Meituan, Alibaba hit with $14b costs in China’s delivery price war

China’s major food delivery firms have spent over 100 billion yuan (US$14 billion) on subsidies and sales expenses during Q2 and Q3 2025.

Meituan reported a 19.8 billion yuan (US$2.7 billion) operating loss in Q3, which is its largest since going public.

Alibaba saw its operating profit fall from 35.2 billion yuan to 5.4 billion yuan (US$4.9 billion to US$750 million) in the same quarter.

JD.com posted a 10.5 billion yuan (US$1.4 billion) operating loss after cutting spending.

Meituan’s sales expenses were higher than those of Pinduoduo, despite handling fewer transactions.

Alibaba said that its Taobao Instant Commerce unit made up 40% of restaurant delivery gross merchandise value when looking at a two-player market.

🔗 Source: TechNode

🧠 Food for thought

Implications, context, and why it matters.

Alibaba says Taobao Instant Commerce holds 40% of restaurant delivery GMV in a two-player market. Estimates in 1 put JD.com at 10–25% by Q2 2025, Meituan at 45–52% after ~70%, and Alibaba at 30–40% 1.
This framing hides the real squeeze on Meituan from both Alibaba and JD.com. JD.com went after Meituan’s lead by offering merchants commission rates 5–10 percentage points below Meituan’s around-25% take rate, per merchant reports 1.
JD.com runs a quality-first play 2 with service reliability and branded merchants, plus lower fees or up to three years zero commission in hotels 1. Meituan posted a Q3 operating loss of 19.8 billion yuan.

Meituan’s core local commerce margin fell from 25.1% to 5.7% in Q2 2025 1. Sales plus marketing by Meituan, Alibaba’s Taobao Instant Commerce, and JD.com topped 100 billion yuan in Q2 2025, pressuring per-order unit economics 1.
Agencies, SaaS vendors, and payment firms can time entry by tracking Douyin’s Local Services build-out. Douyin (the Chinese version of TikTok run by ByteDance) focuses on discovery, group-buying, and partnerships, not its own delivery network 3. Restaurants want options as Meituan merchant costs reach about 25% of revenue 1.
Best opening for food service operators and B2B enablers in tier-2 and tier-3 cities. Douyin Local Services is expanding beyond short video with historically lower commissions than incumbents 4.