Analysis of Meituan's Competitive Defense Strategies in the Instant Retail Market

Based on the latest searched information, I will conduct an in-depth analysis from three dimensions: industry landscape, Meituan’s defense dilemmas, and feasible strategies.

According to the latest data, the instant retail market has formed a three-way stalemate by 2025:

Platform	Order Share	Daily Order Volume	Core Advantages
Meituan	~50-55%	120 million+ orders	Fulfillment network, instant delivery efficiency
Taobao Flash Sale	~42-45%	80-100 million orders	900 million user traffic from Taoxi ecosystem, supply chain integration
JD Delivery	~7-8%	25 million+ orders	Quality positioning, traffic diversion from JD App

Notably, the share gap between Taobao Flash Sale and Meituan has narrowed from the original 8:2 to around 5:4, a significant reduction [1][2].

In the second and third quarters of 2025, the three major platforms have invested a total of over RMB 100 billion in the instant retail sector:

• Meituan
  : Q3 sales and marketing expenses reached RMB 34.3 billion, a year-on-year increase of 90.9%
• Alibaba
  : Sales expenses reached RMB 66.5 billion, a year-on-year surge of 104.8%
• JD.com
  : New business (including delivery) reported a loss of RMB 15.7 billion

Goldman Sachs estimates that Meituan incurs an average loss of approximately RMB 1 per instant delivery order [3][4].

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Meituan’s Q3 2025 financial report shows:

• Adjusted net loss of
  RMB 16 billion
  (compared to a profit of RMB 12.8 billion in the same period last year)
• Operating profit of the core local business segment turned from positive to negative, with a loss of
  RMB 14.1 billion
• Operating profit margin plummeted from 21.0% to -20.9%, the worst record since its IPO [5]

CICC predicts that Meituan’s full-year adjusted net loss in 2025 will reach RMB 16.8 billion.

• Market share shrank from over 70% to around 50%
• 15-20 percentage points of share were eroded by Taobao Flash Sale
• A JPMorgan report shows that Meituan’s delivery share has dropped to 50% as of November [6]

Moat Elements	Current Status
Delivery Efficiency	The gap in fulfillment costs has narrowed to RMB 0.3, and Alibaba Flash Sale’s logistics costs have decreased by RMB 0.5
Merchant Resources	Chain KA merchants have basically achieved dual-platform operation, weakening the supply-side barrier
User Mindset	Taobao Flash Sale has captured over half of the share in key cities (Shanghai, Wenzhou, Xiamen)

Bernstein analysts pointed out: “Many once believed that Meituan’s moat was impregnable, but the situation in 2025 shows that disruption is not impossible, just extremely costly.” [7]

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, which is Meituan’s core advantage zone:

• Orders above RMB 15
  : Maintain a share of over 70%
• Orders above RMB 30
  : Maintain a share of over 70%

Meituan’s current average order value is

. The better user structure brings higher subsidy efficiency, requiring less spending to maintain the same order volume [8].

Direction	Specific Measures
Fulfillment Efficiency	Maintain an average delivery time of 34 minutes, promote drone delivery (has completed over 670,000 commercial orders cumulatively)
Intelligent Dispatching	Leverage algorithm advantages to reduce per-order costs
Precision Subsidies	Provide targeted subsidies to core users (Black Diamond, Black Gold), reduce invalid subsidies for “coupon clipping” users

, extending competition from catering to full categories:

• The proportion of non-food orders has increased to
  30%
• Peak daily instant retail orders exceeded 150 million
• Signed cooperation agreements with convenience stores such as Sinopec EasyJoy to promote digital development [9]

Meituan CEO Wang Xing clearly stated that investment in domestic new businesses in 2026 will not exceed that in 2025, with key investment focused on

:

• Achieved profitability in the Hong Kong market within two and a half years
• Become the second-largest platform in terms of order share in the Saudi Arabian market in the Middle East
• Launched operations in the Brazilian market in October 2025, and went live in São Paulo in early December

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1. Price wars will cool down
   : After regulatory interviews, all three platforms have successively scaled back subsidies, and a “temporary truce” is highly likely in 2026
2. Competition will upgrade
   : From subsidy-driven attacks to in-depth competition of “system capabilities + ecosystem collaboration”
3. Scale vs. Efficiency
   : Who can accumulate capabilities after “burning money” and find a balance between efficiency and service will determine the final outcome

Key Factors	Meituan’s Advantages	Taobao Flash Sale’s Advantages
Fulfillment Network	7 million riders, mature system	Reuses Ele.me’s network
User Structure	High proportion of medium-to-high order value users	Targeted subsidies for 88VIP users
Ecosystem Collaboration	Local life closed loop	Taoxi e-commerce traffic + supply chain integration
Capital Reserves	Cash flow under pressure	Alibaba’s cash flow is several times that of Meituan

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The challenges facing Meituan are:

. In 2026, Meituan needs to shift from passive defense to active differentiated competition, with core strategies including:

1. Hold onto the user base of medium-to-high order value users
   , which is the source of profits
2. Improve operational efficiency
   to reduce per-order costs
3. Accelerate the layout of non-food instant retail
   to expand growth space
4. Scale back loss-making domestic businesses
   and focus resources on developing overseas markets

As an industry insider put it: “When market share is stable, you can expand in all directions; when core businesses are challenged, strategic choices and resource focus become even more important.” [10]

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[1] Southern Metropolis Daily - After Burning RMB 100 Billion, Instant Retail Shifts from Traffic Subsidies to Competing for Super Entrances of Lifestyles (https://news.qq.com/rain/a/20260107A04PDD00)
[2] FMCG China News - Alibaba Clarifies 2026 Strategy: Increase Investment in Taobao Flash Sale to Compete for Absolute Market No.1 (http://www.fmcgchina.com/newsinfo/10930127.html)
[3] China Business Journal - The Battle of Instant Retail: Who Bleeds and Who Grows (https://wap.eastmoney.com/a/202601033607638146.html)
[4] 36Kr - Reviewing the 2025 Delivery “Three-Kingdom Battle”: Where Will the Market Go After Burning RMB 100 Billion? (https://m.36kr.com/p/3616456454980611)
[5] Node Finance - In 2026, Meituan Cannot Afford to Lose, But Winning Is Even Harder (https://finance.sina.com.cn/stock/t/2026-01-05/doc-inhffmxt2182379.shtml)
[6] Leifeng Network - The Delivery Battlefield: What Has Changed and What Hasn’t (https://finance.sina.com.cn/roll/2025-12-18/doc-inhcfrcc6566873.shtml)
[7] Sina Finance - Taobao Flash Sale Sets Flag to Compete for No.1, Meituan Refuses to Back Down (https://finance.sina.com.cn/stock/t/2026-01-08/doc-inhfsfzv3137369.shtml)
[8] NetEase - Richard Liu: JD.com Enters the Delivery Market in 2025, Restructuring the Duopoly Pattern of Meituan and Ele.me (https://www.163.com/dy/article/KI9EMQP40556HJ0H.html)
[9] Financial Times - Meituan’s Domestic Market Situation Sparks High-Level Discussions (Cited from Phoenix Net Report)
[10] Leifeng Network - Analysis of the Delivery Battlefield (https://finance.sina.com.cn/tech/roll/2026-01-09/doc-inhftcfm2881641.shtml)