Meituan Loss Shrinks To 6.5 Billion Yuan As Subsidy War Cools

This article first appeared on GuruFocus.

Meituan's (MPNGF) losses are shrinking. That is the headline investors needed to see after a brutal subsidy war tore through China's online commerce market and crushed margins across the sector. For the March quarter, Meituan reported an operating loss of 6.5 billion yuan, or about $961 million, better than the average analyst estimate of roughly 9 billion yuan. Revenue rose 5.6% to 91 billion yuan, broadly matching expectations.

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But this is not a victory lap yet. Meituan is still fighting Alibaba Group Holding (NYSE:BABA) and JD.com (NASDAQ:JD) in food delivery, where platforms spent billions on subsidies and marketing to defend or win market share. Founder Wang Xing warned that order growth could slow in the second half because of a high comparison base from 2025, when companies pushed subsidies aggressively. Still, he said the industry is becoming more rational, with Meituan gradually pulling back subsidies while continuing to see healthy user growth and stronger engagement among core users.

The bigger story could be that Beijing's pressure is starting to reshape the battlefield. China's antitrust watchdog opened a probe into food-delivery competition practices in January, while regulators also fined Meituan, Alibaba, JD, and other rivals a combined 3.6 billion yuan over unqualified merchants tied to ghost deliveries. With domestic scrutiny still high, Meituan is pushing further overseas through Keeta, which turned profitable in Hong Kong last year, while also operating in Brazil, the United Arab Emirates, Kuwait, and Qatar. Wang has said losses from new initiatives should narrow this year compared with 2025, with the company focusing on its current overseas markets.

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