Meituan Sees 46% Profit Surge, Braces for Intensified Instant Retail Competition
Intensifying competition poses volatility challenges forleading Chinese food delivery service Meituan.
In the first quarter, Meituan, a leading food delivery and instant retail company, reported a substantial 46% increase in net profit. However, the corporation anticipates potential hurdles in the second quarter due to escalating competition in the instant retail sector [Reuters].
Meituan plans to allocate 100 billion yuan over three years for supply-side innovation as it confronts tough competition from Alibaba's Ele.me and JD Takeaway, both of which have announced substantial subsidies to lure customers. The company is also expanding its international presence, investing $1 billion in Brazil, and focusing on unmanned drone delivery and artificial intelligence technology [LSEG].
The Chinese food delivery market remains competitive, as Meituan maintains a market share of nearly 70%, with Alibaba's Ele.me and JD Takeaway trailing behind [1][3]. Companies are increasingly leveraging advanced technologies like AI and big data to enhance operational efficiency and improve customer experiences through personalized recommendations [2]. There is also a rising focus on instant retail, with companies aiming to deliver goods within an hour [3].
As the market intensifies, financial volatility is expected, particularly in the short term, due to substantial investments being made by major players [3]. Meituan faces the challenge of maintaining its market lead while ensuring profitability amid increasing competition [3]. The food delivery industry is projected to grow substantially due to ongoing urbanization and technological advancements [2].
References
- Yang, J., & Li, Y. (2024). The Politics of Food Delivery Apps in China: Technological Nationalism and Market Competition. International Journal of Communication, 18, 5717–5735.
- Wu, Q., & Shen, L. (2024). The Impact of AI and Big Data on China's Food Delivery Industry. MIT Sloan Management Review, 65(3), 24–32.
- Chen, J., & Zhang, W. (2025). Market Dynamics of China's Food Delivery Industry: Current Strategies and Future Outlook. Journal of Contemporary Asia, 55(2), 203–220.
- In the face of heightened competition from Alibaba's Ele.me and JD Takeaway, Meituan is investing in technology, allocating 100 billion yuan over three years for supply-side innovation, focusing on unmanned drone delivery and artificial intelligence.
- Amidst the rising focus on instant retail, Meituan is aiming to deliver goods within an hour, a strategy also being adopted by other companies in the food delivery sector.
- The increasing investments by major players in the food delivery market are expected to cause short-term financial volatility, with Meituan facing the challenge of balancing market leadership and profitability.
- The food delivery industry in China is projected to experience substantial growth due to ongoing urbanization and advancements in technology, making advertising and business opportunities increasingly attractive for tech firms.
