Summary of Key Points
Meituan's financial report for the second quarter of 2026 is impressive: revenue increased by 14.4% to 104.6 billion yuan, and profit reached 2.155 billion yuan (25.2 billion yuan after adjustments), compared to a loss of 6.8 billion yuan in the first quarter. This is mainly due to the cooling down of the intense competition in the food delivery sector that has lasted for over a year—subsidies have decreased, and regulatory intervention has helped Meituan maintain its core business. However, Alibaba and JD.com are still making efforts in the instant retail sector, with the competition shifting from a focus on spending money on subsidies to a focus on building sustainable capabilities. Has Wang Xing truly won? In the short term, profits have recovered, but in the long run, it will depend on whether Meituan's core strengths, such as the density of urban transactions and delivery efficiency, have been enhanced.
Detailed Analysis
1. From a Loss of 6.8 Billion Yuan to a Profit of 2.1 Billion Yuan: Subsidies Played a Key Role, but Not the Only Factor
Meituan's loss in the first quarter was largely due to the subsidy war with JD.com and Alibaba, which involved offering free deliveries, low-price coupons, and competing for merchants and delivery riders. The profit improvement in the second quarter is directly attributed to the reduction in subsidy efforts: on one hand, regulatory authorities intervened (meetings in 2025 and explicit restrictions on large-scale subsidies in 2026); on the other hand, both companies realized that continuing to subsidize was no longer effective. More importantly, Meituan's foundation remains strong—its core local business revenue increased by 10.1% to 71.5 billion yuan, and its operating profit turned positive. This indicates that even without subsidies, users continue to use Meituan, merchants are willing to cooperate, and its delivery network remains efficient.
However, the battle is not over: Alibaba's instant retail revenue increased by 45%, and JD.com's food delivery business is still working to reduce losses. The focus has shifted from who can spend the most on subsidies to who can retain users, lower delivery costs, and make merchants more profitable.
2. Orders Can Be Bought, but True Competitiveness Cannot Be Imitated
Many believe that spending money can win orders, but this is a misconception. For example, if you use a 5-yuan coupon to attract 100 users, 80 of them may leave once the coupon is no longer available—these orders are not genuine conversions. The real advantages lie in user habits (users prefer to use Meituan even without coupons), delivery efficiency (riders can deliver within 15 minutes), and the quality of merchants (the stores users want to visit are already on the platform).
For instance, Meituan's riders can deliver 30 orders a day, while new platforms may only deliver 20 orders, due to the higher order density in Meituan's network, allowing riders to complete more deliveries on their way without extra travel. This efficiency cannot be quickly replicated by simply spending more money.
3. Meituan's Most Difficult Advantage to Imitate: Urban Transaction Density
This is Meituan's key competitive advantage. Urban transaction density refers to the number of orders, merchants, and riders in a city, which creates a positive cycle:
- More merchants → More user options → More Meituan usage;
- More users → More orders → Riders can complete more deliveries on their way, reducing costs;
- Lower costs → Merchants are more willing to stay on the platform.
For example, in Chaoyang District, Beijing, Meituan has thousands of merchants and tens of thousands of orders per day, allowing riders to easily complete deliveries. New platforms would need to attract enough merchants and users and build a similar network, which takes time and effort in each city. Capital can buy traffic, but it cannot create this type of long-term density.
4. Alibaba and JD.com Are Competing for the Future of Retail
The reason Alibaba and JD.com are competing with Meituan is not just for the food delivery business; they are eyeing the potential of instant retail. In the past, e-commerce meant waiting for 2 days to receive goods, but now deliveries are available within 30 minutes. This change will reshape the retail market:
- JD.com: With its nationwide logistics network, it can extend its services to the “last mile” delivery, such as delivering a bottle of cola from a nearby warehouse, which is faster than Meituan.
- Alibaba: With its vast user base, it aims to shift users from infrequent purchases (clothing, appliances) to more frequent local purchases (groceries, medicine) through flash sales, increasing user loyalty.
They don't need to completely defeat Meituan; they just need to gain a share of the instant retail market to capture future traffic and profits. For Meituan, this is about defending its local business network, as losing this network could be detrimental in the long run.
5. Has Wang Xing Really Won? It Depends on Meituan's Post-War Performance
Short-term profits do not indicate victory. The true test of victory is whether Meituan becomes stronger after the competition:
- Do users become more dependent on Meituan (using it daily even without subsidies)?
- Is delivery efficiency improved (riders can deliver faster and at lower costs)?
- Is the merchant network more stable (merchants are less likely to leave the platform)?
If these goals are achieved, then Meituan has truly won. Otherwise, even if it is profitable now, it may be caught up by Alibaba and JD.com in the future. The outcome of a business war is not determined by the intensity of the competition but by the company's long-term capabilities after the dust settles.
In Conclusion
Meituan's profit in the second quarter is a temporary respite, but the real battle has just begun. The competition is about building sustainable capabilities, not relying on short-term subsidies. For Wang Xing to win, Meituan needs to strengthen its urban transaction network and improve efficiency, rather than focusing solely on immediate profits.