Source | Dingjiao One ID | dingjiaoone Author | Dingjiao One Team
This year's high-profile food delivery war seems to be showing signs of winding down as we enter the fourth quarter. On November 28, Meituan's Q3 financial report showed revenue of 95.5 billion yuan, a year-on-year increase of 2%; adjusted net loss reached 16 billion yuan, compared to a net profit of 12.8 billion yuan in the same period last year, meaning a year-on-year decrease of 28.8 billion yuan. Meituan CEO Wang Xing stated at the earnings call, "The market results over the past six months have fully demonstrated that price competition in food delivery has not created value for the industry and is unsustainable." Similar signals of a truce also appeared at Alibaba: Alibaba's Q3 operating profit plummeted 85% year-on-year to 5.4 billion yuan, equivalent to a decrease of nearly 30 billion yuan. At the earnings call, Alibaba Group CFO Xu Hong stated that this quarter marked the peak of investment in the flash purchase business, and with overall efficiency improvements and scale stabilization, it is expected that overall investment in the flash purchase business will significantly contract next quarter. JD.com's "exit" came even earlier. While Alibaba and Meituan were still increasing subsidies, JD.com had already proactively reduced its food delivery investment, demonstrating its withdrawal from the subsidy war through action. By Q3, its marketing expenses had decreased by 22% quarter-on-quarter to 21.1 billion yuan. According to statistics, this food delivery war, initiated by JD.com in February, saw the three giants collectively "burn" over 100 billion yuan in instant retail business in just the second and third quarters. In this competition, what exactly did Alibaba, Meituan, and JD.com gain? And what did they pay for it? After nearly ten months of fierce competition, are the signals now released by the giants a halftime break or a collective retreat? What did Alibaba, Meituan, and JD.com gain? The ancient text "I Ching" records that the ideal state after a market transaction is "trade and retreat, each getting what they need," meaning that after the transaction, all parties are satisfied with their gains and exit accordingly. Now, as the food delivery war gradually subsides, Alibaba, Meituan, and JD.com seem to have reached the moment of "retreat" and "gain," but have they truly "each gotten what they need"? What exactly have the three companies gained from this war? Let's first look at Alibaba's situation. From a data perspective, Alibaba has indeed gained significantly in the instant retail business. In Q2, Taobao Flash Purchase's daily order peak reached 120 million orders, and in August, the weekly average daily orders reached 80 million; Taobao Flash Purchase's overall monthly transaction user buyers reached 300 million; Taobao Flash Purchase's daily active riders reached 2 million. This shows that Alibaba's subsidies for the food delivery business indeed brought about rapid scale expansion. At the same time, the ecological synergy brought by the food delivery business began to emerge. In Q2, Taobao Flash Purchase drove a 20% increase in Taobao's DAU in August; the traffic increase brought growth in commission and advertising revenue, while also reducing Taobao's own market expenses. Although detailed data was not disclosed in Q3, the company continued to emphasize the ecological synergy between instant retail and Alibaba. The report mentioned that approximately 3,500 Tmall brands connected their offline stores to the instant retail business; the user mindset for instant retail continued to strengthen and scale continued to grow, driving rapid year-on-year growth in Taobao APP MAU and consumers, while also driving growth in customer management revenue. In addition, against the backdrop of increased market competition and frequent organizational restructuring at Alibaba in recent years, the growth signals brought by instant retail have played a role in boosting overall morale within Alibaba. Although instant retail is not Alibaba's core profit point, through subsidy strategies and consumer reach, it has improved the interaction efficiency of the overall ecosystem, expanded market share, and consolidated its influence in the domestic internet industry. The capital market's feedback also indirectly confirms this. Alibaba's stock price has risen over 90% this year, achieving a rise on its own while JD.com and Meituan stocks have both fallen. Although a significant portion of this comes from the AI business, with the food delivery business being just a bonus, it has helped Alibaba return to a growth narrative. Note: Data as of