A food delivery war has cost JD.com, Meituan, and Alibaba over 20 billion yuan in combined earnings in just one quarter. Facing massive losses from irrational competition, when this war of attrition will end remains a key market focus.

As of August 29th, JD.com, Meituan, and Alibaba have all released their Q2 2025 (calendar year) financial reports. This quarter, all three companies shared a common characteristic: year-over-year declines in operating profit.

JD.com's Q2 2025 net income attributable to ordinary shareholders was 6.2 billion yuan, compared to 12.6 billion yuan in Q2 2024, representing a 51% year-over-year decrease. Operating profit shifted from a profit of 10.501 billion yuan in the same period last year to a loss of 859 million yuan.

Meituan's Q2 2025 adjusted net profit was 1.49 billion yuan, down 89% from 13.61 billion yuan in the same period last year. Operating profit also declined significantly from 11.257 billion yuan in the same period last year to 226 million yuan.

Alibaba's Q2 2025 (calendar year) net income attributable to ordinary shareholders was 43.116 billion yuan, compared to 24.269 billion yuan in the same period last year, representing a 78% year-over-year increase. However, operating profit was 34.988 billion yuan, down 3% from 35.989 billion yuan in the same period last year.

Looking solely at operating profit, JD.com decreased by approximately 11.4 billion yuan compared to the same period last year; Meituan decreased by approximately 11 billion yuan; and Alibaba decreased by approximately 1 billion yuan. Roughly calculated, the three companies' combined operating profit was 23.4 billion yuan less than the same period last year.

**Q2 Marketing Expenses Exceed 100 Billion Yuan**

The year-over-year decline in operating profit for JD.com, Meituan, and Alibaba is partly due to the white-hot competition among the three giants in food delivery and instant retail.

Looking at marketing expenses alone, the three companies' combined sales and marketing expenses for Q2 2025 (calendar year) totaled 102.7 billion yuan, with JD.com spending 27 billion yuan, Meituan 22.5 billion yuan, and Alibaba 53.2 billion yuan.

In Q2 2025, JD.com's marketing expenses surged from 11.9 billion yuan in Q2 2024 to 27 billion yuan in Q2 2025, representing a 127.6% year-over-year increase. JD.com's financial report explained that this increase was mainly due to increased spending on promotional activities for new businesses.

JD.com's food delivery business is classified under the "new businesses" segment. Besides food delivery, this segment includes JD Property Development, JD Worldwide, and overseas operations.

According to the financial report, JD.com's new businesses generated revenue of 13.852 billion yuan in Q2 2025, a significant 198.8% increase from 4.636 billion yuan in the same period last year. However, this rapid growth did not translate to corresponding operating profit improvements. Affected by increased promotional spending for new businesses, the operating loss for JD.com's new businesses expanded from 695 million yuan in the same period of 2024 to 14.777 billion yuan.

The nearly 15 billion yuan operating loss from new businesses directly caused JD.com's overall operating profit to shift from over 10 billion yuan profit in the same period last year to a loss of over 800 million yuan this quarter. The operating profit margin also declined from 3.6% in the same period last year to -0.2%. JD.com explained in its financial report that the decline in operating margin was mainly due to the group's continued strategic investment in new businesses.

The operating profit pressure from strategic investments in food delivery and other new businesses is similarly reflected in Meituan. Unlike JD.com, which classifies food delivery under new businesses, Meituan's food delivery business belongs to its core local commercial segment.

Meituan's business is primarily divided into two major segments: core local commercial and new businesses. Core local commercial mainly includes food delivery, in-store services, hotels and travel, and flash sales; new businesses mainly include Xiaoxiang Supermarket, overseas business Keeta, Kuailv, bike-sharing, and ride-hailing services.

