One Year of the Food Delivery War: $210 Billion Burned – What Has Changed?
On June 1st, Meituan released its Q1 financial report for 2026. So far, from Q2 in 2025 to this quarter, the food delivery war that lasted for a whole year finally has a complete bill. According to estimates, Meituan, Alibaba, and JD.com burned at least 150 billion yuan on food delivery, pushing the original daily food delivery business of 80 - 90 million orders to over 200 million orders at its peak.
This battle has changed many things. More than a year ago, Ele.me still had its own name. When people mentioned "Flash Purchase", most of them thought of Meituan Flash Purchase. No one ordered food on JD.com, and the Hang Seng Tech Index in the Hong Kong stock market hadn't been ridiculed by the market as the "Hang Seng Food Delivery Index" yet.
One year later, Ele.me was incorporated into Alibaba's China E - commerce Business Group. JD Food Delivery reached an average of about 10 million orders per day. Meituan maintained its first - place market share with three consecutive quarters of losses.
The war is ebbing. The market share pattern of the three companies has been stable for two quarters. The overall order volume has declined from the peak. In the latest quarterly financial reports, the stances of the three companies have changed significantly.
Meituan's adjusted net profit has narrowed significantly compared with the previous two quarters. The financial report and earnings call mentioned retail more often. Alibaba's net profit is almost zero, hitting a new low in the past two years. However, more money is no longer burned on food delivery but spent on AI. JD's net profit has basically returned to the level when the food delivery war started.
A Meituan insider told "Focus One" that in Q1 of 2026, Meituan's average daily food delivery orders were about 65 million. Taobao Flash Purchase and JD Food Delivery had about 50 million and 9 million orders respectively. The order ratio of the three companies was basically the same as that in Q4 of last year, and the overall order volume has decreased.
"Meituan's current goal is to reduce subsidies while ensuring its leading share. It can accept that the average daily order volume of its competitors does not exceed 80% of its own," the insider said.
The strategies of the three companies are shifting, and regulatory measures are tightening.
At the end of March this year, the State Administration for Market Regulation reposted an article "The Food Delivery War Should End" from Economic Daily, which was regarded by the market as a clear signal from the regulatory authorities to stop the vicious competition among platforms and guide the industry towards healthy development.
With multiple factors overlapping, the most intense period of the food delivery war has passed, but this does not mean that the competition among the giants will weaken.
01. There is No Winner on the Balance Sheet, but Each Has Its Own Way of "Winning"
Judging from the bill of the past year, there is no absolute winner among the three main participants in this food delivery war.
Let's first look at Meituan's financial report.
Q1 continued the tone of the previous quarter. The revenue scale improved slightly. The Core Local Commerce (CLC) achieved a revenue of 64.1 billion yuan during the period, a slight year - on - year increase of 0.2%. The growth rate turned positive for the first time in two quarters. The company's overall operating loss also decreased from more than 10 billion yuan in the previous two consecutive quarters to 6.5 billion yuan. Both slightly exceeded market expectations.
Revenue scale and operating profit are the two indicators most closely related to the food delivery war in the financial report. In Meituan's financial report, not all subsidies to users are counted as expenses. Instead, a part of them is included as a deduction from revenue. This means that the revenue growth rate can more intuitively reflect the intensity of food delivery subsidies than the profit growth rate.
In Q3 and Q4 of 2025, Meituan's CLC revenue declined year - on - year. In Q3, when the food delivery war was the most intense, the year - on - year decline was nearly 3%. Returning to the same level in Q1 this year is a signal of the decline of subsidies.
The better - than - expected reduction in losses is partly because the revenue was slightly better than expected. According to the Bloomberg consensus forecast, the expected CLC revenue in Q1 this year was the same as that of last year. The actual result was about 75 million yuan more than expected.
Another reason is that the selling expenses have narrowed significantly. Meituan's selling expenses in Q1 this year were about 23 billion yuan, which was significantly lower than the more than 30 billion yuan in the previous two quarters.
Meituan revealed in the earnings call after the release of the financial report that the Unit Economics (UE) of pure food delivery (excluding non - food flash purchases) turned positive in April and May this year.
A securities analyst who has long followed Meituan told "Focus One" that in Q3 last year, the lowest point of Meituan's food delivery UE was about - 2 yuan. By the end of Q1 this year, it had shrunk to about - 1 yuan. If the management's statement that it will achieve break - even in Q2 is true, then the loss - reduction rate in the whole Q2 is significantly accelerating.
In addition, the analyst also said that the UE of Meituan's main competitors was once 4 yuan lower than Meituan's last year. That is, Meituan lost 2 yuan per order, while its competitors lost 6 yuan per order. This gap has narrowed to less than 3 yuan in Q1 this year, and the subsidy intensity of each company has decreased significantly.
