Meituan's subsidy war cools as Q2 profit returns, but Alibaba and JD keep fighting
New subsidy rules curb the cash-burning delivery war China's market regulator proposed 10 rules banning prolonged, large-scale subsidy wars in food delivery. Meituan has burned huge cash defending its share, so less forced discounting should improve its long-term profit per order, even though the shares dipped on the day.
Regulation directly changes the competitive economics that have crushed Meituan's margins.
Alibaba bids $1.5B for Pupu, reigniting grocery-delivery rivalry Alibaba offered $1.5 billion for grocery delivery firm Pupu, months after Meituan agreed to buy Dingdong Fresh for $717 million. The bidding war shows rivals are again spending to win market share rather than protect profits, which pressures Meituan to keep investing.
A direct competitive escalation that could reverse the profit-friendly subsidy truce.
JD.com stays aggressive in delivery despite calmer fight JD beat profit estimates as its food delivery losses narrowed, and still targets 30% of the instant-delivery market by year-end, double its starting share. Even with regulators warning against aggressive competition, JD's expansion keeps pressure on Meituan's share and pricing.
Shows the competitive threat is structural, not fading, even as JD's losses shrink.
Record Q2 revenue and return to core profitability Meituan posted record quarterly revenue of RMB104.6 billion, up 14.4%, with adjusted net profit of RMB2.5 billion and core local commerce back in profit. It holds RMB168.3 billion cash and may sell investments worth over RMB70 billion to fund growth and returns.
The clearest evidence yet that Meituan's core business can make money again.