In Q2 2025, Meituan's core local commercial revenue increased from 60.7 billion yuan in the same period of 2024 to 65.3 billion yuan. However, affected by intensifying market competition this quarter, the segment's operating profit declined 75.6% year-over-year from 15.2 billion yuan in the same period last year to 3.7 billion yuan, with the operating margin also declining 19.4 percentage points year-over-year to 5.7%.

Regarding the decline in operating margin, Meituan explicitly stated in its financial report that it was mainly affected by irrational competition that began this quarter.

To respond to fierce competition in food delivery and instant retail, Meituan significantly increased its investment in user incentives, promotions, and advertising this quarter. Financial data shows that its sales and marketing expenses surged from 15.6 billion yuan in Q1 to 22.5 billion yuan in Q2, a 44.8% quarter-over-quarter increase. The expense ratio also increased from 18.0% to 24.5%, up 6.5 percentage points quarter-over-quarter.

Alibaba officially entered this round of food delivery competition in April. On April 30th, Ele.me launched its "Over 10 Billion Yuan Subsidy" major promotion; simultaneously, Taobao Tmall's instant retail business "Xiaoshi Da" was officially upgraded to "Taobao Flash Sale" and received core traffic support with a first-level "Flash Sale" entrance on Taobao App's homepage.

Previously, Alibaba's food delivery business primarily belonged to the Local Services Group, which included Ele.me and Amap. In the latest structural adjustment, Alibaba has integrated Ele.me with Taobao Flash Sale into instant retail business and placed it under Alibaba's China E-commerce Group along with Fliggy.

In the Q2 2025 (calendar year) financial report, Alibaba presented segment revenue by Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and all other businesses.

According to Alibaba's financial report, benefiting from order volume growth brought by "Taobao Flash Sale" launched at the end of April 2025, Alibaba's instant retail business generated 14.784 billion yuan in Q2 2025 (calendar year), compared to 13.196 billion yuan in the same period last year, representing a 12% year-over-year increase.

It should be noted that in this financial report, Alibaba did not separately disclose the operating profit of its instant retail business, only stating that the company's adjusted EBITA (a non-GAAP financial measure) decreased 14% year-over-year to 38.844 billion yuan, mainly due to investments in "Taobao Flash Sale" and user experience, user acquisition, and technology, partially offset by double-digit revenue growth from Alibaba China E-commerce Group and operational efficiency improvements across multiple businesses.

**JD.com May Be First to Exit Price War**

Facing profit contractions of tens of billions of yuan, JD.com and Meituan's attitudes toward this round of food delivery war and high subsidies have quietly shifted, as evidenced by recent statements from executives at both companies.

JD.com CEO Xu Ran previously mentioned "malicious subsidies" multiple times in an interview with China Entrepreneur, stating that the food delivery market since July has been bubbly, and malicious subsidies will ultimately lead to a lose-lose situation for all parties.

"Historically, no low-quality, low-price competition has ever brought long-term value to an industry. Although JD.com is one of the major platforms in the food delivery industry, we have not participated. We don't do things without long-term value. Our subsidy intensity is stable, we haven't participated in order-rushing behavior, and our subsidy strategy is more precise, hoping to invest money in categories where users truly have demand," Xu Ran said.

In fact, this round of food delivery war began when JD.com high-profile announced its entry into the food delivery business at the beginning of the year. To this end, JD.com adopted the core strategy of "providing five social insurances and one housing fund for full-time delivery riders" to quickly attract and expand delivery capacity.

Providing five social insurances and one housing fund for full-time riders means JD.com must bear labor costs far above the industry average for its food delivery business. However, in the view of JD.com founder Liu Qiangdong, this investment is worthwhile.

Liu Qiangdong revealed at a pre-618 exchange meeting this year that "40% of consumers who come to JD.com to buy food delivery will cross-purchase JD.com's e-commerce products; the money we lose on food delivery is more cost-effective than buying traffic on platforms like Douyin."

A person close to JD.com revealed that by using food delivery, a non-core business, to attack Meituan's core territory, JD.com can not only defend against Meituan's impact on its core digital and home appliance business through instant retail but also potentially weaken Meituan's core local commercial profit foundation.

