Acquiring Dingdong Maicai: Meituan is not just focusing on instant retail

Retail industry turmoil once again stirs. On February 5th, Meituan announced the acquisition of 100% equity of Dingdong Maicai’s China operations, a fresh instant retail platform, for an initial consideration of approximately $717 million. The latter’s mature fresh supply chain and over a thousand front warehouses will bolster Meituan’s capabilities. Industry insiders see this move as a defensive strategy for Meituan against encirclement by JD.com and Alibaba.

Focusing on instant retail as the core battleground, the e-commerce industry has entered a new stage of “full-scale confrontation among giants.” Supply chain capabilities, delivery networks, and digital operations have become key variables for platform market success. The differentiated competition among the three giants—Meituan, JD.com, and Alibaba—will become even more intense.

Filling Regional Gaps

Meituan’s retail footprint expands further. According to an official announcement, the company highly values its instant retail business. This acquisition will help leverage both parties’ strengths in product offerings, technology, and operations to provide consumers with better shopping and delivery experiences. Public data shows that as of September 2025, Dingdong Maicai has over 7 million monthly active users.

It is understood that Dingdong Maicai’s overseas operations are not included in this transaction. During the transition period, Dingdong Maicai will continue operating under its pre-transaction model. Founder Liang Changlin stated in an internal letter on February 5th that Dingdong Maicai’s business and team will remain stable.

This move by Meituan is essentially a strategic reinforcement in the instant retail sector. Over recent years, Meituan has continuously explored new retail formats—from the early “Meituan Grocery” to the 2023 upgrade to “Little Elephant Supermarket.” From “food delivery” to “delivering everything,” this ambition marks a key transition from single-category to comprehensive retail across all scenarios. As the domestic instant retail market continues to grow, industry competition has shifted from “scale expansion” to “stock game,” with front warehouses becoming a critical battleground for giants.

It is clear that Meituan’s acquisition of Dingdong Maicai not only allows it to incorporate front warehouse resources and quickly fill regional gaps but also to connect with its mature fresh supply chain, creating synergy with existing networks. This positions Meituan more favorably in fierce competition with Taobao Flash Sale and JD.com in instant retail.

Renowned economist and member of the Ministry of Industry and Information Technology’s Information and Communications Economic Expert Committee, Pan Helin, stated that for Meituan, this further broadens its business ecosystem, especially strengthening its offline fresh delivery network, leveraging Dingdong Maicai’s existing warehouse network to achieve comprehensive coverage.

Struggling to Survive

Dingdong Maicai did not make it to its tenth anniversary. Founded in 2017, Dingdong Maicai entered a crowded Shanghai market with over a dozen fresh e-commerce companies, making it one of the later entrants. In subsequent years, Dingdong Maicai successfully went public, outlasting Daily Fresh, and navigated the transition from scale to efficiency, but ultimately could not withstand the fierce competition from industry giants.

A key turning point was 2021. At that time, fresh e-commerce was embroiled in a costly battle. In 2020, Dingdong Maicai’s net loss expanded to nearly 3.18 billion yuan. In 2022, Daily Fresh delisted and went bankrupt, and the front warehouse model faced market skepticism. Dingdong Maicai had to adopt strategies focused on efficiency and scale to achieve profitability. According to Liang Changlin, this decision caused Dingdong Maicai to lose the opportunity for rapid expansion but saved the company.

Dingdong Maicai quickly shrank its national footprint, focusing on Jiangsu, Zhejiang, and Shanghai. After closing sites in Hebei, Tianjin, Anhui, and other provinces, it withdrew from the Southwest in 2023. In 2024, Dingdong Maicai closed 38 sites in Guangzhou, Shenzhen, and other cities, and achieved its first full-year profit. Financial reports show that in 2024, its operating cash flow reached a record high of 929 million yuan.

Since then, Dingdong Maicai has concentrated on the high-consumption markets of Jiangsu, Zhejiang, and Shanghai, expanding its regional network and opening front warehouses in smaller cities like Xuancheng. The Q1 2025 financial report indicates that Dingdong Maicai achieved year-over-year growth in all cities within these regions.

In recent years, while maintaining its core fresh produce, Dingdong Maicai has diversified product categories and revamped its supply chain. Its high-margin private brands have contributed significantly to performance; the 2024 annual report shows private brands account for about 20% of total GMV. Several private brands have become independent food brands, such as “Liangxin Craftsman,” which specializes in rice, flour products, baked goods, and snacks, and has entered online and offline stores (stock code 300959) and exports overseas.

