Key Points Summary from Meituan's 2026 First Quarter Financial Report
Meituan’s financial report for the first quarter of 2026 shows a slight increase in revenue (91 billion RMB, +5.6% year-over-year), but a significant reduction in losses (operating loss decreased from 16.1 billion RMB to 6.47 billion RMB, and net loss decreased from 15.14 billion RMB to 6.83 billion RMB). The reasons for this improvement include the cessation of the subsidy war in the delivery industry, which has reduced the financial strain on businesses; the stable performance of its core local services (delivery and flash shopping); increased investment in research and development (AI, drones); and rising sales costs due to improved benefits for riders and business expansion. Additionally, new industry regulations are set to be implemented, which will make the delivery sector more regulated.
1. Reduced Losses: Subsidies No Longer Drive Excessive Spending
Previously, delivery platforms competed by offering substantial subsidies to attract users, resulting in significant losses for Meituan. With the end of these subsidies, the operating losses from its instant delivery business have been greatly reduced—specifically, the loss from this segment has dropped by half compared to the fourth quarter of last year. In other words, there is no longer a need to spend heavily just to attract customers, leading to lower overall losses.
2. Business Segments: Stable Core Services and Growing New Businesses
- Core Local Services: Revenue remained relatively unchanged (64.1 billion RMB, +0.1%), but the younger user base (post-2000s) for flash shopping has become a major driver of growth, with increased purchasing frequency.
- New Businesses: Revenue increased by 21.3% (27 billion RMB). Although Meituan discontinued “Meituan Youxuan” (a community-based shopping service), its own online supermarket, “Xiaoxiang Supermarket,” has expanded to 55 cities, and its proprietary brands (such as Meituan-branded milk and snacks) are selling well. The overseas business, Keeta, has seen improved efficiency in Hong Kong and Saudi Arabia, with further expansion in other Middle Eastern regions and Brazil.
3. Research and Development Investment: AI and Drones as the Future Focus
Meituan invested 7 billion RMB in research and development this quarter, a 22% increase year-over-year, accounting for 7.7% of its revenue. The focus is on AI technologies such as AI Agents (which help businesses process orders automatically and recommend products to customers) and large models (similar to ChatGPT) that can better understand user needs). Drones have also been used to deliver orders, with a total of 900,000 deliveries completed, indicating that these technologies are now being applied in actual business operations. In the future, drones could potentially be used for delivery, making the process faster and more cost-effective.
4. Rising Costs: Money Spent Wisely
Sales costs increased from 54.1 billion RMB last year to 65.1 billion RMB (20.2% year-over-year), with the proportion of revenue they account for rising from 62.8% to 71.5%. The increase is due to higher subsidies and benefits for riders (such as better wages and insurance) and the expansion of its grocery retail business and overseas operations. These investments are aimed at long-term profitability rather than wasteful spending.
5. New Industry Regulations: Safer Delivery, More Regulated Platforms
Starting June 1st, the “Online Food Service Food Safety Regulations” came into effect. These regulations require businesses to hire a “Food Safety Director” and a “Food Safety Officer,” and accountability in case of issues is clearly defined. Technology is also being used to standardize processes (e.g., installing cameras to monitor food preparation). For Meituan, while this requires additional effort to oversee compliance, it will lead to a more organized industry in the long run. Smaller businesses may be at a disadvantage due to higher compliance costs, giving larger platforms like Meituan an advantage and providing consumers with greater peace of mind.
Overall, Meituan’s performance in the first quarter indicates a stabilization of its financial situation: less reliance on subsidies, healthier business operations, and investment in future-oriented technologies and new businesses. With the support of new industry regulations, the company is poised for more stable growth in the coming period.