Meituan reported 2025 revenue of RMB 364.9 billion, up 8% year over year, but China’s local-services giant swung to a net loss of RMB 23.4 billion as instant-retail and food-delivery price wars intensified. The March 26 results show more than a weak profit line. They offer one of the clearest readouts yet on how aggressive subsidy competition is reshaping China’s quick-commerce market: even the category leader is seeing margins break under pressure, yet it is still raising AI spending, expanding drone and robotics capacity, and pushing Keeta deeper into overseas markets.
Revenue kept growing, but subsidies erased profits
The official results make the core contradiction hard to miss. Meituan said full-year revenue reached RMB 364.9 billion, while operating loss came to RMB 17.0 billion and net loss reached RMB 23.4 billion. IT Home noted that this was a sharp reversal from a RMB 35.8 billion profit in 2024. Meituan directly attributed the deterioration to “involution-style” competition in instant retail, a phrase that matters because it ties the earnings miss to a wider Chinese business debate about destructive price wars rather than to a one-off execution mistake.
That context matters for interpreting the rest of the numbers. Meituan said its core local commerce segment generated RMB 260.8 billion in revenue in 2025, but the segment still posted an operating loss of RMB 6.9 billion for the year after the company increased direct subsidies for restaurants and leaned on newer supply models such as branded satellite stores and its Pinhaofan value offering. In other words, Meituan is still adding scale in the business that defines it, but it is paying more to protect demand and merchant activity in a market where rivals are also subsidizing heavily.
Even so, Meituan is framing the result as a defense of share rather than a retreat. The company said it maintained more than 60% of food-delivery gross transaction value market share while keeping losses far below those of competitors, and it said annual transaction users and purchase frequency both hit record highs. That claim is important because it suggests management sees 2025 as a year of deliberately absorbing pain in order to preserve market leadership and user habits while the sector fights through an unusually intense pricing cycle.
AI and robotics spending did not slow when profits disappeared
The other striking part of the earnings report is what Meituan did not cut. Research and development spending rose 23% year over year to RMB 26.0 billion, even as the company moved into the red. That is a strong signal that management does not see AI as discretionary spending to trim during a price war. It sees the technology stack as one of the few ways to defend margins, improve merchant tools and build a more durable operating system for local services.
Meituan’s own language was unusually ambitious. The company said it is building “AI infrastructure and action capability for the physical world,” a phrase that goes beyond chatbots or ad targeting. By the end of 2025, Meituan’s drones had opened 70 routes across cities in China and overseas and had completed more than 780,000 orders in total. It also said more than 3.4 million merchants were already using its AI business assistant tools. Those figures matter because they show Meituan trying to turn AI from a consumer-facing narrative into operating leverage across logistics, merchant software and service fulfillment.
The consumer side of that strategy is also getting more visible. Meituan said it used its self-developed multimodal LongCat model family together with open-source models to launch AI assistants for users, including “Xiaomei” and “Xiaotuan.” During the Lunar New Year holiday, the company said more than 100 million user interactions went through Xiaotuan for dining, travel and local-services planning, while the system checked 700 million merchant information points and recalibrated them using 1.3 billion real user reviews. Whether every one of those products becomes a breakout success is still an open question, but the spending pattern is clear: Meituan is treating the current margin squeeze as a reason to deepen its technology moat, not to delay it.
Keeta shows Meituan is still funding offense, not just defense
The same logic appears in Meituan’s overseas business. New initiatives revenue rose 19% year over year to RMB 104.0 billion, supported by grocery retail and international expansion. Meituan said Keeta, after establishing itself in Hong Kong, had already expanded across major Gulf markets and entered Brazil. It also said Keeta turned UE-positive in Hong Kong in the fourth quarter and showed strong momentum in Saudi Arabia, Qatar, Kuwait, the United Arab Emirates and Brazil.
That is strategically important because it means Meituan is still spending for growth outside China while fighting a subsidy war at home. The easy reading of a loss-making year would be that management now needs to pull back and conserve cash. The harder, and more revealing, reading is that Meituan still sees enough long-term upside in international delivery to keep funding the rollout. Keeta is no longer just a Hong Kong test. It is becoming part of a broader narrative in which Meituan wants to prove that the know-how built in China’s hypercompetitive local-services market can travel overseas.
