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China’s food-delivery price war sees Meituan, Alibaba, JD.com incur $14B incosts across two quarters
China's food-delivery sector is embroiled in a costly price war, with Meituan, Alibaba, and JD.com incurring over $14 billion in costs. Meituan reported a significant $2.7 billion operating loss in Q3 2025, while Alibaba's profit plummeted drastically. All three companies heavily invested in subsidies to compete, impacting their profitability significantly.
Key points
- Meituan reported an operating loss of $2.7 billion in Q3 2025, its largest since going public.
- Alibaba's operating profit fell from $4.9 billion to $0.75 billion.
- JD.com recorded a $1.4 billion operating loss in the same quarter.
- Combined, the three companies faced over $14 billion in costs due to delivery subsidies and related expenses over two quarters.
- Meituan's sales expenses surpassed those of competitors like Pinduoduo despite lower transaction volumes.
- Alibaba's Taobao Instant Commerce reached a 40% GMV share in restaurant delivery.
Why it matters
- This price war reflects the ongoing disruptions in the delivery market, mirroring broader trends in the hyper-competitive tech industry.
- The current trends exhibit a shift towards profitability and efficiency as companies navigate post-pandemic spending.
- By 2025, the increasing adoption of digital commerce and delivery services will likely continue to fuel this competition, emphasizing the importance of strategic pricing.
The severe financial losses from the food-delivery price war highlight the unsustainable nature of aggressive subsidy strategies, prompting these companies to reassess their operational models while facing a rapidly evolving market landscape.