Chinese food delivery giant Meituan, owner of the international platform "Kitch", has posted its first quarterly loss since the end of 2022 amid intensifying competition with e-commerce titans Alibaba and JD.com. According to LSEG data, the company's net loss for the quarter ending September 30 reached 16 billion yuan ($2.26 billion), compared to a net profit of 12.8 billion yuan for the same period last year. This marks Meituan's first quarterly loss since December 2022. The company's CEO, Wang Xin, told Reuters that the price war in the food delivery market is unsustainable, calling it a "model where bad money drives out good money." He confirmed that Meituan still leads in mid-to-high-priced order categories, with its market share exceeding two-thirds of orders valued over 15 yuan and rising to over 70% for orders exceeding 30 yuan. Meituan expects further operating losses in the fourth quarter of this year, both in its local commerce segment and for the group as a whole, due to continued heavy spending to maintain its approximately 70% market share, while its competitors Alibaba and JD.com continue to pour in significant investments to attract customers. China's market is seeing fierce competition, especially in the instant retail sector, which relies on deliveries within less than an hour. Meituan's earlier entry into the electronics market—one of JD.com's strong areas—prompted the latter to launch its own food delivery platform, while Alibaba has also stepped up its efforts in the quick commerce sector. In light of these developments, Alibaba officials said this week that their focus is shifting to improving unit economics after years of pursuing market share growth. Analyst Jimmy Chan from Third Bridge expects the intensity of the price war to ease next year, forecasting that Meituan's unit economics will turn positive in the first or second quarter of 2025. This comes as Chinese regulators have introduced new pricing rules to protect small merchants, prompting major players to pledge to slow down the pace of price competition. Separately, Meituan continues to accelerate its international expansion under the "Kitch" brand in Hong Kong, the Middle East, and Brazil, where it launched its services last October. Despite its shares falling more than 30% since the beginning of the year, the company announced a 2% increase in third-quarter revenue, beating analyst expectations.
