Q2 China Food Delivery War Wraps: Alibaba Wins, JD.com Struggles, Meituan Hit Most

TradingKey - After Alibaba released its Q1 FY2026 earnings, the second-quarter financial results for the three main players in China’s food delivery war — Meituan, JD.com, and Alibaba — are now all public.

In terms of market share and financial performance in food delivery-related businesses, the outcome of the battle is clear:

• Alibaba gained market share with minimal financial damage
• JD.com spent billions to capture a 10% share
• Meituan lost its dominance and suffered heavy financial losses

Alibaba’s Q1 FY2026 report, released on August 29 for the quarter ended June 2025, showed that its “China E-commerce Group” — which includes Taobao Instant Delivery (formerly Ele.me) — reported revenue of RMB 140.072 billion, up 10% YoY, while adjusted EBITA fell 21% YoY to RMB 38.389 billion.

JD.com’s “New Businesses” — which includes JD Food Delivery — saw revenue surge 198.8% YoY to RMB 13.852 billion, but operating losses ballooned from RMB 695 million to RMB 14.777 billion.

Meituan’s “Core Local Commerce business” — including food delivery — reported revenue of RMB 65.347 billion, up 7.7% YoY, but operating profit plunged 75.6% to RMB 3.721 billion.

Since none of the three companies report food delivery as a standalone segment, these financial comparisons are only approximate.

• Alibaba’s “China Commerce” includes Taobao, Tmall, and other e-commerce operations
• JD.com’s “New Businesses” includes logistics, real estate, and international expansion
• Meituan’s “Core Local Commerce” includes in-store dining and travel

Since JD.com launched its food delivery service in February and began a “$1 billion subsidy” campaign in April, the competitive landscape has shifted dramatically. Concerned about chaotic low-price competition, Chinese regulators summoned the platforms in May and July. All three platforms recently pledged to “resist internal overcompetition” in early August.

In terms of market share, data shows JD.com rapidly captured market share from zero in Q2, reaching over 17% by early May, while Meituan’s share dropped from 70% at the start of the year to 54%, and Alibaba’s Ele.me dipped slightly from 30% to 28%.

After Alibaba integrated Ele.me’s delivery service into the Taobao app and launched Taobao Flash Buy, Ele.me’s market share rose steadily in Q2. By early August, Ele.me reached 44.5%, slightly ahead of Meituan’s 44.1%, while JD.com fell back to 11.4%.

Thus, among the three giants in Q2:

• Alibaba emerged as the biggest winner, gaining the most market share with the smallest profit decline
• Meituan lost its absolute dominance and saw operating profit slashed
• JD.com, despite massive spending, secured a foothold — stabilizing its share around 10%

However, according to a UBS report, Meituan still held a dominant 74% share in Q2 (down from 85%), Ele.me rose from 11–13% to 28%, and JD.com dropped from 13% to 7%. 

While data sources differ, the overall trend is consistent: Meituan’s leadership is weakening, Ele.me is expanding rapidly, and JD.com’s momentum has slightly cooled.

Meituan’s management warned of a significant loss in core local commerce in Q3. In response, Citi downgraded Meituan’s stock from Buy to Neutral, citing caution over how long it will take the company to restore profitability.

Unlike Meituan, where food delivery is the core business, Alibaba has diversified revenue streams — including e-commerce and AI cloud — with strong growth prospects. 

Additionally, as The Wall Street Journal reported, Alibaba is designing a new chip to fill the gap left by Nvidia in the Chinese market.