2025 is going to be a big year for Meituan, according to CEO Wang Xing, who was speaking during a conference call on March 21—and the reasons are piling up.
Externally, Meituan’s turf hasn’t been rocked by fresh, aggressive challengers. Internally, though, the company has been through a restructuring stretch that’s hard to ignore. The centerpiece: a merger of its at-home and in-store business units. And as the company’s global ambitions take root in Hong Kong and the Middle East, early signs point to real traction.
So, how did Meituan perform in the final quarter of 2024?
Revenue hit RMB 88.5 billion (USD 12.4 billion), a 20.1% year-on-year (YoY) increase. Both the core local commerce segment and its newer bets posted double-digit growth. Operating profit margin climbed to 7.6%, up from 2.4% a year earlier, yielding RMB 6.7 billion (USD 940 million) in operating profit.
The numbers were solid and largely met expectations. But one data point went missing: the YoY growth rate for Meituan’s on-demand delivery order volume. Its absence hasn’t gone unnoticed, raising questions about whether the food delivery engine is starting to sputter. Meanwhile, quick commerce unit Meituan Shangou and Xiaoxiang Supermarket are still expanding, but the in-store segment remains locked in a drawn-out fight.
That mix of familiar trends and shifting priorities is shaping Meituan’s next phase. Two narratives now dominate the conversation: its overseas expansion, and a fast-building commitment to artificial intelligence.
On the international front, investment is clearly ramping up. While losses in the new initiatives category narrowed, the pace slowed—and operating losses nearly doubled compared to the previous quarter. The culprit? A heavier push overseas. This didn’t blindside investors—management had telegraphed the move.
AI, though, has introduced an entirely different tempo. Wang described the company’s early-stage strategy as “offense, not defense.”
“When something this fundamentally transformative comes along, the only meaningful strategy is to not try defending the old ways,” Wang said.
Internally, Meituan has gone headfirst into AI since the start of the year. Wang was spotted liking a 2 a.m. company intranet post that talked about the “phased extinction” of internet firms under AI pressure. “Wang is definitely paying close attention to AI,” a Meituan staffer told 36Kr.
In its earnings report, the company characterized Q4 2024 delivery growth as “steady,” while calling its in-store services growth “impressive.”
But those descriptors only scratch the surface. The deeper transformation came from fusing the at-home and in-store divisions. Delivery staff were reassigned to support in-store operations, and the “God membership” program—once limited to food delivery—was extended to brick-and-mortar merchants. This integration funneled more traffic in-store, pushing in-store order volumes up over 65% YoY. Both annual transacting users and active merchants hit all-time highs. Wang credited the membership program with funneling high-value delivery users to offline merchants.
The program’s impact extended to Meituan’s bottom line. Commission revenue jumped 23.88% YoY in Q4, buoyed mainly by in-store transactions. That lift also helped buffer a dip in average order value. Meanwhile, delivery service revenue grew 19.46% YoY, partly thanks to a national rollout of the membership benefits. That expansion reduced the need for user subsidies—categorized as a cost—within the delivery revenue line.
Still, competition on the in-store front hasn’t let up. Much of the battle now revolves around advertising budgets, especially in the company’s rivalry with Douyin. One way to measure that fight is by comparing growth in Meituan’s commission income versus ad revenue.
In Q4, commission revenue rose 23.88%, outpacing advertising revenue, which increased by 17.74%. While advertisers tightening their budgets may be a factor, the continued outperformance of commissions suggests that ad placements are becoming a tougher sell.
As for the at-home side of the business, one insider put it plainly:
“The food delivery business has pretty much plateaued. Most of the resources are now being directed toward the in-store business.”
Meituan still holds a commanding share of over 70% in the food delivery market, and that lead won’t be easy to shake. But growth now hinges more on supply-side tweaks. Two newer offerings—Pinhaofan and Shenqiangshou—have become regular talking points in earnings calls. Pinhaofan, which aggregates group orders to drive down meal costs, now makes up around 10% of food delivery orders. “In 2024, Pinhaofan hit record order volumes and became a win-win model for both merchants and users,” the company said.
Still, the segment’s growth isn’t bouncing back. CFO Chen Shaohui said that both food and non-food delivery volumes saw only weak growth from Q3. In Q4, Meituan’s on-demand delivery volume rose 14.5% YoY.
