Hong Kong Media Sparks Debate Over Meituan’s Milk Tea Battle Loss — Wang Xing Pushes Back Against Low-Quality Competition, Keeta Hong Kong Turns Profitable

An article published by Alibaba-owned Hong Kong media outlet South China Morning Post on the Meituan–Alibaba delivery war has stirred heated debate.

The SCMP reported that Chinese delivery giant Meituan experienced a large quarterly loss, citing fierce competition from Alibaba’s instant-commerce platforms as the key factor eroding profit margins and slowing revenue growth.

The Beijing-based firm announced Friday that revenue for the three months ending in September reached RMB 95.5 billion (USD 13.3 billion), a 2% increase year-over-year but falling short of analysts’ RMB 97.5 billion expectations.

However, Meituan posted an operating loss of RMB 19.8 billion, a dramatic reversal from an operating profit of RMB 13.7 billion during the same period last year. Net loss hit RMB 18.6 billion, compared to a net profit of RMB 12.9 billion in the previous year — and well above the expected RMB 14.8 billion loss.

This downturn occurred after Meituan — a dominant force in on-demand delivery — engaged in a brutal price war with Alibaba, aggressively subsidizing milk tea and lunch boxes to lure consumers.

During the same quarter, net income attributable to Alibaba’s common shareholders dropped 52%, from RMB 43.9 billion to RMB 21 billion.

It is worth noting — as the original Blue Hole commentary emphasized — that the media covering this story is tied to Alibaba’s interests. Alibaba acquired the South China Morning Post in December 2015, along with related publishing and digital media assets, while publicly committing not to interfere with editorial independence.

The original SCMP headline was strikingly direct: it framed Meituan as “losing the Hong Kong milk tea war” against Alibaba. Yet the reality is that Alibaba’s delivery battle also resulted in enormous cash burn and heavy losses.

Alibaba’s operating profits plunged 85% this quarter to RMB 5.4 billion — nearly RMB 30 billion less year-over-year — while adjusted net profit sank 72% to RMB 10.4 billion.

The main culprit? The colossal cost of flash-delivery and similar operational models.

So, who actually lost this war? Realistically, both sides took damage — a classic “mutual-destruction” scenario.

Reuters recently noted that Alibaba is engaged in price wars on two simultaneous fronts, a strategy that could prove extremely costly. The report added that Alibaba’s ecommerce cash flow is increasingly funneled into CEO Wu Yongming’s AI initiatives — meaning Alibaba must relentlessly defend its ecommerce dominance. And history shows that fighting on two fronts rarely ends well.

To its credit, SCMP did disclose its relationship with Alibaba, aligning with transparency standards, though the acknowledgment still carried a faint sense of “the disclaimer makes it more obvious.”

But regardless of affiliations, a media outlet is unquestionably entitled to express its perspective.

Turning to Meituan’s CEO, Wang Xing, his messaging during the earnings call was firm and unapologetic.

Wang emphasized that Meituan stands by its position stated over the past two quarters: the delivery price war is a form of “low-quality, low-value internal competition” that Meituan strongly opposes. He asserted that half a year of results prove that the price war created no real value for the industry and is fundamentally unsustainable.

He stated Meituan’s confidence in defending its leadership in instant retail and in building meaningful long-term value.

Wang highlighted that Meituan’s market share in food-delivery orders has begun to steadily recover. Meituan continues to dominate within the mid-to-premium order segment: for orders exceeding RMB 15 in payment, Meituan holds more than two-thirds of the market, and for orders above RMB 30, more than 70%.

While Meituan battled stagnation domestically, its international expansion has delivered positive news.

Wang revealed that Keeta — Meituan’s Hong Kong delivery business — has strengthened its leading market position and achieved profitability in October.

With a customer-first philosophy and strong operational expertise, Keeta’s unit-economics performance recorded a strong quarter-over-quarter improvement. Wang further noted that Keeta achieved profitability just 29 months after launch, beating its “profitability within 3 years” target.

Keeta, first introduced in Hong Kong in May 2023 as Meituan’s international delivery brand, has rapidly expanded and is now operating in markets including Hong Kong, Saudi Arabia, Qatar, Kuwait, UAE, and Brazil.

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