After reducing losses by 9.6 billion, Meituan turns to retail for growth.
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On June 1, Meituan released its first report card for 2026.
Q1 revenue reached 91 billion yuan, a year-on-year increase of 5.6%; operating loss was 6.5 billion yuan, narrowing by 9.6 billion yuan from the previous quarter’s 16.1 billion yuan; adjusted net loss was 4.968 billion yuan—both better than market expectations.
However, in the same period last year, Meituan still recorded an operating profit of 10.6 billion yuan. Compared to the loss reduction itself, the market is more concerned about: after the subsidy wave fades, what will Meituan rely on to resume growth.
Wang Xing stated at the performance meeting: "Order growth driven solely by subsidies is unsustainable."
From the signals released by this financial report, Meituan’s fiercest subsidy competition phase may be over, but profit rebuilding is far from complete. Meanwhile, a platform growth clue different from food delivery is gradually emerging.
Profit Recovery in Progress
From a financial perspective, the Q1 loss improved significantly.
Operating loss narrowed from last quarter’s 16.1 billion yuan to 6.5 billion yuan; adjusted net loss was 4.968 billion yuan—both better than market expectations.
However, if we look at a longer time frame, this report card is not easy.
In the same period last year, Meituan still posted an operating profit of 10.6 billion yuan. In Q1 this year, it turned to a 6.5 billion yuan loss—a profit gap of over 17 billion yuan.
At the same time, core local commerce revenue grew just 0.1% year-on-year to 64.1 billion yuan, nearly stalling.
Wang Xing is also quite cautious about the second half of the year.
"Considering last year’s high base, we expect year-on-year order growth may slow down in H2, and a year-on-year decline is not out of the question."
However, he also emphasized that the platform is seeing a healthier order structure.
"Consumers are increasingly willing to pay premium for higher quality goods and services, so the growth resilience of the platform’s gross transaction value will outperform order growth."
This means Meituan is trying to shift from pursuing order volume growth to pursuing transaction quality growth.
A long-term instant retail industry consultant told Wallstreetcn that as industry subsidy competition gradually returns to rationality, competition is returning to operating efficiency and user experience.
For Meituan, narrowing losses looks more like stopping the bleeding than the finish line.
Whether the Unit Economics (UE) can continue to improve still depends on multiple variables such as the competitive environment, delivery costs, and industry regulation.
Retail Takes Over
Compared to loss reduction, what’s more noteworthy is the change in revenue structure.
This Q1, Meituan updated its revenue reporting method, listing merchandise sales revenue separately from new businesses.
The financial report shows that merchandise sales revenue in core local commerce increased 96% year-on-year to 2.983 billion yuan, while delivery service revenue fell 6.5% year-on-year.
This change means Meituan is extending from a single platform-matching model to a model of platform + self-operated retail running in parallel.
Among these, Xiaoxiang Supermarket has become one of the most important growth engines.
As of Q1, Xiaoxiang Supermarket has covered 55 cities, with over 2,000 front warehouses, about 60% of which are profitable. Merchandise sales revenue rose 40.7% year-on-year to 18 billion yuan, making it one of the fastest-growing internal revenue sources.
At the same time, after shutting down Meituan Youxuan, new business revenue rose 21.3% year-on-year to 27 billion yuan, while operating loss narrowed from 4.6 billion to 2.1 billion yuan, and operating profit margin improved to -7.8%.
Compared to past expansion relying on scale through subsidies, the new businesses are entering a stage that emphasizes operating efficiency more.
However, Meituan remains restrained regarding profit expectations for retail business.
Wang Xing previously stated: "I have never expected the grocery business to be a highly profitable business."
This means the value of Xiaoxiang Supermarket is not in replicating the high profit margin of food delivery, but in helping Meituan build a deeper supply chain capability and more diversified income sources.
The overseas market has also seen strategic changes.
The financial report shows Keeta’s operational efficiency in Hong Kong and Saudi Arabia continues to improve, while growth is maintained in other Middle Eastern regions and in Brazil.
However, the expansion process has not been entirely smooth.
Recent market news shows Keeta has delayed entry into Rio de Janeiro and has reduced parts of its local team. Many restaurants in Brazil have exclusive agreements with competitors, raising the barrier for new entrants.
Facing market expectations for its overseas business, Wang Xing explicitly said: "This year we will prioritize operational optimization, not expanding into new markets."
Compared to previous rapid expansion, Meituan’s overseas business has started to shift towards efficiency first.
AI Remains a Long-term Investment
Besides retail and overseas, Meituan continues to ramp up AI investment.
Q1 R&D expenses reached 7 billion yuan, up 22% year-on-year.
Currently, Meituan has placed its AI assistant "Xiaotuan" at the core entrance of the app. Wang Xing said that Xiaotuan can already handle complex demands across different scenarios, such as recommending restaurants and services based on user conditions.
Meanwhile, Meituan's AI assistant "Xiaomei" will soon launch a collaboration with Tencent’s Yuanbao. In the future, users can access local life services like food delivery directly in Yuanbao.
At the model layer, in April Meituan opened testing of LongCat-2.0-Preview, with total parameters exceeding one trillion.
However, at the current stage, AI’s direct contribution to revenue and profit is still limited.
For Meituan, AI is more of a long-term infrastructure investment than a short-term profit source.
Based on the Q1 financial report, Meituan’s most dangerous period may be over, but what truly determines the next stage of growth potential is no longer just the delivery business itself.
Whether the retail business can continue to expand, whether overseas markets can control losses, and whether AI investment can ultimately translate into operational efficiency—answers to these questions will determine Meituan’s growth story in the coming years.
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