Meituan’s quarterly losses shrank after repeated warnings from Beijing helped cool the red-hot competition that hammered margins in China’s online commerce arena.
Meituan stock jumped about 5% on the news.
The company reported an operating loss of 6.5 billion yuan (US$961 million or RM3.81 billion) for the three months ended March, better than the average analyst projection for about nine billion yuan. Revenue grew 5.6% to 91 billion yuan, about in line with projections.
While the results were better than feared, Meituan remains locked in a costly battle with Alibaba Group Holding Ltd and JD.com Inc to defend its market share in food delivery. The trio have spent billions on subsidies and marketing in the past year, a big reason Meituan reported its first net loss in almost three years for the quarter ended September. On Monday, billionaire founder Wang Xing warned that order growth may decelerate in the second half in part because of a high base for comparison from 2025, when companies unleashed subsidies to try and gain market share. But the industry was getting more reasonable, Wang added.
“With industry-wide subsidies finally getting more rational, we are seeing competition shifting back to the fundamentals,” Wang told analysts on a post-results call. “We see that as we gradually pull back subsidies, we can still continue to see healthy user growth and stronger engagement for our core users.”
Founder and CEO Wang Xing said in March that losses per order have started narrowing, after Chinese authorities acted to rein in an intense competition that’s squeezed profits for platforms, merchants as well as drivers. The antitrust watchdog in January opened a probe into competition practices in the food delivery sector, and started a new round of investigations into e-commerce recently.
China’s market regulator also fined Meituan and rivals including Alibaba and JD a total of 3.6 billion yuan for failing to filter out unqualified merchants. The penalty came after a series of probes into “ghost deliveries”, in which merchants registered with online marketplaces with fake locations and falsified documents.
Facing fierce competition and scrutiny domestically, Meituan has been expanding overseas. Its first international operation, branded Keeta, turned a profit in Hong Kong last year. The Chinese company also operates in Brazil, United Arab Emirates, Kuwait, and Qatar.
Wang has said overall losses from new initiatives will narrow this year compared to 2025, and the company will focus on current markets in overseas expansion.