J.P. Morgan believes China's food delivery market is approaching a critical turning point.

According to market insights, J.P. Morgan summarized key takeaways from an expert call in its latest report. The bank noted that overall order volume in the food delivery industry has declined, dropping from a September peak of 151 million daily orders to 145 million in October, with further contraction to 141 million expected in November—primarily due to reduced subsidies and seasonal factors.

J.P. Morgan projects that MEITUAN could achieve breakeven by mid-2026, with per-order profits of RMB 0.4–0.5 in the second half of the year. In contrast, Alibaba may only approach breakeven by late 2026, indicating that MEITUAN's profitability recovery is ahead of expectations, while Alibaba’s food delivery business will remain under pressure in the near term.

Experts anticipate that subsidy-driven competition will gradually ease in Q1 2026, marking a shift from cash-burning rivalry to more rational operations.

**Market Cools as MEITUAN's Share Dips to 50%**

The report highlights slowing growth in China’s food delivery market. With platforms cutting subsidies and seasonal headwinds, national daily orders have fallen from 151 million in September to a projected 141 million in November.

In terms of market share, MEITUAN remains the leader at 50% (approximately 71 million daily orders), though its dominance shows signs of "cooling." Alibaba follows with 42% (59 million orders), while JD.com ranks third with 8% (11 million orders).

**Profitability Race: MEITUAN Leads, Alibaba Lags**

Significant gaps persist in profitability. Experts estimate MEITUAN's per-order loss narrowed from RMB 1.8 in September to RMB 1.4 in October, with further improvement to RMB 1.2 expected in November. By comparison, Alibaba’s per-order loss is projected at RMB 3.0, and JD.com’s at RMB 4.8.

The report attributes MEITUAN's smaller losses to higher order density and operational efficiency. Experts forecast:

- MEITUAN to reach breakeven by mid-2026, generating RMB 0.4–0.5 profit per order in H2. - Alibaba likely to remain loss-making through 2026, nearing breakeven only by year-end.

Key to profitability lies in "smarter" subsidy strategies—prioritizing high-value orders while optimizing fulfillment costs through scale.

**Diverging Strategies: MEITUAN Focuses on Members, Alibaba on Conversion, JD.com on Niche**

The three platforms are pursuing distinct approaches: - MEITUAN is doubling down on premium, high-frequency members, offering targeted coupons to boost loyalty—aligning with its profit-quality goals. - Alibaba continues heavy investment in food delivery/instant commerce. A turnaround hinges on two conditions: breakeven in food delivery and an increase in traffic-to-ecommerce conversion rates from 2% to 4–5%. Once achieved, subsidies may shift from food delivery to instant commerce. - JD.com is leveraging its strength in 3C electronics and母婴 (baby/maternity) categories to serve its Plus members, adopting a more focused playbook.

**Subsidy War Pauses? Rational Competition Ahead**

Looking ahead to 2026, the once-fierce subsidy battle is expected to moderate. Experts cite three drivers: 1. Irrational pricing risks regulatory scrutiny. 2. Seasonal declines in beverage orders reduce the need for aggressive subsidies. 3. Unsustainable costs as order volumes grow.

This signals a potential industry shift from price wars to sustainable competition based on operational efficiency and service quality.