🥊 Price War Eats Profits: Delivery giant Meituan slips into the red for the first time since 2022. Q3 loss: –16 billion yuan (–$2.3 billion). The cause is the brutal three-way fight with Alibaba and JD in food delivery and quick commerce.
💸 Growth Without Profit: Revenue rises just +2% to 95.5 billion yuan. Billions are being burned on discounts, subsidies and free deliveries to stimulate demand. Market share is being defended at ruinous cost.
📉 Market Share Under Pressure: Morningstar expects Meituan’s quick commerce share to fall from 73% to 55% by 2027. Alibaba is seen rising to 40%, JD to 6%. The fight is far from over and is getting harsher.
🌍 Flight Abroad: Meituan’s overseas brand Keeta is expanding into the Middle East, Brazil and possibly India next. Analysts see this as a quiet admission that the domestic market is becoming barely profitable to win.
🧠 China Reality: It’s not the best algorithm that decides, but pricing power, purchasing power and real demand. China does not suffer from too little technology, but from too much capital chasing stagnant consumption.
Big Picture
Meituan’s losses are not an isolated case, but a symptom of China’s structural involution: world-class production meets weak domestic demand. Factories, platforms and logistics are upgraded faster than incomes and consumption. The result is a system where companies move up technologically but slide down economically.
Involution is not caused by competition itself, but by too many players in markets where demand no longer grows.
The China Survival Guide for Western Businesses
Entity setup, WeChat strategy, hiring your first local team. 12+ years on the ground in Shanghai.
