In February 2025, JD.com entered the food delivery market as a new player with an aggressive strategy of "zero commission + billion-yuan subsidies + rider social insurance coverage," targeting pain points in food quality, rider treatment, and merchant commission fees. The company focused on high-value orders and specialized categories such as fresh produce and pharmaceuticals, disrupting the long-standing duopoly between Meituan and Ele.me.
In response, Meituan founder and CEO Wang Xing stated, "We will spare no effort to win this competition," clearly demonstrating Meituan's determination to maintain its position in the food delivery war. From the recently released second-quarter earnings report, it's evident that Meituan has indeed invested heavily to stabilize its market position and counter JD.com's challenge. The most direct impact was a dramatic drop in the company's second-quarter profits, with the core local commerce business expected to incur significant losses in the third quarter.
On August 27, MEITUAN-W released its Q2 2025 financial results, reporting total revenue of 91.8 billion yuan, up 11.7% year-over-year. However, adjusted net profit was only 1.493 billion yuan, plummeting 89% compared to the same period last year. The core local commerce segment, which includes food delivery services, saw operating profit decline significantly by 75.6% year-over-year to 3.7 billion yuan, with operating margin falling 19.4 percentage points to 5.7%.
To counter challenges from JD.com's food delivery service and Taobao's instant retail offerings, Meituan had to substantially increase its capital investment, which is the fundamental reason behind the profit collapse. So how much did Meituan's costs and expenses actually increase for this food delivery war?
Looking at cost of sales, Q2 2025 cost growth far exceeded revenue growth, with rider subsidies becoming a major burden. In Q2 2025, Meituan's cost of sales reached 61.426 billion yuan, compared to 48.361 billion yuan in the same period last year, representing a 27% year-over-year increase. The cost growth rate significantly outpaced the 11.7% revenue growth rate, with the cost of sales ratio rising from 58.8% to 66.9%, corresponding to a substantial decline in gross margin.
Regarding the increase in cost of sales, Meituan explained that it was primarily due to increased instant delivery order volume, higher rider subsidies, expansion of food and grocery retail, and overseas business investments. The rising proportion of cost of sales to revenue was mainly attributed to the need for higher rider subsidies to ensure service stability, combined with increased overseas costs, though this was partially offset by improved operational efficiency in food and grocery retail.
From an operating expenses perspective, the irrational competition in the food delivery war led to a dramatic increase in marketing expenses that far exceeded revenue growth. In Q2 2025, Meituan's sales and marketing expenses surged 51.8% to 22.519 billion yuan. This means Meituan spent an additional 7.7 billion yuan compared to the same period last year on promotions, advertising, and user incentives. According to the company's financial report, this expense increase was primarily due to higher spending on promotions, advertising, and user acquisition as business scale expanded.
The food delivery war has indeed helped Meituan consolidate its market-leading position. From a business metrics perspective, Meituan's app monthly active users exceeded 500 million in Q2 2025, while annual transaction frequency per user reached a new historical high. Additionally, during the more intense competition in July, Meituan's instant retail daily order volume peaked at over 150 million orders, setting a new record.