Meituan Conference Call: Will make necessary investments to maintain leadership, but will not participate in price wars.

At Meituan’s Q3 earnings call on the evening of the 28th, it was mentioned that although industry losses appear to have peaked, the food delivery business will remain under pressure in the fourth quarter. The company will make necessary investments to maintain its leading position, but will not engage in price wars. Instead, resources will be dynamically adjusted based on the competitive landscape, with continuous enhancement of service experience and operational efficiency advantages.

Q&A Session (AI-assisted translation):

Q1:

Could management comment on the latest changes in the competitive landscape of the food delivery industry, especially after entering the fourth quarter? Have you observed a contraction in industry subsidies? We notice competitors increasing their investment in membership programs like 88VIP. What are the trends in Meituan’s core user retention and engagement? Finally, from a financial perspective, what are management’s expectations for the food delivery business in the fourth quarter? Has there been any change in outlook for long-term growth and profitability?

Answer:

Before responding specifically, please allow me to reiterate the core positions we have made clear over the past two quarters: First, food delivery price wars are fundamentally a form of low-quality, low-level vicious competition that we firmly oppose. The past six months have shown that such competition cannot create real value for the industry and is unsustainable. Second, we continue to strengthen the protection of delivery riders’ rights and support small and medium-sized merchants—this is the only way to ensure the healthy development of the industry. Third, we will focus on doing the right things for consumers, merchants, and riders, and are confident in defending our leadership position in instant delivery.

Industry subsidies in October and November have retreated from their summer peak, especially after the Double 11 promotion period. We continue to closely monitor market dynamics and adjust our strategies accordingly. Recently, our market share and order volume have rebounded, and we maintain a leading position in mid-to-high basket size orders—orders with a per-ticket value above 15 yuan account for more than two-thirds of our GTV, and those above 30 yuan account for about 70%. Our average net basket size remains significantly higher than other platforms.

Core users maintain a high retention rate, with consumption frequency and stickiness steadily improving. This reflects our strong user mindshare and service strengths in the food delivery scenario. Although users typically install multiple local service apps, Meituan remains the first-choice platform for hundreds of millions of consumers. Our core users’ consumption frequency is several times the average; even amid intense competition, Meituan maintains strong brand awareness and loyalty. High-frequency, high-basket users care more about delivery experience, supply quality, and service reliability, rather than just low prices.

We continue to enhance the experience for core users through faster, more reliable delivery (especially during extreme weather and holidays), diversified offerings across all price ranges, and exclusive benefits provided by the Meituan membership program. We believe investing in high-end user groups will expand our addressable market, and we will leverage our service quality advantages to further increase our influence among quality users.

Regarding financial performance: While we believe losses have peaked, the food delivery business will remain under pressure in the fourth quarter. We will make necessary investments to maintain our leadership position, but will not participate in price wars. Instead, we will dynamically adjust our resources based on the competitive landscape and continuously strengthen our advantages in service experience and operational efficiency.

In the medium to long term, industry competition will continue to evolve dynamically. Business model evolution typically follows a clear path: from capital-driven, to efficiency-driven, and finally to innovation-driven. China’s food delivery industry has entered a phase of service upgrade and technological innovation, and expansion driven solely by subsidies is unsustainable. We believe that current irrational competition will eventually transition to a rational and mature stage, and companies with industry insight, excellent operations, and high-quality growth capabilities will become industry leaders.

As stated at the previous earnings call, Meituan will focus on doing the right things: expanding quality supply, ensuring fast and reliable delivery, and maintaining price affordability. While defending our market position, we will also create greater value for the entire industry. Food delivery is becoming a highly certain lifestyle for more and more consumers, with a clear long-term growth outlook. Our target of reaching 100 million high-quality orders per day remains unchanged, and with our proven operational efficiency advantages, we are confident in maintaining industry-leading unit economics. In the long run, food delivery profits will return to reasonable levels in a dynamic market.

Updating......

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