The financial reports released by Alibaba and JD.com in the previous few weeks also confirmed this trend.
In Alibaba's Q1 financial report, if the amortization and impairment of intangible assets and the investment in Qianwen APP are excluded, the adjusted net profit level declined slightly compared with the same period last year. JD.com's adjusted net profit attributable to the parent company in Q1 this year has basically returned to the level of Q2 in 2025.
Behind the burned tens of billions of profits, the victory or defeat on the balance sheet is only half of this war.
Previously, according to "Focus One", in the last three quarters of last year, Meituan, Alibaba, and JD.com invested 40 billion, 70 billion, and 35 billion yuan respectively in subsidies during the food delivery war. In total, they burned at least 145 billion yuan in one year.
Although the subsidy intensity weakened in Q1 this year, the total subsidy of the three companies will still be more than 10 billion yuan. After a year of the food delivery war, at least 150 billion yuan in profits have been burned.
However, behind the seemingly lose - lose situation, each company has got what it wants.
JD.com achieved an average of about 10 million food delivery orders per day in one year. This scale is equivalent to half of Ele.me's average daily order volume before the food delivery war started. It has basically established a foothold in the food delivery market and successfully built the user perception of ordering food on JD.com.
Alibaba's food delivery market share has grown from one - quarter to be close to Meituan's. It even surpassed Meituan to become the industry leader in some months. More importantly, the instant retail business represented by food delivery has driven the growth of the e - commerce business.
At Alibaba's Q1 earnings call, Jiang Fan said that the synergy between instant retail and traditional e - commerce business is specifically reflected in promoting customer acquisition, improving user activity, meeting diversified consumption needs, increasing transaction volume, improving monetization ability, and supporting logistics infrastructure. Alibaba's GMV and CMR in Q1 showed strong growth momentum, and instant retail played a key role.
For Meituan, although it has lost its previous absolute market leadership, it has consolidated its food delivery base at a lower cost than its competitors. In addition, Meituan still has an advantage in the high - end food delivery market segment.
02. Burning Billions in Profits in One Year Exceeded All Participants' Expectations
Looking back, when this battle started in Q2 of 2025, no company could have predicted that it would evolve into what it is today.
It was a long - standing consensus in the Internet circle before 2025 that there would be a battle between JD.com and Meituan. As JD.com's delivery timeliness became stronger and Meituan's food delivery categories became more diverse, the business boundaries of the two companies became more and more blurred, and a head - on confrontation was inevitable.
On February 11, 2025, JD.com officially announced the recruitment of food delivery merchants. One week later, JD.com also announced that it would gradually pay the five social insurances and one housing fund for its full - time food delivery riders, and all the costs would be borne by JD.com.
The market initially interpreted this move as a "trial". Even though JD.com once achieved an average daily order volume of 25 million through large - scale subsidies in the early stage, there was not much sense of crisis within Meituan.
A Meituan insider told "Focus One" that at the beginning of 2025, Meituan's focus was still on retail. The management frequently visited offline retail brands to discuss the possibility of cooperation. At an internal meeting, Meituan executives proposed that they should focus on the driving effect of JD.com's food delivery business on its e - commerce main site, rather than just staring at the order volume of competitors. In other words, if JD.com did well, Meituan could also learn from it when expanding its retail business in the future.
The situation began to change at the end of April. With the entry of Taobao Flash Purchase, Meituan's order volume and market share in some cities and regions declined significantly. In order to maintain its leading position, Meituan had to follow up with subsidies.
A detail is that the members of Meituan's S - team, who had not participated in Meituan's monthly financial meetings for many years, began to attend the meetings together to pay attention to the subsidy situation of Meituan's food delivery and flash purchase, as well as the subsequent impact on the company's profits.
Meituan initially judged that this food delivery war would be a long - term battle lasting one to two years. The company might have to spend an additional 15 - 20 billion yuan in subsidies throughout 2025. Judging from the final result, Meituan still underestimated the cruelty of this war.
By mid - June, the average daily order volume of Taobao Flash Purchase's food delivery, which had been launched for just over a month, was already close to half of Meituan's, and it was still increasing subsidies, pushing the war to another level.
In August, Taobao Flash Purchase further pushed the peak daily order volume to 120 million through the marketing campaign of "The First Cup of Milk Tea in Autumn".
At Alibaba's Q2 earnings call, Jiang Fan said that Taobao Flash Purchase's orders had "led" its competitors. "Just looking at the order share of food delivery to home, we have led the industry."
According to "Focus One", in the early stage of the food delivery war, at an investor one - on - one communication meeting organized by a seller, an Alibaba executive said that there was no upper limit for the investment in food delivery subsidies because they couldn't let competitors know their bottom line.
Meituan quickly realized that it had underestimated the determination of its opponents to invest and quickly followed up with subsidies, pushing the peak daily order volume to 150 million at one point to ensure its leading position.
