Meituan

Founded in March 2010 and headquartered in Beijing, Meituan is China’s leading local commerce platform built around high-frequency, city-level consumption. Led by founder and CEO Wang Xing, the company’s stated mission is “We help people eat better, live better,” and it frames its strategy as “Retail + Technology.”  Meituan has been listed on the Hong Kong Stock Exchange since September 2018.

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Meituan connects consumers with restaurants, retailers, and local service merchants through a set of marketplaces that cover on-demand food delivery, instant retail, in-store services, and hotel and travel. Its monetization combines transaction-based revenue with merchant marketing services that convert user intent into orders inside the app. Financial reporting is organized into Core Local Commerce and New Initiatives, reflecting a mature profit pool in the core marketplace alongside continued investment in newer retail formats and international expansion.

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In 2024, Meituan reported RMB 337.6 billion in revenue and RMB 35.8 billion in profit for the year, with Core Local Commerce segment operating profit of RMB 52.4 billion and a narrowed New Initiatives operating loss of RMB 7.3 billion.  In 2025, the company increased spending on promotions and user incentives in response to intensified competition while accelerating overseas expansion of Keeta and reshaping parts of its community retail approach, including a strategic shift in Meituan Select.

Meituan monetizes local commerce through transaction-linked fees and merchant marketing, supported by a dense on-demand fulfillment network. Financial reporting is split into Core Local Commerce and New Initiatives. In 2024, total revenue was RMB 337.6 billion, with RMB 250.2 billion from Core Local Commerce and RMB 87.3 billion from New Initiatives.
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Core business activities

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1. On-demand delivery and instant retail
   Meituan earns delivery services revenue tied to fulfillment across categories, including food delivery and on-demand retail. In 2024, delivery services revenue was RMB 98.1 billion.
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2. Marketplace commissions and service fees
   Meituan charges merchants and partners transaction-linked fees, reported mainly as commission revenue. In 2024, commission revenue was RMB 95.3 billion.
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3. Merchant marketing and advertising
   Merchants pay for performance and display marketing across in-app surfaces, reported as online marketing services revenue. In 2024, online marketing services revenue was RMB 49.2 billion.
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4. Other services and sales
   This line includes additional services and sales across the ecosystem, and it also includes interest revenue in Meituan’s reporting. In 2024, it totaled RMB 94.9 billion.
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5. New Initiatives, including grocery retail and overseas expansion
   New Initiatives grew in 2024, driven largely by grocery retail, while segment losses narrowed versus 2023.  Internationally, Meituan has been scaling Keeta in the Gulf, including expansion into the UAE in 2025 after launching in Saudi Arabia in 2024.
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Market position
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• China leader in food delivery and a major force in instant retail: Reuters estimated Meituan holds nearly 70% of China’s food delivery market, supported by its fulfillment density and merchant coverage.
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• Competition has intensified: Alibaba’s Ele.me and JD.com have stepped up subsidies in instant retail and delivery, pressuring industry profitability and raising scrutiny around pricing practices.
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• Rider economics and compliance are strategic variables: Meituan announced plans to invest RMB 10 billion over five years to improve rider welfare, while rivals also increased spending on courier benefits during the competitive escalation.

China is Meituan’s operating center and the main driver of scale and profitability. In 2024, Meituan reported RMB 337.6 billion in revenue, with Core Local Commerce operating profit of RMB 52.4 billion and New Initiatives operating loss narrowed to RMB 7.3 billion.

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In 2025, the story shifted from steady efficiency gains to a subsidy-led competition cycle. In Q2 2025, Core Local Commerce revenue rose to RMB 65.3 billion (+7.7% YoY) while operating profit fell to RMB 3.7 billion, which management attributed to “irrational competition” and higher user incentives and promotions.

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By Q3 2025 (ended September 30, 2025), Meituan reported RMB 95.5 billion in total revenue (+2.0% YoY) and an operating loss of RMB 19.8 billion. Core Local Commerce revenue declined to RMB 67.4 billion (-2.8% YoY) and swung to an operating loss of RMB 14.1 billion. Selling and marketing expenses rose sharply as platforms competed for users and merchants.

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Competitive pressure in China now comes from Alibaba’s Ele.me push inside a broader commerce strategy and from JD.com’s instant retail buildout, with regulators urging more rational competition. Labor compliance and courier welfare also stay in focus. Meituan has expanded rider benefits, including nationwide rollout of a pension insurance subsidy program and other welfare measures.

Meituan’s next growth phase is shaped by two forces that pull in opposite directions: expanding high-frequency retail use cases, and a subsidy-led price war that compresses near-term profits. In 2024, the company delivered strong cash generation and segment profitability, with Core Local Commerce operating profit of RMB 52.4 billion and New Initiatives operating loss narrowed to RMB 7.3 billion, supported by operating cash inflow of RMB 57.1 billion.

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Key growth drivers include:

1. Instant retail penetration beyond meals
   Grocery retail remains a strategic priority inside New Initiatives, with management focusing on operating efficiency improvements. In Q3 2025, Meituan attributed quarter-on-quarter improvement in New Initiatives margin partly to better efficiency in grocery retail businesses.
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2. Merchant marketing and ROI tooling inside Core Local Commerce
   Meituan’s model pairs transaction-linked fees with in-app marketing services. Merchant marketing budgets tend to follow measurable conversion and retention, which makes targeting and attribution capabilities a durable lever as competition intensifies.
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3. Fulfillment and product investment, including AI
   Meituan increased corporate-level investment in AI and related initiatives in 2025. That spending raises near-term costs, but it targets routing, matching, and operational automation that support unit economics at scale.
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4. Selective overseas expansion through Keeta
   Keeta expanded in the Gulf in 2025, including launches in Qatar and Dubai within weeks, extending Meituan beyond China with a delivery-first playbook.
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Challenges ahead include:
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• Subsidy-led competition and margin volatility
  In Q3 2025, Meituan reported an operating loss of RMB 19.8 billion, with Core Local Commerce swinging to an operating loss of RMB 14.1 billion, driven by weaker gross margin and higher user incentives plus promotion and advertising expense.
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  The broader “instant retail” price war involves Meituan, JD.com, and Alibaba’s Ele.me, with heavy subsidy commitments and rising scrutiny.
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• Regulatory pressure on competition and platform conduct
  China’s market regulator has publicly urged Meituan, Ele.me, and JD.com to promote “rational” competition and comply with e-commerce and anti-unfair competition rules.
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• Rider welfare and compliance costs
  Meituan announced plans to invest RMB 10 billion over five years to improve rider welfare, which becomes a structural cost line during a price war.