Meituan posts third straight quarterly loss as ByteDance rivalry bites
Synopsis
Meituan's Q1 2026 adjusted net loss narrowed sharply to 4.97 billion yuan from 15 billion yuan, but ByteDance's aggressive Douyin push into China's 35.3 trillion yuan local services market signals the profitability battle is far from over.
Key Takeaways
Meituan posted an adjusted net loss of 4.97 billion yuan in Q1 2026 , its third consecutive quarterly loss.
Revenue rose 5.6 per cent year on year to 91 billion yuan (US$13.45 billion) in the three months ended March 2026 .
The loss narrowed significantly from 15 billion yuan in the previous quarter, aided by lower food delivery subsidies.
ByteDance has been expanding Douyin into local services since late 2025 , directly threatening Meituan 's in-store business.
China 's local services market was estimated by iiMedia to have reached 35.3 trillion yuan in value in 2025 .
Citic Securities flagged that competition in the in-store services sector is likely to remain heated.
Meituan, China's dominant food and on-demand delivery platform, reported its third consecutive quarterly loss on Monday, 1 June 2026, as intensifying competition across the local services sector continues to compress margins even as pressure in core food delivery shows early signs of easing.
Revenue grows, losses narrow
Meituan's revenue for the three months ended March 2026 rose 5.6 per cent year on year to 91 billion yuan (approximately US$13.45 billion), according to the company's earnings release. The adjusted net loss came in at 4.97 billion yuan for the quarter — a meaningful improvement from the 15 billion yuan loss recorded in the preceding quarter.
The company attributed the narrower loss partly to reduced spending on food delivery subsidies and improved operating efficiency across its logistics network.
Why it matters
While the food delivery battleground appears to be cooling, Meituan faces a fresh front: its in-store services business is under mounting pressure, according to a research note published last month by Citic Securities. That segment — covering restaurant bookings, hotel stays, and leisure activities — is now squarely in the crosshairs of ByteDance, the parent company of TikTok.
ByteDance has been aggressively expanding its short-video app Douyin into a hub for local services since late 2025, targeting a market that consultancy iiMedia estimated reached 35.3 trillion yuan in value last year.
The competitive backdrop
The local services sector in China has become one of the most fiercely contested arenas in consumer technology. ByteDance's renewed push leverages Douyin's massive user base and algorithmic content discovery to funnel consumers toward in-store bookings and deals — a direct challenge to Meituan's long-held dominance in offline commerce.
Citic Securities noted that competition in the in-store segment is likely to remain heated, suggesting margin recovery in this division could be prolonged. Meituan's food delivery subsidies may be declining, but the cost of defending its broader local services turf remains substantial.
What's next
Investors and analysts will be watching whether Meituan can translate its efficiency gains in food delivery into a sustainable path back to profitability, while simultaneously holding off ByteDance's encroachment in in-store services. The company's ability to monetise its vast delivery infrastructure beyond food — spanning groceries, pharmaceuticals, and consumer goods — may prove critical to restoring positive earnings.
With ByteDance showing no signs of retreating from local services and the 35.3 trillion yuan market still largely up for grabs, the next two quarters will be a defining test of Meituan's strategic resilience.
Point of View
But the real story is a structural shift in how China's local services economy is being distributed — away from dedicated super-apps toward algorithmically-driven content platforms like Douyin. ByteDance's playbook of embedding commerce inside entertainment mirrors what Alibaba and Tencent attempted in earlier cycles, but with a far more potent content moat. What mainstream coverage underweights is the subsidy war's second act: food delivery costs may be falling, but winning in-store services requires a different kind of spend — content creation tools, merchant incentives, and local salesforces — where ByteDance holds structural advantages. Meituan's path to profitability now depends less on operational efficiency and more on whether it can build a content-driven discovery layer before Douyin locks in merchant relationships at scale.
NationPress
18 Jul 2026
Frequently Asked Questions
Why did Meituan report a loss in Q1 2026?
Meituan reported an adjusted net loss of 4.97 billion yuan in Q1 2026 primarily due to ongoing competitive pressure across its local services business, even as food delivery subsidy costs declined. The company has now posted losses for three consecutive quarters as it invests to defend market share against rivals including ByteDance .
How does Meituan's Q1 2026 loss compare to the previous quarter?
Meituan 's Q1 2026 adjusted net loss of 4.97 billion yuan was significantly narrower than the 15 billion yuan loss in the preceding quarter. The improvement was attributed to reduced food delivery subsidies and better operating efficiency.
How is ByteDance competing with Meituan in local services?
ByteDance has been expanding its short-video app Douyin into a hub for local services — including restaurant bookings, hotel stays, and leisure deals — since late 2025 . The strategy targets a market iiMedia estimated at 35.3 trillion yuan , directly challenging Meituan 's core in-store business.
What did Citic Securities say about Meituan's outlook?
Citic Securities said in a research note published last month that competition in Meituan 's in-store services segment is likely to remain heated, particularly following ByteDance 's renewed push. The brokerage flagged this as a growing challenge even as food delivery rivalry shows signs of easing.
What is the size of China's local services market?
China 's local services market reached an estimated 35.3 trillion yuan in value last year, according to consultancy iiMedia . The market covers a broad range of offline consumer activities including dining, entertainment, travel, and retail, making it one of the largest battlegrounds in Chinese consumer technology.
