Meituan Plots AI Moat, Buys Dingdong Retail for $717M

New Businesses Drive 18.9% Growth as Meituan Rejects Price Wars

Meituan is actively pivoting from the intense price competition that has defined China's tech landscape, a strategy CEO Wang Xing termed as opposing "involution." In its fourth-quarter 2025 earnings report, the company posted total revenues of 92.1 billion yuan, a modest 4.1% year-over-year increase. However, its new initiatives, which include the international KeeTa brand and retail operations, saw revenues climb 18.9% to 27.3 billion yuan. Management emphasized a strategic shift away from subsidizing low-quality, low-price orders to focus on sustainable, high-quality growth. This change is already showing results, with the operating loss for its core local commerce segment narrowing significantly quarter-over-quarter.

We resolutely oppose involution. We will actively cooperate with the regulatory investigation.

— Wang Xing, Chairman and CEO.

This strategic pivot comes as regulators scrutinize the food delivery market's competitive practices. Wang expressed confidence that this focus on quality will lead to a "more meaningful quarter-over-quarter improvement" in per-order losses for its food delivery business in the first quarter of 2026. The company ended 2025 with a formidable cash position of 166.8 billion yuan, providing substantial resources to fund its strategic initiatives.

Meituan to Acquire Dingdong Retail for $717M to Fortify Commerce

In a major move to bolster its position in the instant retail market, Meituan confirmed its plan to acquire Dingdong's mainland China retail business for $717 million. The deal, which is pending regulatory approval, is expected to significantly strengthen Meituan's supply chain capabilities and expand its service coverage, particularly in the highly competitive East China region. Wang Xing framed the acquisition as a clear signal of the company's confidence in the Chinese retail market and a key step in enhancing its overall capabilities in the fast-growing instant commerce sector.

Beyond acquisitions, Meituan is leveraging artificial intelligence to create a durable competitive moat. The company is embedding its AI assistant, "Xiao Guan," across its platform to answer complex, natural-language user queries that generic AI cannot handle. By combining its vast, proprietary data on points of interest, real-time traffic, and user reviews, Meituan aims to transform its app into an indispensable local service AI agent, moving beyond simple keyword searches to provide deeply integrated and personalized recommendations.

KeeTa Eyes Saudi Profitability by End of 2026

Meituan's international food delivery arm, KeeTa, is accelerating its global expansion and demonstrating a clear path to profitability. After entering the Hong Kong market in May 2023, KeeTa achieved its first profitable month in October 2025, taking 29 months to reach the milestone. The company now projects a much faster timeline in the Middle East, forecasting that its Saudi Arabian operations will become profitable before the end of 2026.

In the second half of 2025, KeeTa expanded its footprint into Qatar, Kuwait, the UAE, and Brazil, focusing initially on São Paulo. Despite the significant upfront investment required for this expansion, management reassured investors that overall losses for the new business segment in 2026 are not expected to exceed 2025 levels, thanks to efficiency improvements in its domestic operations.