Reuters-linked coverage on MarketScreener adds another useful angle. One item said Meituan’s fourth-quarter revenue reached RMB 92,096.4 million, showing that quarterly scale remained large even as profitability stayed under strain. That detail matters because it reinforces the central point of the year-end report: the issue is not disappearing demand. It is that the sector’s current pricing structure is making it much harder for even a high-volume leader to convert growth into earnings.
Beijing’s anti-price-war push changes the backdrop
This is also why the policy backdrop deserves attention. Another Reuters report, carried by MarketScreener on March 25, said Chinese food-delivery giants surged after regulators and state media called for an end to the price war. That signal lines up closely with Meituan management’s own insistence that it is firmly opposed to involution-style competition. Together, the company statement and the Reuters framing suggest the debate has moved beyond corporate rivalry. The pressure is now visible enough that policymakers and official media are treating excessive discounting as a broader industry problem.
For an English-language audience, that is the most interesting layer of the story. Meituan’s earnings are not only a company update. They are evidence that China’s quick-commerce competition has reached a stage where the market leader can still grow revenue, hold share and expand abroad, yet still end the year with a large net loss because subsidy intensity has become structurally too high. When officials start signaling that such competition should be curbed, it usually means the market has gone from aggressive to destabilizing.
What changed, and what could happen next
What changed with this earnings release is that Meituan turned the cost of China’s instant-retail war into a measurable public record. The company is no longer just talking about competition in abstract terms. It has now shown that an 8% revenue gain, a market-leading delivery position and fast-growing new businesses were still not enough to protect annual profitability. At the same time, it made clear that AI, robotics and Keeta are not side bets that can wait until market conditions improve. They are part of the response.
What could happen next is a more visible split in the sector between short-term pricing discipline and long-term capability building. If regulatory pressure and state-media messaging really do push the industry away from the most destructive forms of subsidy warfare, Meituan could be better positioned than smaller or less diversified rivals because it kept investing through the downturn. If the price war drags on, however, 2025 may look less like a temporary earnings dip and more like proof that China’s local-services leaders will have to buy time with profits before they can rebuild margins with technology. Either way, Meituan’s results have changed the conversation. The question is no longer whether competition is expensive. It is how long the sector can afford to keep paying this price.
Related coverage
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Sources
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Meituan — Meituan Announces Fourth Quarter and Full Year 2025 Results
– https://www.meituan.com/news/NN260326174005788
– Key takeaway: Official source for full-year revenue of RMB 364.9 billion, net loss of RMB 23.4 billion, operating loss of RMB 17.0 billion, segment results, R&D growth, Keeta expansion and AI / drone details. -
Meituan Investor Relations — Calendar / March 16, 2026 notice
– https://www.meituan.com/en-US/investor/calendar
– Key takeaway: Confirms that Meituan scheduled the Q4 and full-year 2025 earnings release for March 26, 2026, providing the formal timing context for the announcement. -
IT Home — Meituan 2025 revenue rose 8% to RMB 364.9 billion, full-year net loss reached RMB 23.4 billion
– https://www.ithome.com/0/933/015.htm
– Key takeaway: Adds the comparison that Meituan had reported a RMB 35.8 billion profit in 2024, highlighting the scale of the swing into loss. -
MarketScreener / Reuters — Meituan posts another quarterly loss as food delivery wars bite
– https://www.marketscreener.com/news/meituan-posts-another-quarterly-loss-as-food-delivery-wars-bite-ce7e51dada8af021
– Key takeaway: Supplies Reuters’ framing that ongoing food-delivery wars are the direct pressure point behind Meituan’s weak profitability. -
MarketScreener / Reuters — Chinese food delivery giants surge as regulator, state media call end to price war
– https://www.marketscreener.com/news/chinese-food-delivery-giants-surge-as-regulator-state-media-call-end-to-price-war-ce7e5ed3d989f321
– Key takeaway: Adds the regulatory and state-media backdrop showing that Beijing is signaling a push against destructive price competition in the sector.
