Meituan reported a sharp jump in first-quarter earnings, underscoring the resilience of its local services platform even as China’s food delivery industry enters a period of intense subsidy-driven competition and mounting regulatory oversight.
Revenue for the quarter rose 18.1% year-on-year (YoY) to RMB 86.6 billion (USD 12.1 billion), while adjusted net profit more than doubled to RMB 10.9 billion (USD 1.5 billion). The company’s core local commerce segment, anchored by food delivery, generated RMB 64.3 billion (USD 9 billion) in revenue, with an operating margin of 21%, up from 18.6% a year earlier.
CEO Wang Xing attributed the gains to a combination of operational efficiencies, deeper ecosystem integration, and Meituan’s delivery network, which he described as “sophisticated” after more than a decade of refinement. “We are better positioned to win again this time,” he said during the company’s earnings call. “We are prepared to do whatever it takes to win the fight and solidify our market leadership.”
His comments come as JD.com and Alibaba’s Ele.me each announced RMB 10 billion (USD 1.4 billion) in food delivery subsidies for 2025, triggering what industry observers describe as a new round of irrational discounting. Wang addressed the subsidy surge head-on, stating, “RMB 10 billion here, RMB 10 billion there. It seems every internet player wants to chip in. We are prepared to do whatever it takes to win the fight.” He characterized the trend as unsustainable, warning that “neither platforms nor merchants should go back to the previous competition model driven by very aggressive subsidies.”
To counterbalance short-term volatility, Meituan is emphasizing structural investment and strategic diversification. It plans to inject RMB 100 billion (USD 14 billion) over three years into upgrading supply-side capabilities and supporting merchants. That includes artificial intelligence-powered operational tools, subsidies for kitchen safety programs, and continued expansion of branded satellite stores—a format that the company says allows chain restaurants to grow with lower overhead.
By the end of Q1 2025, Wang said more than 480 brands had launched over 3,000 satellite stores on Meituan, with some reportedly generating revenues several times higher than traditional outlets. These formats are supported by Meituan’s delivery network, which the company says processes over 20 million orders per day across its service categories.
Instashopping, the company’s rebranded on-demand retail business, continued its strong trajectory. Originally launched in 2018 and officially renamed in April, the unit has expanded beyond groceries to include categories such as beauty, appliances, and pet care. Valentine’s Day orders nearly doubled YoY, and non-food categories grew by more than 60%. According to CFO Shaohui Chen, even high-ticket items like refrigerators and washing machines are now being sold through the platform.
To boost user loyalty across verticals, Meituan launched a unified membership program in March. Known as the Shen Quan system, which roughly translates to “God voucher,” it consolidates previously separate benefits across dining, travel, entertainment, and lifestyle services. With over 770 million annual transacting users on the platform, the initiative is aimed at increasing transaction frequency and encouraging cross-category engagement. The company claims the program has already driven daily active users (DAUs) above 6.5 million on certain days.
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These developments come as Beijing steps up its oversight of platform operations. In May, the State Administration for Market Regulation—China’s primary antitrust watchdog—issued draft guidelines calling for platforms to set reasonable fees for merchants, a move intended to ease cost pressures on small businesses and curb anti-competitive practices. Separately, regulators have met with leading food delivery companies to discourage excessive subsidies and improve conditions for gig workers.
Meituan’s latest earnings call reflected a keen awareness of these pressures. Wang noted that intensified platform competition had led to diminished consumer experiences on rival services, including delivery delays and high refund rates, while framing Meituan as the more reliable option. “Only the platform that can effectively activate the three-pillar flywheel of consumers, merchants, and delivery network will achieve sustainable growth,” he said.
Part of that flywheel includes Meituan’s couriers, who have received over RMB 1.5 billion (USD 210 million) in occupational injury insurance since mid-2022. In April, the company launched a pilot pension program in Nantong and Quanzhou, offering 50% subsidies for eligible workers. Meituan says that 86% of management roles within its delivery network are now filled by frontline couriers who have been promoted internally. Many have also received educational sponsorships and healthcare benefits through company aid programs.
Despite the confident tone, Wang acknowledged that volatility lies ahead. Meituan expects slower revenue growth and a “significant” decline in core local commerce profit in the coming quarter, as it ramps up investment to defend market share. Still, he reiterated the belief that “eventually competition should realign with the business fundamentals,” signaling Meituan’s commitment to long-term sustainability over short-term margin protection.
Part of that long-term vision includes international expansion. Meituan continues to scale its Keeta brand in Hong Kong and Saudi Arabia and is preparing for launch in Brazil. Reports also suggest that Keemart, the overseas version of Meituan’s Xiaoxiang Supermarket, has entered Riyadh, potentially marking its first international retail venture. While Meituan has not confirmed the move, recruitment is reportedly underway for roles in procurement, operations, and business development.
“It will have some impact on our short-term profitability,” Wang said, citing the capital required to tap into markets like Brazil. “But I think in the longer term, the global expansion represents a very good and very promising growth opportunity for us.”
For now, Meituan’s strategy is to weather the storm: defend its dominant position, broaden its platform’s scope, and stay ahead of regulatory demands. The company ended the quarter with RMB 180.4 billion (USD 25.3 billion) in cash and equivalents, giving it ample firepower to counter rivals and sustain its expansion. “The winner is going to be really valuable,” Wang said. “And we plan to be the winner.”