Meituan acquires Dingdong Maicai

As the Spring Festival approaches, a thunderous sound has echoed through the internet community.

On February 5th, Meituan (3690.HK) announced its plan to fully acquire Dingdong Maicai for USD 717 million. This is not only the most significant transaction in the local lifestyle sector at the start of 2026 but also signifies that the years-long "fresh e-commerce melee" and "front warehouse competition" have hit the accelerator at this moment. It can even be said that this is the final battle of the first half of fresh e-commerce.

According to the announcement, after the completion of this transaction, Dingdong will become a wholly-owned subsidiary of Meituan, and its financial performance will be consolidated into Meituan Group's financial statements. This acquisition can be seen as a crucial step for Meituan in transitioning from "burning money to seize market share" to "ecosystem integration" in the instant retail battlefield.

Just before the announcement, in the third quarter of 2025, Meituan delivered a grim financial report: revenue growth was nearly stagnant, and the core local business operating profit turned from profit to loss, with losses reaching 14.1 billion yuan, and adjusted net losses amounting to 16 billion yuan.

From the shutdown of the shelf e-commerce business "Tuan Hao Huo" to the contraction of the community group buying business "Meituan Youxuan," and now to the full acquisition of the leading domestic fresh e-commerce player Dingdong, Meituan is withdrawing resources from businesses that are misaligned with its core DNA and is fully focusing on the instant retail battlefield.

Regarding this acquisition, Dingdong Maicai also released a letter to all employees. Dingdong Maicai's founder and CEO Liang Changlin candidly stated in the letter that the news might make employees feel "surprised" and "uneasy," but he systematically explained why they chose Meituan.

Liang Changlin stated: "After the merger, Dingdong's three core competitive advantages: extreme product strength, exceptional service capability, and the ultimate efficiency created through the supply chain system, will not disappear due to the merger; instead, they will play a greater value on a larger platform."

Why Dingdong?

As competition in instant retail enters a "knife fight" stage, the focus of competition is shifting from traffic and subsidies to empowering merchants, managing the product supply chain, and maintaining the health of the entire retail ecosystem. Acquiring Dingdong at this time is a precise "supplement" for Meituan.

The fresh category is a core battlefield in instant retail that is high-frequency, essential, and relatively high-margin, and it is also key for platforms to acquire and retain users. However, the supply chain management of fresh products is complex and requires high standards for warehousing, distribution, and quality control.

Dingdong is one of the leading players in this field. Its biggest advantage lies in its supply chain—high direct procurement rates from fresh production areas and a rich matrix of private label products. As of September 2025, it operated over 1,000 front warehouses in China, building a dense end fulfillment network.

Meituan itself has a strong distribution network and traffic entry points, but in terms of supply chain depth and product strength in the fresh category, it still lags behind specialized vertical e-commerce. Acquiring Dingdong means Meituan can directly obtain a mature and efficient fresh supply chain system, filling the gap in its product strength.

This acquisition aligns with Meituan's current strategic shift to "fully focus on instant retail."

Previously, Meituan had shut down the "Tuan Hao Huo" business, which was mismatched with instant scenarios, and contracted its community group buying business. The released resources are being directed towards the instant retail system, with "Meituan Shangu" and "Xiao Xiang Supermarket" as the two main pillars. The addition of Dingdong will undoubtedly inject strong supply chain capabilities into the self-operated fresh brand "Xiao Xiang Supermarket." In the all-staff letter, Liang Changlin further emphasized the advantages of this acquisition.

He introduced, "Dingdong has established a strong supply chain capability over the years, with over 85% of fresh produce sourced directly, 12 self-operated factories, and 2 self-operated farms." He further added, "Xiaoxiang Supermarket has also achieved very strong growth in the past few years. After the merger, Dingdong's three core competitive advantages: exceptional product strength, exceeding service capabilities, and extreme efficiency created through the supply chain system, will not disappear due to the merger; instead, they will play a greater value on a larger platform."

