Meituan acquires Dingdong Maicai

As the Spring Festival approaches, a thunderclap has sounded across the internet landscape.

On February 5th, Meituan (3690.HK) announced its plan to acquire Dingdong Maicai outright for $717 million. This is not only the most significant local life sector deal at the start of 2026 but also marks a turning point in the years-long “fresh food e-commerce chaos” and “front warehouse battle.” At this moment, the acceleration button has been pressed, and it can even be said that this is the final showdown of the first half of the fresh food e-commerce race.

According to the announcement, upon completion of this transaction, Dingdong will become an indirectly wholly-owned subsidiary of Meituan, with its financial performance consolidated into Meituan Group’s financial statements. This acquisition can be seen as a key step for Meituan to shift from “burning money to capture market” to “ecosystem integration” in the instant retail battle.

Just before the announcement, in Q3 2025, Meituan delivered a grim financial report: revenue growth was nearly stagnant, core local business operating profit turned from profit to loss, with a loss of 14.1 billion yuan, and an adjusted net loss of 16 billion yuan.

From the shutdown of the “Tuanhao Goods” shelf e-commerce business to the contraction of the community group-buying business “Meituan Youxuan,” and now the full acquisition of the domestic leader in fresh food e-commerce Dingdong, Meituan is pulling resources away from businesses misaligned with its core DNA, focusing all efforts on the instant retail battlefield.

Regarding this acquisition, Dingdong Maicai also issued a company-wide letter. Founder and CEO Liang Changlin admitted in the letter that the news might come as a “surprise” and cause “unease” among employees, but he systematically explained why they chose Meituan.

Liang Changlin stated: “After the merger, Dingdong’s three core competitive advantages—extreme product strength,超预期的服务力, and the ultimate efficiency built through the supply chain system—will not disappear because of the merger. Instead, they will play a greater role on a larger platform.”

Why Dingdong?

As competition in instant retail enters a “knife fight” stage, the focus has shifted from traffic and subsidies to empowering merchants, managing product supply chains, and maintaining the health of the entire retail ecosystem. Acquiring Dingdong at this point is a precise “strengthening” move for Meituan.

The fresh food category is a high-frequency, essential, and relatively high-margin core battlefield in instant retail, and it is also key for platforms to acquire and retain users. However, managing the fresh supply chain is complex, with high requirements for warehousing, delivery, and quality control.

Dingdong is one of the leading players in this field. Its biggest advantage lies in its supply chain—high direct sourcing rate from fresh produce origins, and a rich product matrix of own brands. As of September 2025, it operated over 1,000 front warehouses across China, building a dense last-mile fulfillment network.

Meituan has a strong delivery network and traffic channels, but in terms of supply chain depth and product strength in fresh food, it still lag behind specialized vertical e-commerce companies. Acquiring Dingdong means Meituan can directly access a mature, efficient fresh supply chain system, filling its own product capability gaps.

This acquisition aligns with Meituan’s current strategic shift to “fully focus on instant retail.”

Previously, Meituan shut down the “Tuanhao Goods” business that was mismatched with instant scenarios and scaled back its community group-buying operations. The resources freed up are being redirected toward the instant retail system anchored by “Meituan Flash Purchase” and “Xiaoxiang Supermarket.” Dingdong’s addition will undoubtedly inject strong supply chain capabilities into the self-operated fresh brand “Xiaoxiang Supermarket.”

In the company-wide letter, Liang Changlin further emphasized the advantages of this acquisition.

He introduced, “Dingdong has built a very strong supply chain capability over the years—over 85% of fresh sources are directly sourced, with 12 self-operated factories and 2 self-operated farms.” He further added, “Xiaoxiang Supermarket has also achieved very strong growth in recent years. After the merger, Dingdong’s three core competitive advantages—extreme product strength,超预期的服务力, and the ultimate efficiency built through the supply chain system—will not disappear because of the merger. Instead, they will play a greater role on a larger platform.”

At the same time, Liang Changlin made a commitment to employees. He stated: “Dingdong’s business and team will remain stable, and everyone will still have a very stable development platform. Moreover, Meituan’s business landscape is very broad, and this merger opens up greater career opportunities for everyone.”

Instant Retail Positioning

Meituan’s acquisition is not a coincidence but a key move in its long-term strategic layout in the instant retail field.

2025 is a watershed year for China’s instant retail development. This year, the market size approaches one trillion yuan, and platform companies are collectively ramping up their efforts in the instant retail track. The battle for instant retail has extended from simple “food delivery of all things” to the depths of the supply chain.

In early 2025, JD.com made a high-profile entry into the food delivery race, igniting a nationwide instant retail war. Meituan quickly launched the “Meituan Flash Purchase” brand, offering an average 30-minute delivery service. Taobao Tmall’s “Hour Delivery” service was upgraded to “Taobao Flash Purchase,” integrating brand merchants’ city warehouses and offline stores.

This competition has involved hundreds of billions of resources from the three major platforms, rapidly pushing the daily order volume to hundreds of millions. In Q3 2025, the combined sales and marketing expenses of these three platforms totaled 61.4 billion yuan, mainly for food delivery subsidies.

Intense competition has led to declining profitability across the platforms. In Q3 2025, Meituan’s adjusted net loss reached 16 billion yuan, compared to a net profit of 12.83 billion yuan in the same period last year. Alibaba and JD’s net profits also fell by 53% and 54.7%, respectively.

As the defender, the aggressive moves of other players have eroded Meituan’s previous dominance. The company needs new strategies to maintain its advantage.

Meituan’s acquisition of Dingdong can be seen as a landmark event signaling a new stage in instant retail competition. It indicates that the industry’s main theme is shifting from “capital-driven subsidy wars” to “capability-driven supply chain battles.”

The past year’s frantic subsidies, while quickly educating the market, also made all players realize that “burning money for scale is unsustainable.” A Morgan Stanley report predicts that high subsidies will ease in Q1 2026.

Future competition will focus more on deepening supply-side (merchants and products) capabilities. This is evident from recent moves by Meituan and Alibaba: Meituan Flash Purchase launched the “Brand Officer Lightning Warehouse” to co-build an instant retail ecosystem with thousands of brands; Taobao Flash Purchase introduced a new chain convenience store brand “Taobao Convenience Store” to strengthen supply-side capacity.

In this context, vertical integration and deep cultivation of the supply chain will become key strategies for giants to consolidate their moats. Acquiring Dingdong is a strategic move by Meituan in this trend. It is foreseeable that competitors like Alibaba and JD.com may also invest in or acquire to strengthen their supply chain capabilities in specific categories.

For Meituan, acquiring Dingdong is both a defensive and offensive move.

Defensively, in the fierce market competition, Meituan needs to reinforce the “city wall” of its fresh food category to prevent competitors from penetrating this high-frequency entry point and shaking its local life foundation. Facing Alibaba’s aggressive “Taobao Flash Purchase” and JD’s flank harassment, strengthening its most critical battlefield is urgent.

Offensively, this acquisition is a crucial piece in Meituan’s construction of a “30-minute all things to home” retail empire. By integrating Dingdong, Meituan can offer users a richer, more stable selection of fresh products, increase order value and user stickiness, and expand the instant retail market share for more sustainable growth and profits.

The ultimate goal of instant retail will not be a single platform’s victory but a contest between ecosystems. Meituan’s acquisition of Dingdong is a heavyweight move prepared for this higher-dimensional ecological battle.

Wall Street Journal reporters contacted Meituan immediately after the announcement, and the company stated that there is currently no further information to disclose.

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