This organizational structure adjustment also means that Alibaba has unified all instant retail-related formats under the China E-commerce Business Group, managed centrally by Jiang Fan. Additionally, Alibaba is participating in negotiations to acquire PuPu Supermarket. Media reports a few weeks ago indicated that Alibaba, JD.com, and Meituan were all involved in the acquisition of PuPu Supermarket, a fresh food front warehouse operator. Sources close to Meituan told "Dingjiao One" that Meituan only participated in acquisition negotiations in the early stages but did not continue due to overly high bids. Compared to Alibaba's aggressive expansion in instant retail, Meituan hopes to rely more on its existing Meituan Instashopping and self-operated front warehouse brand, Xiaoxiang Supermarket, to expand into the non-food market. In the latest quarterly financial report, Meituan adjusted its disclosure methodology, listing revenue from self-operated businesses such as Xiaoxiang Supermarket, Kuailv, pharmaceuticals, and alcohol separately as "Product Sales Revenue." Disclosing this data separately provides a clearer picture of Meituan's self-operated retail business. In Q1, product sales revenue from Meituan's new businesses reached 17.989 billion yuan, a year-on-year increase of 40.7%, with this incremental growth primarily contributed by Xiaoxiang Supermarket. In February this year, Meituan further strengthened its front warehouse layout by acquiring Dingdong Maicai. On February 5, Meituan announced it would acquire all issued shares and domestic business of Dingdong Maicai for $717 million (approximately 5 billion yuan). Dingdong Maicai owns over 1,000 front warehouses and 7 million monthly active users. This acquisition mainly serves as a supplement to the Xiaoxiang Supermarket format. Meanwhile, the platform-model instant retail business, Meituan Instashopping, continues to expand, having built over 30,000 front warehouses and planning to build 100,000 by 2027. Compared to Alibaba and Meituan, JD.com does not pursue scale advantages but focuses more on synergy between its various businesses, such as JD Seven Fresh and JD Miaosong, as well as supply chain construction. The most intense moment of the food delivery war has passed, but this does not mean competition among giants will weaken; the battlefield has simply shifted. In the new battlefield of instant retail, challenges come not only from outside but also from within. Alibaba must balance its investments in AI and mass consumption over the coming year. Prolonged two-front battles have already placed immense pressure on profits. The problem Meituan needs to solve may be the synergy between its platform and self-operated businesses. For a long time, Meituan Instashopping and Xiaoxiang Supermarket, the two main forces in instant retail, operated independently. The former belongs to CLC, while the latter belongs to grocery retail. Xiaoxiang paid lower commissions to Meituan food delivery riders than it did to itself. As Alibaba fully integrates its instant retail formats for a full-scale assault, Meituan should think more deeply about how to resolve business synergy issues. Furthermore, during the heated food delivery war, Alibaba's e-commerce business and Meituan's in-store business both suffered varying degrees of "surprise attacks" from competitors, with Douyin causing the most significant impact. For the main participants in the food delivery war, threats beneath the surface may be more severe than visible competition. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it consider the specific investment goals, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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