At the same time, Liang Changlin also made a commitment to the employees. He stated, "The business and team of Dingdong Maicai will remain stable, and everyone will still have a very stable development platform. Moreover, Meituan's business landscape is very broad, and this merger opens up greater career space for everyone."

Instant Retail Positioning

Meituan's acquisition is not a coincidence, but a key move in its long-term strategy in the instant retail sector.

2025 is a watershed year for the development of instant retail in China. In this year, the market size of instant retail approaches the trillion yuan mark, and platform companies collectively increase their investment in the instant retail track. The battle of instant retail has spread from simply "delivering everything" to the depths of the supply chain.

At the beginning of 2025, JD.com made a high-profile entry into the delivery market, igniting a nationwide instant retail war. Meituan subsequently launched its instant retail brand "Meituan Flash Purchase," offering an average delivery service within 30 minutes. Taobao Tmall's "Hourly Delivery" service was upgraded to Taobao Flash Purchase, integrating brand merchants' urban warehouses and offline store resources.

This competition has brought hundreds of billions of resources from all three parties, rapidly pushing the industry's daily order scale to a peak of hundreds of millions. In the third quarter of 2025, the three major platforms collectively spent 61.4 billion yuan on sales and marketing expenses, mainly for delivery business subsidies.

Intense competition has led to a decline in profitability across major platforms. In the third quarter of 2025, Meituan reported an adjusted net loss of 16 billion yuan, compared to a net profit of 12.83 billion yuan in the same period last year. Alibaba and JD.com's net profits also fell by 53% and 54.7% year-on-year, respectively.

As the defender, the offensive from other companies has diminished Meituan's previous position, and Meituan needs a new strategy to maintain its competitive edge.

Meituan's acquisition of Dingdong can be seen as a landmark event marking the new phase of competition in the instant retail industry. It indicates that the industry's main theme is shifting from "capital-driven subsidy wars" to "capability-driven supply chain wars."

The frenzied subsidies of the past year have quickly educated the market, but they have also made all players realize that "burning money for scale is unsustainable." A report from JP Morgan predicts that high subsidies will begin to ease in the first quarter of 2026.

Future competition will focus more on deepening the supply side (merchants and products). This can be seen from the recent actions of Meituan and Alibaba: Meituan Flash Purchase launched the "Brand Official Flag Lightning Warehouse," aiming to jointly build an instant retail ecosystem with tens of thousands of brands; Taobao Flash Purchase released a new chain convenience brand "Taobao Convenience Store," strengthening supply-side capabilities.

In this context, vertical integration and deepening the supply chain will become key strategies for giants to consolidate their moats. Acquiring Dingdong is Meituan's proactive move in this trend. It can be anticipated that in the future, competitors like Alibaba and JD.com may also strengthen their supply chain capabilities in specific categories through investments or acquisitions For Meituan, the acquisition of Dingdong is both a defensive and offensive move.

The defense lies in the fact that, in the fierce market competition, Meituan needs to strengthen the "walls" of its fresh food category to prevent competitors from entering through this high-frequency entry point, undermining its local life foundation. In the face of Alibaba's aggressive "Taobao Flash Purchase" and JD's flanking harassment, reinforcing its most core battlefield is urgent.

The offense is that this acquisition is an important piece in Meituan's construction of a "30-minute delivery for everything" retail empire. By integrating Dingdong, Meituan can provide users with a richer and more stable quality of fresh products, increasing the average transaction value and user stickiness, thereby expanding the instant retail market and achieving more sustainable growth and profits.

The ultimate outcome of instant retail will not be a single platform's victory, but a competition between ecosystems. Meituan's acquisition of Dingdong is preparing a heavyweight chip for this higher-dimensional ecological battle.

A Wall Street Journal reporter contacted Meituan immediately after the acquisition announcement, and the other party stated that there is currently no more information that can be disclosed