Did the food delivery war hurt Meituan?

Meituan’s stock price fell again! Q2 profit plummeted 89%, core business was under pressure, and investors were panicking!

My friends, Meituan’s stock price can’t hold up! On August 27, 2025, Meituan just released its second quarter 2025 financial report, with revenue of 91.84 billion yuan, a year-on-year increase of 11.7%. It looks okay, right? But here comes the key point - adjusted profit plummeted 89%! As soon as this news came out, the market went crazy, the stock price suffered, and investors were disappointed [[3]()].

The performance seems okay, why doesn’t the stock price buy it?
The core business is no longer "attractive", and profits have been gnawed away.
Speaking of Meituan’s core business - the core local business sector, it has long shown signs of fatigue. Take food delivery as an example. The order volume in 2024 will be high, with a daily peak of 98 million orders, but the growth rate of delivery service revenue will drop from 25% to 19.5%, and the growth rate of commission income will drop from 27.6% to 23.9% [[1]()]. The cake has not grown much, but there are more people sharing it. JD.com has entered the market. Once the competition becomes fierce, the profit will be diluted.

The in-store hotel and travel business is not doing well either. The order volume in 2024 will increase by 65%, but the monetization rate is only 7%, far lower than the 13%-15% of the food delivery business [[1]()]. It is like selling a lot of goods but making little money. You have been working hard for the platform for a long time.

The cost of riders is like a mountain, which is putting pressure on Meituan.

The riders are even more troublesome. To protect the rights of riders, Meituan will expand its social security pilot program from seven provinces and cities to 17 provinces by 2025, and is expected to cover 30% of full-time riders. This is no small amount of money. The annualized cost is expected to increase by 2.8 billion yuan. If it is fully implemented, it will reach 12 billion yuan, equivalent to 23% of the core local business profit in 2024 [[1]()]! If the cost goes up, the profit will definitely fall.

New businesses are constantly "burning money", and overseas expansion is also a pitfall

New businesses continue to lose money, and there is no sign of profitability

Meituan has been tossing around in new businesses in recent years, but it has spent a lot of money and has not seen any returns. In the overseas market, take the Keeta business in Saudi Arabia as an example. Although it has expanded to major cities, has a rider team of about 15,000 people, and has a rating higher than local platforms, the large-scale discounts used to attract new customers in the early stages of the startup period have huge operating costs. In 2024, the overseas business will lose about 1.2 billion yuan [[1]()]. This overseas expansion looks exciting, but it is actually a money-burning hole. It is still uncertain when it will become profitable.

A lot of technology has been invested, but commercialization has "fallen behind"
Wang Xing has always said that AI is a matter of survival. Meituan also spent 21.1 billion yuan on R&D in 2024, but the commercialization process of things like drone delivery and AI technology has lagged behind, and their contribution to cost reduction and efficiency improvement has not yet been shown on a large scale [[1]()]. How can investors not be anxious if they have invested money but have not seen any real benefits?

Market expectations are too high, and no matter how good the performance is, it is difficult to satisfy
In fact, this is not the first time that Meituan has "run into trouble" because of its financial report. In the third quarter of 2024, Meituan's revenue and net profit exceeded expectations, but the stock price still fell by 3.73% [[2]()]. Why? Because investors' expectations are too high, and simply meeting or slightly exceeding expectations will not satisfy them at all. Now that profits have plummeted by 89%, the stock price reaction is naturally even more intense.

In short, Meituan is currently facing internal and external challenges: sluggish growth in its core business, immense cost pressures, and a lack of new business opportunities. The falling stock price is a wake-up call from the market. It remains to be seen whether Meituan can withstand the pressure and thoroughly sort out these issues. Investors concerned about risk can consider diversifying their investments through index-based instruments like the China Concept Internet ETF, rather than putting all their eggs in one basket.