December 1 Compared to Alibaba's investment for scale, Meituan is more like a defender. What this war brought it is not numbers on the books, but rather proof of its market position and competitive resilience. Meituan's Q3 report shows that daily active users and monthly transaction users for food delivery both hit new highs, with more mid-to-low frequency users migrating to high frequency, and transaction frequency and stickiness both improved. The stability of its fulfillment system seems to have been "validated" in this high-intensity competition. From the consumer side, after the low-price subsidy tide receded, consumers became more rational in their choices, and the users who remained developed a deep recognition of Meituan's service experience and fulfillment efficiency. This group of highly loyal users has become a core asset for consolidating its market position, more valuable than short-term profits. The capital market also gave feedback: after Alibaba's Q3 report was released, Meituan's stock price rose against the trend, showing the capital market's recognition of its moat. For JD.com, its layout in the food delivery field is relatively short and its investment is not as high as Alibaba and Meituan, but through this food delivery war, JD.com found a new story for its e-commerce business. JD.com's Q3 report mentioned that JD Food Delivery continues to release synergies with its core retail business, especially in user growth, user frequency increase, and cross-category shopping; Qixian Xiaochu has received widespread consumer recognition since its launch, with daily order volume remaining at a high level. For a long time, JD.com's growth has been highly dependent on the traditional e-commerce business, and it urgently needs a new business growth point to reshape its capital market narrative and attract investor attention. Since the official launch of JD Food Delivery in February this year, this e-commerce giant has repeatedly become the focus of the industry. Its actions, such as paying full five social insurances and one housing fund for riders, rectifying "ghost food delivery," launching the innovative supply chain format Qixian Xiaochu, and emphasizing quality food delivery, have strengthened its image in the public opinion arena. Recently, Liu Qiangdong announced the launch of a standalone food delivery APP, which the market interprets as JD.com's desire to create an independent instant retail entry point, but whether it can become a second growth curve in the future remains to be seen. Overall, JD.com "gained" more in terms of brand recognition and business direction extension from this war, rather than significant growth in scale, profit, or market share. This war, with no clear winner, has brought enormous competitive and financial pressure to Alibaba, Meituan, and JD.com, but it is undeniable that the three participating giants have each received dividends at different levels, though their value trade-offs between "gain" and "loss" differ. What did the three giants pay? The high-intensity competition of the food delivery war, while each of Alibaba, Meituan, and JD.com gained something, came with financial costs far exceeding initial market expectations. This is concentrated in the Q2 and Q3 2025 financial reports of the three companies, which can be summarized as: revenue did not increase significantly in tandem, but profit margins generally came under pressure, and sales expenses collectively soared. Let's look at Alibaba first. Alibaba's Q3 revenue was 247.8 billion yuan, a year-on-year increase of 5%; excluding the impact of divested businesses such as Gaoxin Retail and Intime, core business growth was even 15%. Revenue performance was commendable, but profit margins showed a stark contrast: operating profit plummeted 85% year-on-year to 5.4 billion yuan, equivalent to a decrease of nearly 30 billion yuan; adjusted net profit also fell sharply by 72% to only 10.4 billion yuan. The core reason for the significant profit contraction is precisely the pressure from sustained high-intensity investment in the food delivery business. From a business structure perspective, it is currently divided into four major segments: China e-commerce, international e-commerce, cloud intelligence, and all others. The instant retail business composed of Taobao Flash Purchase and Ele.me is classified under the China e-commerce segment. China e-commerce business Q3 revenue was 132.6 billion yuan, a year-on-year increase of 17.8 billion yuan. Among this, instant retail business revenue was 22.9 billion yuan, an increase of 8.6 billion yuan from 14.3 billion yuan in the same period in 2024. For this 