The cost of the price war is devastating! Meituan has reported a loss for the first time in three years, with a core local business loss of 14.1 billion yuan in Q3, and the loss trend is expected to continue in Q4 | Financial Report Insights
Meituan's adjusted net loss for Q3 was RMB 16 billion, compared to a profit of RMB 12.8 billion in the same period last year. The core local commerce business turned from profit to loss, recording an operating loss of RMB 14.1 billion, while it was a profit of RMB 14.6 billion in the same period last year. Meituan stated that market competition has intensified recently. Therefore, it is expected that the trend of operating losses will continue in the fourth quarter for both the core local commerce segment and the company as a whole
Under intense industry competition, Meituan reported a net loss of RMB 16 billion in Q3 after adjustments, compared to a profit of RMB 12.8 billion in the same period last year. The core local commerce business turned from profit to loss, recording an operating loss of RMB 14.1 billion, compared to an operating profit of RMB 14.6 billion in the same period last year, dragging the company's overall loss beyond market expectations.
Meituan stated that recent market competition has continued to intensify. Therefore, it is expected that the trend of operating losses in the core local commerce sector and the company as a whole will continue in the fourth quarter.
On the 28th, Meituan announced its Q3 financial report for the period ending September 30, 2025:
- Meituan's Q3 revenue was RMB 95.5 billion, a year-on-year increase of 2.0%. Estimated at RMB 97.47 billion.
- Q3 adjusted net loss was RMB 16 billion, estimated loss of RMB 13.96 billion.
Core Business Under Pressure
As the cornerstone business of Meituan, the core local commerce division faced severe challenges in Q3. Revenue for this division decreased by 2.8% year-on-year to RMB 67.4 billion, and the operating profit margin plummeted from 21.0% in the same period last year to negative 20.9%. The operating loss of RMB 14.1 billion in Q3 sharply contrasts with the operating profit of RMB 14.6 billion in the same period last year.
The financial report attributed this to adjustments in business strategy to cope with fierce competition in the food delivery industry. Data shows that the company's sales and marketing expenses surged by 90.9% year-on-year to RMB 34.3 billion, with the percentage of revenue rising from 19.2% to 35.9%. At the same time, to ensure the stability of instant delivery services and enhance user stickiness, rider subsidies were correspondingly increased, further driving up sales costs. The company expects the trend of operating losses in Q4 for the core local commerce and overall company operations to continue.
Despite the pressure on profits, Meituan still achieved growth in user numbers. The company stated that daily active users and monthly transaction users for food delivery reached new highs in Q3, with a steady year-on-year growth in core user scale, and both consumption frequency and stickiness improved.
New Business Continues to Expand
In contrast to the difficulties faced by the core business, Meituan's new business division continued to maintain growth momentum in Q3. Revenue for this division grew by 15.9% year-on-year to RMB 28 billion, mainly driven by the expansion of grocery retail and overseas businesses.
However, expansion also comes with increased investment. The operating loss of the new business division widened from RMB 1 billion to RMB 1.3 billion year-on-year, with the operating loss margin slightly increasing to 4.6%. The financial report stated that the increase in losses was mainly due to the costs and operating expenses associated with the expansion of overseas business. However, the operating loss margin for the new business narrowed from 7.1% in Q2 to 4.6% in the current quarter, showing significant improvement quarter-on-quarter. This was primarily due to enhanced operational efficiency in domestic grocery retail business The food delivery platform Keeta under its umbrella is accelerating its global layout. After steadily increasing its market share in Hong Kong and Saudi Arabia, it has successively entered Middle Eastern markets such as Kuwait and the UAE, and launched pilot operations in Brazil in October.
At the same time, the grocery retail business, including "Little Elephant Supermarket" and "Fast Donkey," has maintained strong growth and made progress in improving operational efficiency, partially offsetting the investment pressure brought by overseas expansion.
Cost Surge and Strategic Investment
One of the most notable features of the third-quarter financial report is the comprehensive rise in costs and expenses. In addition to significantly increased sales and marketing expenses due to competition, the company's R&D expenditure also rose by 31.0% year-on-year to 6.9 billion yuan, mainly due to the company's increased investment in artificial intelligence (AI) at the corporate level.
The financial report elaborated on the company's AI layout, including the AI tool "LongCat" for merchants and the smart life assistant app "Xiao Mei" for users. The company's goal is to integrate AI into all aspects of merchant operations and provide users with a more intelligent service experience.
In addition, the company completed the issuance of multiple US dollar and RMB senior notes after the reporting period (November 2025), with a total amount exceeding 2 billion US dollars and 7 billion yuan. As of the end of the quarter, Meituan held cash and cash equivalents and short-term financial investments totaling approximately 141.3 billion yuan, maintaining strong capital
