Meituan Signals Heavy 2025 Loss as China’s Food-Delivery Price War Deepens

Meituan told investors it expects a substantial negative result for 2025, reversing the company’s recent profitability. The guidance points to a loss in the low‑to‑mid tens of billions of yuan, reflecting the toll of sustained discounting and promotional campaigns in on-demand meals. That swing turns the company’s 2024 earnings picture on its head and echoes an earlier period when it also reported deep losses. The announcement signals that price competition has moved beyond occasional promotional skirmishes to a structural drag on unit economics across the sector. For Meituan, the immediate effect is a deterioration of gross margins and a likely need to revisit marketing spend, merchant subsidies and product mix. For competitors and investors, the move increases the probability that scale alone will not shield platforms from profit attrition. Regulators and merchants will watch closely: continued subsidy-fueled volume gains could sustain consumer expectations of low prices and make reversion to healthier margins politically and commercially fraught. Short-term cash flow strain may prompt Meituan to reprioritize investments in higher-margin services or accelerate efforts to monetize adjacent offerings. The market will also read this as a signal of broader margin compression across China’s internet ecosystem, where user acquisition has often traded off with profitability. Ultimately, the company faces a strategic choice between fighting for share at the expense of returns or stabilizing prices to rebuild sustainable unit margins. The guidance crystallizes risks to investor sentiment and could influence sector valuations if competitors report similar dynamics. The path forward will determine whether this period becomes a temporary setback or a prolonged profit challenge for on-demand platforms.