8.6 billion yuan revenue growth, Alibaba also paid a price: even with the Double 11 promotion driving e-commerce growth recovery, China e-commerce's adjusted EBITA still plummeted from 44.3 billion yuan in the same period last year to 10.5 billion yuan, a year-on-year drop of 76%, equivalent to a single-quarter decrease of 33.8 billion yuan in profit for the China commercial segment, with profit pressure far exceeding the boost from revenue growth. The surge in sales expenses caused by food delivery subsidies became the main drag on performance. Alibaba's Q2 sales and marketing expenses reached 53.2 billion yuan, mainly due to user subsidies and new user acquisition for Taobao Flash Purchase; in Q3, this expense surged 105% year-on-year to 66.5 billion yuan, a record high for a single quarter in recent years. The cumulative investment over the two quarters reached 119.7 billion yuan. Meituan's defensive costs were equally high. In Q3, Meituan's revenue was 95.5 billion yuan, a year-on-year increase of 2%. Adjusted net loss reached 16 billion yuan, compared to a net profit of 12.8 billion yuan in the same period last year, equivalent to a decrease of 28.8 billion yuan. The most noteworthy is the core local commerce business where food delivery resides. This quarter's revenue was 67.4 billion yuan, compared to 69.4 billion yuan in the same period last year, a year-on-year decrease of 1.9 billion yuan, marking the first negative growth for this business except during the pandemic. At the same time, its operating profit turned negative, with a loss of 14.1 billion yuan. Core local commerce consists of delivery services, commissions, online marketing services, other services, and sales. Among these, delivery services Q3 revenue was 23 billion yuan, a year-on-year decrease of 4.8 billion yuan, becoming the main source of profit drag. Sales expenses also rose sharply. In Q2, its sales and marketing expenses increased 52% year-on-year to 22.5 billion yuan; in Q3, as competition intensified, this expense surged 91% year-on-year to 34.3 billion yuan, accounting for a record high of 36% of revenue. The cumulative investment over the two quarters reached 56.8 billion yuan, also leading to losses. Finally, let's look at JD.com. JD.com was the first to rein in spending among the three, but it still paid a significant cost in Q3: revenue was 299.1 billion yuan, a year-on-year increase of 15%; adjusted net profit was 5.8 billion yuan, compared to 13.2 billion yuan in the same period last year, a decrease of 7.4 billion yuan. Specifically for the "new business" segment where food delivery resides, revenue was 15.6 billion yuan (Q3 2024: 5 billion yuan), operating costs were 16.6 billion yuan (Q3 2024: 3.8 billion yuan), and operating expenses were 14.9 billion yuan (Q3 2024: 1.8 billion yuan). Ultimately, this segment's operating loss was 15.7 billion yuan, compared to a loss of only 0.6 billion yuan in the same period last year, equivalent to an additional loss of 15.1 billion yuan. In terms of expense allocation, JD.com showed a pattern of "front-loaded spending, then contraction": in Q2, to quickly open the market, its marketing expenses surged 127% year-on-year to 27 billion yuan; in Q3, it adjusted its strategy, with marketing expenses decreasing 22% quarter-on-quarter to 21.1 billion yuan, and the year-on-year increase narrowed to 111%. The cumulative expenses over the two quarters reached 48.1 billion yuan. Compared to Alibaba and Meituan, JD.com's strategic shift towards "cost control and efficiency enhancement" is evident. Combining the financial reports of the three companies, over the two quarters, the cumulative market expenses of the three exceeded 220 billion yuan. This pattern of "increased revenue without increased profit" has led the industry to reflect on the sustainability of the money-burning model. Is the endgame of the food delivery war really here? With the release of Q3 reports, each company has begun to signal a "truce." Looking back at Alibaba's Q2 earnings call, Alibaba E-commerce Business Group CEO Jiang Fan had released signals of increasing investment, stating that they would not consider food delivery profitability alone, and combined with e-commerce comprehensive returns, while maintaining long-term price competitiveness, flash purchase could bring positive economic returns to the platform, and even proposed a goal of "flash purchase and instant retail contributing 1 trillion yuan in new transaction volume over the next 3 years." At that time, the posture of continuously increasing investment seemed to be a relentless pursuit of Meituan. Now, Alibaba's strategy has clearly shifted. At