Although strategic adjustments have enabled profitability in recent years, in Q1 2025, Dingdong Maicai’s net profit declined by 34.96% year-over-year. The financial report attributes this to costs associated with opening new warehouses in Jiangsu, Zhejiang, and Shanghai, as well as seasonal fluctuations during the Spring Festival and external factors affecting growth.

“Letting go of direct competition and moving toward collaborative coexistence” is Liang Changlin’s approach to facing industry giants. Instead of fighting head-on, he advocates for self-preservation. For example, Dingdong Maicai’s core strengths—product quality, a deeply cultivated fresh supply chain, and over 1,000 front warehouses—will further strengthen Meituan’s moat in instant retail.

Deep Competition Among Giants

Dingdong Maicai’s acquisition by Meituan marks the end of fresh retail as a game primarily among smaller players, now dominated by giants.

On a broader scale, since last year, JD.com, Alibaba, and Meituan have been fiercely competing. From organizational restructuring, fulfillment, and delivery timeliness to inventory management, these giants frequently adjust their business layouts using their resources. Competition has intensified in subsidies, category expansion, and ecosystem collaboration.

Yuan Shuai, Deputy Director of Investment at the China Urban Development Research Institute, believes that the e-commerce market has entered an era of consolidation led by major players. Smaller industry participants are either acquired or gradually exit, with market share increasingly concentrated among leading companies like Meituan and JD Daojia. Previously, competition focused on delivery speed and product prices; future battles will shift toward ecosystem synergy and user experience.

The industry is moving into a phase of refined, deep competition among giants, reflecting different strategic directions:

• Meituan, as the industry leader, adopts a defensive strategy centered on full-scenario coverage, focusing on local life services and strengthening core barriers. It has accelerated expansion of supermarkets like Happy Monkey and Little Elephant Supermarket to counter JD Discount Supermarket, Hema NB, and Qixian. On the online front, Meituan has cut underperforming units like Meituan Youxuan and Tuangouhao, focusing on its main business. Its record-breaking delivery orders and the “All Things to Home” strategy are defensive responses to Alibaba and JD.com.

• JD.com, as a disruptor, emphasizes quality differentiation, supply chain cost reduction, and market penetration through surprise attacks. Since February last year, JD has rapidly gained 25 million daily delivery orders by offering merchant commission waivers and full-time riders with social insurance, boosting low-frequency consumer goods and user activity. It has also incubated new formats like Qixian Xiaochu, JD Discount Mall, and reactivated its travel business, all targeting industry pain points with supply chain advantages to reduce costs and expand markets.

• Alibaba, with substantial financial resources, pursues a more aggressive approach, focusing on strategic restructuring to reverse the situation. It launched a “dual engine” strategy of “ecosystem collaboration + full-category upgrade.” Starting in June last year, Alibaba integrated Fliggy and Ele.me into its e-commerce business group, transforming from a traditional e-commerce platform to a comprehensive consumer platform. Six months later, Ele.me was renamed Taobao Flash Sale, with various non-food merchants, Tmall supermarkets, and convenience stores accelerating supply, enabling Taobao Flash Sale to leap from food delivery to full-category coverage.

By 2026, Alibaba aims to deeply integrate multiple consumer scenarios like Qianwen App, Gaode, Fliggy, and Taobao Flash Sale, allowing consumers to order food without manual input. Combining AI with consumer services, Alibaba elevates competition from just online traffic and offline fulfillment to full-chain efficiency, ecosystem synergy, and user value creation, aiming for the top market share.

In essence, the competition among giants is no longer limited to order volume battles but involves strategic, holistic considerations: Meituan focuses on fulfillment infrastructure and local life ecosystem; Alibaba leverages ecosystem synergy and full-category upgrades; JD emphasizes quality and supply chain advantages. After subsidy reductions, supply density, service quality, and unit economic efficiency will become the core competitive points.

Wu Zewei, a special researcher at the Su Business Bank, predicts that future market structure may further concentrate among leading firms, with supply chain capabilities, delivery networks, and digital operations becoming key. Trends include expanding categories from fresh produce to daily necessities, more diverse service scenarios, and deeper application of technology and data to drive cost reduction and efficiency.