China’s leading online-to-offline services company said it expects to report a loss of up to 24.3 billion yuan for 2025, translating to a fourth-quarter loss of about 15.7 billion yuan
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Key Takeaways:
- Meituan lost more than $2 billion in the fourth quarter, though the figure represented an improvement from its $2.7 billion third-quarter loss
- China’s market regulator called in Meituan, Alibaba and JD.com for a meeting last week to try and tamp down their overheated competition in the emerging instant commerce field
There’s not much positive you can say about a 15.7 billion yuan ($2.3 billion) loss, which is roughly what online-to-offline (O2O) services leader Meituan (OTC:MPNGY) (OTC:MPNGF) (3690.HK) recorded in the fourth quarter, based on a profit warning issued by the company last Friday. The only slight positive we can see is that the latest loss represents a slight improvement over the third quarter, when the company lost an even larger 18.6 billion yuan.
That means perhaps the bad times at Meituan have bottomed out, as the company remains locked in a turf war in China’s emerging instant commerce sector with e-commerce juggernauts Alibaba (NYSE:BABA) (9988.HK) and JD.com (NASDAQ:JD) (9618.HK). That war has lasted nearly a year, kicked off when Alibaba and JD.com both made nearly simultaneous new moves into the space last spring.
China’s market regulator has stepped in repeatedly to try and ease the competition, which has seen all three companies spend billions of dollars on subsidies for both consumers and retailers and restaurants to try and get them to do more business on their platforms. Signals coming from some of those merchants last fall seemed to indicate that Alibaba, JD.com and Meituan were indeed scaling back their cutthroat ways, perhaps explaining the slight improvement on Meituan’s bottom line in the fourth quarter.
But lest anyone think the war has ended, the State Administration for Market Regulation (SAMR) called in six major internet companies just last week for yet another round of knuckle-rapping over excessive competition, according to numerous media reports. In addition to Meituan, Alibaba and JD.com, others called in for the latest dressing-down included Tencent, Baidu and …