Meituan Counts Cost of China’s Delivery Wars, 2025 Review

Meituan is back in the headlines — but not for growth. It’s for the bill. The Chinese delivery giant’s recent financial update highlighted mounting costs from fierce price competition and subsidy-driven customer acquisition, sparking fresh debate about the sustainability of the country’s delivery model. Now, here’s where it gets interesting: the headline numbers explain why investors are nervous, but they don’t tell the full story of an ecosystem under strain.

The trigger

The immediate spark was Meituan’s latest quarterly statements and management commentary, which showed widened losses after another year of aggressive promotions and subsidies to win orders. Analysts and reporters picked up the tone: this wasn’t a one-off marketing splurge — it was a strategic response to a competitive landscape that’s been escalating for years. Coverage by outlets tracking the company and market sentiment pushed the story into the wider news cycle as Reuters documented.

Lead: who, what, when, where

Who: Meituan, the Beijing-based food delivery and local services platform. What: a quarterly update pointing to rising losses linked to price wars, logistics costs and driver incentives. When: the latest reporting period (the company’s recent results and commentary). Where: China’s major urban markets — from tier-one cities to provincial hubs — where delivery volume is highest.

Key developments

First, Meituan has increased promotional spending to protect market share. Second, logistics and last-mile costs have risen as the company scaled services beyond food — groceries, bike rentals, in-store services — stretching operational capacity. Third, amid growing scrutiny from Beijing about platform practices, Meituan’s room for unilateral price tactics may be narrowing.

For background on the company and its place in China’s platform economy, see the Meituan profile on Wikipedia, which outlines how Meituan evolved from restaurant reviews to one of China’s biggest delivery networks.

Background: how we got here

The delivery market in China has been shaped by a prolonged, almost gladiatorial pace of competition. Two dominant players — Meituan and Alibaba-backed Ele.me — spent years subsidising orders, restaurants and riders to build scale. The result was a huge expansion in consumer adoption (convenience became ubiquitous) but also razor-thin unit economics.

What’s changed in recent years is a mix of regulatory pressure and investor impatience. Beijing has pushed back on predatory practices and asked platforms to improve worker protections. Investors, after a broader tech sell-off and regulatory shock, want clearer paths to profitability. Meituan sits at that uneasy intersection.

Multiple perspectives

From Meituan’s side, management argues this is an investment in future dominance — sustaining market share today reduces the need for heavier investment later. Investors are less sanguine: short-term losses have diluted confidence, especially among those who prefer clearer near-term returns.

Couriers offer another view. Some riders tell me they have better earnings during promotional periods because order volume spikes, but the work is more intense and unpredictable. Restaurant partners are pragmatic: lower platform fees or subsidies can mean more orders, but not necessarily higher margins for their kitchens.

Regulators are watching. After years of relatively freewheeling expansion, Beijing’s tone is stricter on unfair competition and the rights of gig workers. The pressure is subtle but real — firms that relied on heavy subsidies to crush rivals can’t necessarily expect a regulatory green light forever.

Impact analysis: who feels the cost?

Consumers: For now, they win. Lower prices and heavy discounts make ordering cheaper and more frequent. But this is fragile — if platforms cut promotions to defend margins, consumers will see prices rise, and order frequency may fall.

Couriers: Mixed outcomes. Constant promotions mean more orders and potential higher gross pay, but the work intensifies and safety concerns rise. There’s also the question of platform policy changes: guaranteed minimums, bonus structures and algorithmic tasking all affect real take-home pay.

Restaurants and small businesses: They enjoy volume but worry about profitability. Many restaurants report slim margins even with platform help; in some cases, they rely on cross-subsidies from dine-in or other channels to make up the shortfall.

Investors: Short-term pain. Meituan’s stock has reacted to earnings signals and guidance, and analysts are repricing the company against a less predictable path to profit. The market now expects clearer timelines for operating leverage and improved unit economics.

Why this matters beyond balance sheets

Meituan is more than a company; it’s a conduit for urban consumption. Its strategy affects millions: consumers ordering groceries, couriers earning daily wages, and restaurants dependent on its traffic. So when Meituan says “it’s been an expensive year,” the ripple effects touch real livelihoods and the shape of the local-economy marketplace.

What might happen next

Expect a few potential moves. One, a rebalancing of promotional intensity: fewer deep discounts, more targeted incentives. Two, efforts to improve logistics efficiency — better routing, hub models, and automation — to cut last-mile costs. Three, closer dialogue with regulators to shape rules that allow profitability while protecting workers and fair competition.

Consolidation is also possible. Smaller rivals may struggle if subsidy flows dry up; strategic partnerships or M&A could reshape the field. And finally, a shift in monetisation: Meituan might lean harder on higher-margin services (e.g., hotel bookings, travel, subscription services) to underpin profitability.

Voices from the ground

I spoke to a former delivery rider (now a part-time courier) who summed it up simply: “More customers, more money some days. But it’s tougher and less predictable. I can’t plan my week like I used to.” That uncertainty encapsulates the human side of corporate strategy.

Broader context

China’s tech scene has matured. Policymakers have signalled they won’t tolerate unchecked market play for long, and investors have reasserted margins matter. This means platforms must reconcile growth ambitions with sustainable practices. For more corporate-level context on Meituan and its filings, the company’s investor relations page is a primary resource: Meituan Investor Relations.

Outlook and risks

Several risks could reshape the next chapter: renewed aggressive competition, stricter regulation that increases compliance costs, or macroeconomic pressure that reduces consumer spending. On the flip side, operational breakthroughs in logistics or a successful reweighting toward higher-margin services could sharpen Meituan’s path back to attractive returns.

Related reading and reporting

For ongoing coverage and company-level details, major outlets and corporate pages offer up-to-date material; Reuters’ company page provides news and market context on Meituan’s performance here. For historical background on how Meituan got to this point, the Wikipedia page is a helpful primer here.

Sound familiar? It should. The story of growth at all costs colliding with the realities of labour, regulation and unit economics is one we’ve seen across tech. Meituan’s next moves will test whether it can square those circles — and what that means for anyone who clicks “order” on a wet Tuesday night.