Wang Xing wants to win in every battleground.

Text | Ren Cairu

Editor | Qiao Qian

Meituan has gone through its most tumultuous quarter in over a year.

The heated battles in food delivery and flash shopping only "lightly" kicked off in the first quarter, but it was already enough to arouse too much curiosity and concern.

Judging solely from the performance, Meituan's first quarter met or even exceeded expectations - its revenue increased by 18.1% year-on-year to 86.6 billion yuan, and the adjusted net profit increased year-on-year to 1 billion yuan. Among them, the revenue of the core local business increased by 17.8% year-on-year to 64.3 billion yuan, and the new business also achieved double-digit revenue growth and a steady narrowing of losses.

However, compared with the huge uncertainties in the second quarter and the certain decline in profits, these achievements were almost forgotten by investors.

When talking about the guidance for the second quarter, the management said that it was still uncertain how long the current irrational competition would last, so they could not provide accurate guidance for the second quarter and the whole year of 2025. At the earnings conference call, the first question was about the evolution of competition in the food delivery field. Finally, Wang Xing stated, "We will spare no expense to win victory." But as he also said, "Here 10 billion yuan, there 10 billion yuan. It seems that every internet player wants to invest their 10 billion yuan in the game." - A competition at the cost of sacrificing profits has begun.

Beyond the old battlefields, the new stories cannot stop either. After entering the second quarter, Meituan has made frequent progress in internationalization. Keeta is still expanding and increasing its penetration rate in the Middle East. The Xiaoxiang Supermarket, which started going global at the end of 2024, was recently officially launched under the brand "Keemart" in some areas of Riyadh, Saudi Arabia. The first step in the Latin American market has been taken in Brazil. Last week, Meituan also celebrated Keeta's second anniversary in Hong Kong.

For Meituan, internationalization and AI are the "distant prospects" that it has to take the initiative to pursue in the new era, while instant delivery, as its traditional advantageous business, is the "immediate concern" where it must maintain its market share. It needs to look forward and also keep a close eye on the rear at all times.

All this seems to come at a cost. At the conference call, Wang Xing said that on the premise of adhering to the principle of fair and orderly competition, Meituan will continue to increase investment. "It is expected that the revenue growth of the core local business in the second quarter will slow down compared with the first quarter, and the operating profit of this segment will decline significantly year-on-year."

As a former "consistent winner", Wang Xing said, "I hope all stakeholders can look beyond short-term fluctuations and focus on our long-term competitive advantages and sustainable growth potential." However, the inevitable decline in profits in the short term cannot comfort investors. After the release of the earnings report, Meituan's stock price fell at the opening, reaching a minimum of HK$122.3 per share and closing at HK$132.1 per share on the same day. As of press time, Meituan was quoted at HK$131.4 per share.

The Instant Delivery Market is Full of Competitors, and Meituan Aims to "Win the Fight"

In Meituan's core local business, the in-store hotel and travel business has faced competitive pressure in the past period. As the competition pattern between it and Douyin has stabilized, the new battlefield has shifted to food delivery.

This food delivery war, which brewed in the second half of 2024 and started in February 2025, was initiated by JD.com. Meituan was passively forced to defend its position, and Ele.me then joined the battle.

The order volumes of several platforms have been "rolling in real-time". The latest battle situation is that JD.com announced on May 14 that its daily order volume had exceeded 20 million. On May 26, Taobao Flash Shopping, in cooperation with Ele.me, announced that its daily order volume had exceeded 40 million, of which tea and beverage orders accounted for 25%, and the growth of non-food category orders was "far beyond expectations".

Looking at the overall market, the order volumes of several platforms are all increasing, which means that the subsidy war has stimulated more incremental demand and activated the quiet food delivery market. For Meituan, it means "more medium-frequency users are increasing their ordering frequency and becoming high-frequency users."

What is the specific situation of Meituan's food delivery order volume?

Since the competitive variables were not obvious in the first quarter, its order volume increased by 9% - 10% year-on-year, mainly benefiting from the growth of "Pinhaofan" and "Shenqiangshou". Among them, the order volume of "Shenqiangshou" increased by about 50% year-on-year in the first quarter, and its order proportion also continued to increase. In the second quarter, despite the intensified competition, according to data from multiple investment banks, the order volume growth of Meituan's food delivery will still be around 10%.

