Key Takeaways from Meituan's 2026 First Quarter Financial Report: From Expenditure-Driven Growth to Sustainable Profitability
The core message of Meituan’s financial report for the first quarter of 2026 is a shift from aggressive spending to more strategic and efficient business operations. Revenue increased steadily, reaching 91 billion yuan, a year-on-year growth of 5.6%, while losses were significantly reduced (4.97 billion yuan after adjustments, a decrease of over ten billion yuan compared to the previous quarter). The company’s core food delivery and in-store services are no longer relying on subsidies but are focusing on improving efficiency. Among the new businesses, Xiangxiang Supermarket has emerged as a highlight, contributing more than 40% of the company’s new revenue for the first time. Meituan is also collaborating with Tencent to offer “one-stop services,” and its overseas operations have shifted from expansion to optimizing operations.
Overall, Meituan has successfully transitioned from a phase of heavy investment to gain market share to one where it is generating profits in a more sustainable manner.
1. Overall Performance: Lower Losses and Smarter Spending
In the past, Meituan invested heavily in subsidies to attract users, such as offering discounts on food deliveries and giving out red envelopes to new customers, which led to substantial losses. This quarter, however, the company saw a different approach:
- Revenue increased by 5.6% to 91 billion yuan, indicating continued business growth.
- Adjusted losses decreased from 15.1 billion yuan in the fourth quarter of last year to 4.97 billion yuan, a reduction of over 10 billion yuan.
A key factor in this improvement was a 27.6% decrease in sales and marketing expenses (from 31.7 billion yuan to 22.9 billion yuan), mainly due to reduced subsidies for users and advertising spending. Meanwhile, the wages and benefits for delivery riders remained high, indicating that Meituan is shifting its focus from distributing cash to users to ensuring the quality of service.
2. Core Local Businesses: Focusing on Quality Instead of Low Prices
Food delivery, in-store services, and travel-related businesses form the foundation of Meituan’s business, and they performed well this quarter:
- Revenue from these areas reached 64.1 billion yuan, with operating losses decreasing by 80% to 2 billion yuan.
Wang Xing stated that “subsidies for food delivery will no longer be a competitive factor; instead, the key will be who offers better services.” Although subsidies have been reduced, user loyalty has not declined; frequent users are purchasing more frequently. Meituan expects to see an improvement in profitability per order (UE) in the second quarter compared to the first quarter, although the number of orders may decrease in the second half of the year as customers prefer higher-quality products. However, the total transaction value (GMV) is expected to remain stable as consumers are willing to pay for quality.
3. New Business: Xiangxiang Supermarket Takes Center Stage
A significant change in this financial report is the separate presentation of “commodity sales,” with Xiangxiang Supermarket becoming a major highlight:
- New business revenue totaled 27 billion yuan, a year-on-year increase of 21.3%, of which commodity sales accounted for 17.99 billion yuan (a year-on-year increase of 40.7%).
Xiangxiang Supermarket has already reached 55 cities and plans to open more stores. Wang Xing believes that physical stores help build brand recognition better than purely online platforms, but retail is a long-term endeavor, and the focus is on whether investments will pay off in the long run.
Meituan’s overseas business, Keeta (for example, in Saudi Arabia), is no longer aggressively expanding new markets; this year, the focus is on optimizing operations, such as reducing costs and improving efficiency, rather than rapid expansion.
4. AI Strategy: Leveraging Tencent’s Technology to Enhance Advantages
Meituan invested 7 billion yuan in research and development this quarter (a year-on-year increase of 22%), with a focus on AI:
- The company is collaborating with Tencent’s “Yuanbao” AI assistant, allowing users to place orders directly through Yuanbao without needing to open the Meituan app.
Wang Xing emphasizes that Meituan’s strengths lie in real-time data and its delivery network. AI plays a crucial role in leveraging these advantages to provide users with a more convenient experience.
Conclusion: Meituan’s New Direction
Previously, Meituan relied on subsidies to compete in the market; now, it is focusing on improving efficiency and providing better services while investing in new areas such as retail (Xiangxiang Supermarket) and AI. The future success of the company will depend on whether Xiangxiang can continue to grow, whether AI can attract more users, and whether its overseas operations can become profitable. Overall, this shift from expenditure-driven growth to sustainable profitability is good news for both investors and customers. Users no longer need to rely on subsidies but can expect more stable services, while Meituan will gradually start generating profits.