the Q3 earnings call, Alibaba Group CFO Xu Hong stated that with overall efficiency improvements and scale stabilization, overall investment in the flash purchase business will significantly contract next quarter. This statement was widely interpreted by the market as a signal of a temporary halt in the food delivery war. Meituan maintained its consistent stance, opposing food delivery price competition as low-quality, low-price "involution" competition. At the Q3 earnings call, Meituan CEO Wang Xing stated that the market results over the past six months have fully demonstrated that price competition in food delivery has not created value for the industry and is unsustainable. JD.com's exit signal appeared even earlier. As early as July, JD.com CEO Xu Ran stated: "Historically, no low-quality, low-price competition has ever brought long-term value to the industry. Although JD.com is one of the major platforms in the food delivery industry, it has not participated; we do not do things without long-term value." Subsequently, market attention gradually shifted from its food delivery business to topics like Qixian Xiaochu. From the statements of all parties, Alibaba's contraction of flash purchase investment, Meituan's denial of the sustainability of price wars, and JD.com's early reduction of subsidies all point to cooling competition. The ceasefire at this moment may not be accidental. On one hand, although subsidy wars can boost order volume in the short term, the overall competitive landscape has not undergone disruptive changes. According to JPMorgan's public data calculations in November, Meituan still dominates the food delivery sector with a 50% order volume share. Additionally, Wang Xing revealed at the earnings call that Meituan's orders with a unit price above 15 yuan account for over two-thirds of GTV, and orders above 30 yuan account for about 70%. Alibaba, through the integration of Taobao Flash Purchase and Ele.me, increased its order volume share to 42%, and although it briefly surpassed Meituan during the August order peak period, it did not shake the core landscape overall. JD.com captured about 8% market share, although it peaked at 11% at the end of Q2, it subsequently fell back as investment contracted. On the other hand, the marginal benefits of subsidies are declining. In Q2, Alibaba disclosed data on Taobao Flash Purchase's order volume, transaction user numbers, daily active rider scale, and its role in driving Taobao DAU growth; in Q3, it only used the textual description "instant retail drives rapid growth in Taobao MAU" and no longer disclosed core business data. Some industry insiders believe that this change in disclosure caliber may indicate that the marginal effects of investment are starting to decline, and subsidies no longer bring retention at the same scale. Additionally, the signals from the capital market are also clear, the story of "subsidies for growth" no longer has imagination. Once subsidies drag down profits, the market reaction immediately reflects in stock price fluctuations, forcing platforms to re-examine their growth paths. With these factors combined, the three giants chose to press the pause button at this moment. Cui Lili, deputy dean of the Digital Economy Research Institute at Shanghai University of Finance and Economics, told the author: "The food delivery war is tending to subside, and the market share landscape has basically settled, but whether it truly stops depends not only on market share, another aspect is the formation of user habits, which may require further observation. " That is, even if subsidies may pause, user migration has not fully stabilized, and the war situation still has variables. When discussing the future direction of the food delivery industry, Cui Lili stated that as the competitive landscape of the food delivery market stabilizes, the industry's competitive focus will gradually shift in two directions: one is the deep cultivation of non-food instant retail, and the other is the penetration of in-store scenarios for dining and offline services. She emphasized that food delivery is just the "starting track" for instant retail. When the market share competition in this area comes to an end, the core competitiveness of platforms will be more reflected in the operational capability of non-food orders and the penetration of in-store services. Especially in addition to Alibaba, Meituan, and JD.com, the entry of platforms like Xiaohongshu and Douyin will make the future market landscape more complex. Perhaps the first round of the food delivery war has temporarily concluded, but the next storm in instant retail will continue.