The important reason why the order volume will continue to maintain a good growth trend lies in subsidies. A person close to Meituan's food delivery told 36Kr, "Initially, the internal thought that JD.com's entry was just a short-term marketing campaign, and its business model was completely unsustainable." Later, JD.com "crazy" subsidized the tea and coffee categories represented by Kudi. After Meituan observed for a period of time, around the end of March and the beginning of April, it also began to increase targeted subsidies for this category to defend its market share. It was also mentioned at this conference call that in April and May, Meituan's beverage category experienced "very strong growth".

We have noticed that Meituan has further increased its subsidy intensity in the past two months. Among them, for "Shenqiangshou" orders with an amount exceeding 45 yuan, 80% of the technical service fee will be subsidized for each order. On May 21, the daily order volume of "Shenqiangshou" exceeded 10 million.

"As long as this competition continues, our task is to win." Wang Xing said. However, in such a close - range competition, profits will inevitably be sacrificed. According to Morgan Stanley's prediction, the operating profit of Meituan's food delivery in the second quarter will decline by 24% year-on-year. Goldman Sachs predicts that the average profit per order of Meituan's food delivery in the next three quarters will decline significantly by 0.6 - 1.1 yuan year-on-year, and the profit of this business will decline by 33% in 2025.

Nevertheless, Wang Xing showed sufficient determination and confidence in the food delivery war. "In the past ten years, we have experienced several rounds of very fierce competition. I think we have the ability to win again this time." He also raised doubts about the current subsidy war. "I must point out that there is currently some irrational subsidy competition of low - price and low - quality in the industry. In the long run, this situation cannot be sustained."

In terms of objective capabilities, the supply of over 14.5 million merchants, the transportation network represented by a self - delivery ratio of over 60%, etc., are all barriers that Meituan's food delivery has formed over the past ten years and are currently difficult to be broken.

It is a consensus in the industry that the food delivery war does not exist alone. It is related to the e - commerce market share brought about by cross - sales. Among them, the instant retail business represented by Meituan Flash Shopping is becoming Meituan's biggest "open card" in doing e - commerce.

In the first quarter of this year, Meituan Flash Shopping achieved excellent results - its order volume increased by about three times that of food delivery. Among them, the order volume of non - food categories increased by more than 60%, and the total number of transaction users exceeded 500 million. After officially launching the "Meituan Flash Shopping" brand, its peak daily active users were pushed up to nearly 6.5 million, and users born after 1995 accounted for more than half. In terms of supply, Meituan Flash Shopping has 30,000 stores settled in, including more than 10,000 convenience stores, and the remaining stores cover categories such as 3C, home appliances, beauty and personal care, mother and baby, pets, daily necessities, and clothing.

The growth of flash shopping has attracted much attention because it represents a change in consumption habits. As early as the Instant Retail Conference in October 2024, Wang Puzhong, the CEO of Meituan's core local business, said that flash shopping was no longer "emergency retail" but a change in consumer psychology. "It represents a high degree of certainty in life, that is, no need to plan, no need to stock up, and everything can be delivered at any time."

In April this year, Wang Puzhong said again on the social platform that the flash shopping model of "arriving home in 30 minutes" should replace the express delivery and warehousing and distribution system of traditional e - commerce. Next, the penetration into high - customer - value areas, including large home appliances such as refrigerators and washing machines and categories such as clothing, has become the main growth direction of Meituan's flash shopping. These are also the advantageous categories of JD.com and Tmall in the past.

Pursuing victory requires investment. According to the estimates of multiple investment banks, the order volume of flash shopping is expected to increase by about 27% year-on-year in the second quarter. However, due to the company's investment in the 618 promotion, this business will record a quarterly loss. On May 27, Meituan officially announced its participation in the 618 promotion. Taking liquor as an example, 36Kr observed its discount intensity and found that the price of the eighth - generation Wuliangye with 52 degrees and 500ml was 850 - 860 yuan per bottle, which was 100 - 150 yuan lower than that in Tmall's official flagship store and JD.com's self - operated flagship store, and also lower than the price in Sam's Club.

For Meituan's core local business, including food delivery and flash shopping, what it will face in the next quarter is a slowdown in revenue growth and a significant decline in profits. However, at the conference call, Wang Xing repeatedly expressed his determination to "win the game" and "win the fight". Meituan, which has won many battles in the past, will also "spare no expense" this time.

Internationalization and AI: Achievements and Costs Coexist

Keeta's successive victories from Hong Kong to Saudi Arabia have, to some extent, verified the imagination space of Meituan's internationalization, but it is also accompanied by continuous investment and losses.