“Pinhaofan is stabilizing. The focus now is on improving merchant offerings. Shenqiangshou is still in early testing, from coupons to livestreaming and product vouchers, but it hasn’t gained the traction we hoped for,” said an insider close to Meituan’s delivery team.
Shangou, in contrast, remains a bright spot. During the earnings call, Wang said that while food delivery growth has slowed—partly due to a high base effect—Shangou “remains strong and is growing much faster than food delivery.” That momentum appears to be driven by broader reach in lower-tier cities and increased participation from major brands.
Goldman Sachs reported that Shangou became profitable by Q3 2024. As Meituan moves toward delivering everything beyond meals, Shangou is shaping up to be a cornerstone of its future.
Food delivery may be leveling out, but Shangou is still climbing—and together, they form the backbone of Meituan’s at-home strategy. “We’re sticking to our goal of over 100 million daily orders for on-demand delivery,” Wang said.
The same pattern of resource reallocation is playing out in Meituan’s new initiatives. Meituan Youxuan, once the company’s biggest cash sink, has turned a corner. After multiple waves of warehouse closures, group purges, regional consolidations, and product overhauls, the grocery platform is now using its Guangdong playbook to reshape itself.
In Q4, operating losses from new initiatives dropped to RMB 7.3 billion (USD 1 billion), down from RMB 20.2 billion (USD 2.8 billion) a year earlier. The loss margin improved by 20.6 percentage points.
“Each of our new initiatives is in a different stage and needs different levels of support,” said Wang. Meituan hasn’t abandoned Youxuan, either. It remains a pillar of the company’s grocery ambitions, with the team focusing on key regions, moving away from white-label goods, and trying to raise product quality while keeping prices low—a strategy meant to carve out a different identity from competitors like Duoduo Maicai.
Still, the idea of simply “losing less money” no longer captures attention. Meituan’s international expansion is what’s now turning heads—and drawing scrutiny.
Keeta, its overseas delivery brand, is already reshaping the Hong Kong market. Deliveroo, one of the city’s three major food delivery apps, recently announced it will exit on April 7. The move comes after Keeta stormed to the top of the market within a year by focusing on office zones and rolling out steep subsidies.
Keeta officially entered Saudi Arabia in Q4 and now operates in all major cities across the country. A Morgan Stanley report says it has already grabbed about 10% of the market.
One Riyadh-based user noted food delivery has become “a lot better” since Keeta arrived. From launch, Keeta offered not only discounts but also compensation guarantees pegged to delivery time—applying pressure on incumbents like HungerStation and Jahez to step up their own promotions.
Beyond Saudi Arabia, the terrain gets trickier. In the UAE, Kuwait, and Qatar, platforms like Talabat hold more than 50%—and in some places, over 70%—of the market.
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While food delivery leads Meituan’s international agenda, it’s not the only export. Shangou and Xiaoxiang Supermarket are also testing overseas waters, though in smaller roles for now. Wang reiterated that food delivery will remain the focus abroad, at least for the near term.
If global expansion is driven by opportunity, the AI race comes with a tinge of existential urgency.
Multiple insiders described Meituan’s current approach to AI as “all in.” Teams are running internal pilots, launching open days, forming discussion groups, and racing to adapt. On the earnings call, Wang outlined Meituan’s AI playbook for the first time:
- Embed AI into everyday workflows and operations.
- Build AI-native products—not just AI-enhanced tools, but services built from scratch.
- Develop an in-house large language model.
That model, dubbed “LongCat,” is already running across Meituan’s ecosystem.
Signs of AI are cropping up everywhere. Shenqiangshou now bears a label noting it uses the DeepSeek-R1 model to curate food delivery choices. Food listings show AI-generated tags describing portion sizes, flavors, and more.
“Every team is doing something—whether it’s user engagement, AI-generated summaries, or recommendation logic,” a Meituan staffer said. “But most of it hasn’t had a real impact yet. We’re doing it to stay relevant.”
Wang summed up the mood:
“We’re both excited and scared by what we see happening right now.”
For a company that rose with the mobile internet era, keeping up with the AI wave—and staying in the room where the next wave of decisions is being made—may be its toughest challenge yet.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.