However, based on Meituan and JD.com's Q2 2025 financial data, JD.com didn't gain much "advantage." Although Meituan's core local commercial operating margin declined significantly, JD.com's overall operating profit also shifted from a profit of 10.501 billion yuan in the same period last year to a loss of 859 million yuan.

JPMorgan stated in its latest research report that JD.com's food delivery investment loss reached 13 billion yuan in Q2, exceeding JPMorgan's expectation of 10 billion yuan. The report indicated that JD.com may be the first to exit the price war in Q3 due to financial pressure.

After all, while continuing to invest in food delivery and other new businesses, JD.com still needs to provide funding support for the development of core businesses like retail.

The financial report shows that as of June 30, 2025, JD.com's total cash and cash equivalents, restricted cash, and short-term investments amounted to 223.4 billion yuan, compared to 241.4 billion yuan as of December 31, 2024.

**Meituan "Forced" to Respond to Alibaba**

Meituan's attitude toward this round of food delivery war has also subtly changed.

Regarding JD.com's entry into the food delivery business, Meituan's Core Local Commercial CEO Wang Puzhong stated on social media in April this year: "JD.com is not the first company that wanted to do food delivery, and it may not be the last. Didn't Alibaba, Didi, and ByteDance all try? Didi is still doing it overseas now."

The implication was that Meituan never lacks challengers, but few can truly shake its moat.

A person close to Meituan revealed that "before Alibaba's entry, although Meituan continuously monitored food delivery market data, it did not consider defending against JD.com's food delivery as a strategic priority."

On July 2nd, Taobao Flash Sale announced it would directly subsidize consumers and merchants with 50 billion yuan over the next 12 months, mainly through large red envelopes, free order cards, officially subsidized fixed-price products, and simultaneously launched a series of measures including store subsidies, product subsidies, delivery subsidies, and commission fee reductions.

To respond to the diversion pressure brought by Taobao Flash Sale, Meituan quickly followed suit on the afternoon of July 5th, fully joining the food delivery subsidy war. According to Meituan data, on July 5th, Meituan's retail orders exceeded 120 million, creating a historical high, with restaurant orders exceeding 100 million.

Regarding this result, Wang Puzhong stated in a July 15th interview with LatePost that Meituan was forced to participate. "When someone comes to your territory and impacts you in an irrational way, you're forced to fight back. Participation is for survival. If we don't participate in our main business, we won't even have the opportunity to transition to AI," Wang Puzhong said.

In comparison, Taobao Flash Sale poses a far greater threat to Meituan than JD.com's food delivery.

Alibaba has Ele.me's support in delivery capacity; in ecosystem terms, it has synergy with local services and e-commerce businesses; financially, Alibaba's cash reserves are more than twice JD.com's.

According to the financial report, as of June 30, 2025, Alibaba's unrestricted cash and cash equivalents, short-term investments, and other wealth management investments included in equity securities and other investments on the consolidated balance sheet totaled 585.663 billion yuan, compared to 597.132 billion yuan as of March 31, 2025.

A set of comparative data may reveal the realistic considerations behind Wang Puzhong's statement that "participation is for survival."

According to LatePost, on August 8th, the Beginning of Autumn, Taobao Flash Sale's order volume exceeded Meituan's for the first time. More noteworthy is that through large-scale subsidies, Taobao successfully attracted significant user attention. Since July, it has further widened the gap with Pinduoduo in daily active users (DAU).

As for how long this food delivery war will last, Meituan founder Wang Xing stated at the Q2 2025 earnings call: "First, to be clear, we firmly oppose involution. With current food delivery market competition continuing to intensify, Meituan will continue to defend its market position."

A person close to Meituan revealed that "excluding subsidies, purely competing on delivery systems, merchant supply richness, user mindshare, and platform operational capabilities, Meituan has advantages."