In the first quarter, the revenue of Meituan's new business increased by 19.2% year-on-year to 22.2 billion yuan, mainly benefiting from the growth of the grocery retail business (Kuailv, Youxuan, Xiaoxiang) and the development of overseas business. The loss of the new business widened from 2.2 billion yuan quarter-on-quarter to 2.3 billion yuan, due to increased overseas investment.

Looking at the overseas markets separately, the Hong Kong market, where Keeta first entered, has become quite "stable". In less than a year after entering Hong Kong, Keeta achieved the first place in market share. Under its aggressive expansion, Deliveroo, another major player, announced its withdrawal from the Hong Kong market in March this year. In its 2024 annual report, it pointed out that "due to the challenging competitive environment, Hong Kong lags behind in the major markets."

In Hong Kong, Keeta can launch a suppressing offensive against other platforms, relying on the strategy of "growing first and then making profits". The investment behind it cannot be ignored - attracting delivery riders with higher salaries, getting merchants to sign contracts with a lower commission rate, and providing users with higher subsidies and lower prices.

With its low pricing and excellent delivery capabilities, Keeta's order volume quickly increased. A local restaurant told the media, "When Keeta had been in the market for about a year, it accounted for 85% of the restaurant's food delivery orders, while Deliveroo only had a single - digit share."

However, winning the market with low prices and rider incentives and then pursuing profits may also lead to unforeseen problems. In May this year, Keeta's delivery riders in multiple districts of Hong Kong were dissatisfied with the platform's reduction of unit prices and the implementation of the priority order - dispatching and order - grabbing mechanism. How to gain more support from the public may be an issue that Keeta needs to balance besides business efficiency.

After Hong Kong, Keeta went to the Middle East and landed in Saudi Arabia. Currently, Keeta operates in 9 cities in Saudi Arabia, almost covering all cities with a population of over 1 million. An employee of Keeta in Riyadh told the media, "The company's internal assessment shows that Keeta has firmly ranked third in the market, and the goal is to become the market leader as soon as possible."

Based on the advantages of its system and experience, Meituan's strategy for occupying new markets is similar - leveraging scale with price advantages. Local Middle Eastern media described that "Keeta's aggressive price - cutting strategy is squeezing smaller enterprises and challenging the mainstream platforms in the lucrative Middle Eastern market."

Beyond food delivery, the pre - warehouse business was launched under the brand "Keemart" in Riyadh on May 22. According to 36Kr, Keemart currently only operates in the Al Yasmin and Granada districts. Its entrance is set in the Keeta App, covering categories such as fruits and vegetables, snacks, beverages, dairy products, food pantry essentials, personal care products, and cleaning supplies. It will gradually cover the whole of Riyadh this year.

The latest move is that Meituan announced in May that it would enter Brazil and invest $1 billion in the next five years. This is the most attractive large market in Latin America. The competitors Meituan will face in the future include the local "oligarch" iFood and Didi, a Chinese company that announced its entry last month.

"Many people always say that other markets are small compared with the Chinese market. It's unfair to say so," Wang Xing believes. "Saudi Arabia and Brazil provide excellent incremental opportunities for Meituan. 'Meituan is destined to become a global company. We're not in a hurry and will carefully evaluate every opportunity."

Reflected in the financial aspect, Morgan Stanley estimates that Keeta's loss this year will increase to 6 - 7 billion yuan.

Beyond internationalization, AI is another "future - oriented" focus.

At the conference call, Wang Xing reiterated Meituan's three - pronged strategy - Building LLM, AI at work, AI in products, and officially announced that it will launch the AI - driven business decision - making assistant Kangaroo Advice in June, which can help merchants with cuisine selection, store location selection, menu development, and store operation to improve their operational efficiency.

Meituan's AI roadmap is gradually being seen by the outside world. Before Kangaroo Advice, 36Kr also exclusively reported recently that Meituan launched an AI programming product "NoCode" externally, which is also a representative of "AI at work". At the end of this conference call, Wang Xing also mentioned that currently about 52% of Meituan's new code is generated by AI, and more than 90% of the members in some R & D teams are intensively using AI programming tools. "Our goal is to gradually achieve 100% adoption by all engineers."

Looking back on Meituan's development path since its establishment, it first launched fierce attacks in the group - buying war and the food delivery war. After winning the competition, the market began to worry about its new stories beyond the stable business. However, Meituan Youxuan failed to live up to the expectations for a long time. Now, Meituan is once again in the "classical" fierce battles and also has the visible "distant prospects" - looking forward, there are new imaginations of AI and internationalization; looking inward, there is a battle for market share in the instant delivery field. This situation is the sum of Meituan's states in multiple previous periods and also tests its patience and execution ability more.