Throughout Q3 of 2025, the total average daily orders of food delivery on the three platforms once exceeded 200 million. At the same time, the year - on - year decline in the net profit of each platform in a single quarter exceeded 50%. It was a situation that had never occurred in the past few years that three profitable companies actively burned more than half of their profits at the same time.
As the profits of each company began to be overburdened, the subsidy intensity began to tighten at the end of Q3.
Wang Puzhong, the CEO of Meituan's CLC, called on the industry to return to normal business judgment and rationality through the media. Xu Ran, the CEO of JD.com, also said that JD.com would not pay attention to the minor actions of its competitors. JD.com's food delivery business "is not in a hurry".
Coupled with the continuous tightening of industry regulations, the food delivery war was put on hold temporarily.
03. The Competition and Threats Under the Surface Are Still Severe
As the food delivery war entered 2026, the tone has become clear. The intensity of food delivery has decreased, but the competition in the entire instant retail battlefield will not ease.
According to a report by LatePost, in May this year, Alibaba made an important personnel adjustment. Wu Zeming, the Group CTO, joined the Alibaba Partnership Committee and became the fifth member of the committee. The reporting line of Yan Xiaolei, the CEO of Hema, was adjusted from Wu Zeming to report directly to Jiang Fan, who is in charge of Alibaba's entire business segment.
Both adjustments are highly related to instant retail. Wu Zeming is also the CEO of Taobao Flash Purchase, and Hema is an important part of Alibaba's instant retail segment.
Currently, Alibaba's instant retail formats cover offline supermarkets, department stores, Hema stores, Hema front - warehouses, and Tmall Supermarket. The platform and self - operated models are combined. The average daily order volume of non - food instant retail under the full - scale has reached half of Meituan's. This organizational structure adjustment also means that Alibaba has unified all instant - retail - related formats under the China E - commerce Business Group, which is managed by Jiang Fan.
In addition, Alibaba is also participating in the negotiation to acquire Pupu Supermarket. A few weeks ago, the media reported that Alibaba, JD.com, and Meituan were all involved in the acquisition of Pupu Supermarket, a fresh food front - warehouse enterprise.
A person close to Meituan told "Focus One" that Meituan only participated in the acquisition negotiation in the early stage but did not continue due to the high asking price.
Compared with Alibaba's active expansion in instant retail, Meituan hopes to rely on its existing Meituan Flash Purchase and self - operated front - warehouse Xiaoxiang Supermarket to expand the non - food market.
In the latest quarterly financial report, Meituan adjusted the disclosure scope and separately listed the revenue from self - operated businesses such as Xiaoxiang Supermarket, Kuailv, medicine, and alcohol as "Commodity Sales Revenue". After separately disclosing this data, Meituan's data on self - operated retail business was presented more clearly.
In Q1, Meituan's commodity sales revenue from new businesses reached 17.989 billion yuan, a year - on - year increase of 40.7%. This incremental part was mainly contributed by Xiaoxiang Supermarket.
In February this year, Meituan further strengthened its front - warehouse layout by acquiring Dingdong Maicai. On February 5, Meituan issued an announcement stating that it would acquire all the issued shares of Dingdong Maicai and its business in China at a consideration of 717 million US dollars (about 5 billion yuan).
Dingdong Maicai has more than 1,000 front - warehouses and 7 million monthly active users. This acquisition is mainly a supplement to the Xiaoxiang Supermarket format. At the same time, Meituan Flash Purchase, the instant retail business of the platform model, is also continuously expanding. It has currently built more than 30,000 front - warehouses and plans to build 100,000 by 2027.
Compared with Alibaba and Meituan, JD.com does not pursue scale advantages but focuses more on the synergy between JD 7FRESH and JD Express Delivery and the construction of the supply chain.
The most intense period of the food delivery war has passed, but this does not mean that the competition among the giants will weaken. It just means that the battlefield has changed. On the new battlefield of instant retail, the challenges come not only from the outside but also from within.
Alibaba needs to balance its investment in AI and large - scale consumption in the coming year. The long - term two - front battle has put a heavy burden on its profits.
What Meituan needs to solve may be the synergy between the platform and self - operated businesses. For a long time in the past, Meituan Flash Purchase and Xiaoxiang Supermarket, the two main forces in instant retail, have operated independently. The former belongs to CLC, and the latter belongs to the grocery retail segment. Xiaoxiang pays lower commissions to Meituan's food delivery riders than itself. When Alibaba fully integrates its instant retail formats and launches an all - out attack, Meituan should think more about how to solve the problem of business synergy.
In addition, during the intense food delivery war, Alibaba's e - commerce business and Meituan's in - store business have also been "attacked" by competitors to varying degrees. The impact brought by Douyin is the most significant. For the main participants in the food delivery war, the threats under the surface may be more severe than the visible competition.