Alibaba and Meituan Spend Billions, Yet the True Winners of the Food Delivery Battle Have Emerged

August 25 — A recent online remark—“The total value of delivery coupons I receive each month exceeds my entire salary”—aptly reflects the intensity of the ongoing food delivery subsidy competition. While the era of “zero-cost” promotions has largely passed, platforms such as Taobao Flash Sale and Meituan continue to issue substantial daily discounts. Since June, Meituan has averaged more than 90 million daily orders, reaching a peak of 120 million on July 5. Between August 7 and 9, Taobao Flash Sale processed over 100 million orders per day, briefly surpassing Meituan in market share.

JD.com’s second-quarter performance in 2025 highlights the scale of this rivalry. The company posted revenue of RMB 356.7 billion, marking a 22.4 percent year-on-year increase and its strongest quarterly growth in three years. Its food delivery division exceeded 25 million daily orders and now operates in 350 cities, partnering with over 1.5 million restaurants, even as competitors continue to push order volumes higher.

Amid this wave of subsidies, several brands have emerged as clear beneficiaries. Luckin Coffee capitalized on promotional momentum, selling more than 20 million cups in a single day during its “First Milk Tea of Autumn” campaign. In Q2 2025, the company reported net revenue of RMB 12.359 billion, up 47.1 percent, and GAAP operating profit of RMB 1.7 billion, a 61.8 percent increase, resulting in an operating margin of 13.8 percent. Gross merchandise value reached RMB 14.179 billion, supported by a 13.4 percent rise in same-store sales and the addition of 2,109 new outlets, bringing its global store count to 26,206. Internationally, Luckin expanded by 24 stores, reaching 89 locations across Singapore, the United States, and Malaysia. First-half revenue totaled RMB 21.224 billion, a 44.6 percent increase, with net profit rising 125.4 percent to RMB 1.776 billion—solidifying its reputation as a preferred delivery partner due to its dependable supply chain and service quality.

Other brands have also benefited. Kudi Coffee saw gains, and HeyTea recently integrated its network of over 4,000 stores with Taobao Flash Sale. Yum China leveraged its diverse brand portfolio—including KFC, Pizza Hut, Taco Bell, Little Sheep, and Huang Ji Huang—to achieve notable delivery growth. In the first half of 2025, Yum China reported USD 5.768 billion in revenue, with delivery sales up 17 percent. Second-quarter revenue rose 4 percent to USD 2.8 billion, and operating profit increased 14 percent to USD 304 million, both setting quarterly records. Delivery now accounts for approximately 45 percent of restaurant revenue at both KFC and Pizza Hut, supporting a 5 percent systemwide sales increase for KFC and a 17 percent rise in same-store transactions for Pizza Hut. Yum China added 336 net new outlets in Q2, bringing its total to 16,978, with digital orders now representing over 90 percent of total sales, supported by a loyalty base of 90 million users across its platforms.

Subway has also seen growth, surpassing 1,000 stores in China, benefiting from the delivery surge. These success stories contrast sharply with the challenges faced by the instant-meal segment. As Mixue Ice Cream & Tea offers RMB 2 beverages and PinHaoFan bundles full meals under RMB 10, younger consumers are increasingly turning away from traditional convenience foods.

Legacy brands have struggled to keep pace. Xiangpiaopiao’s brewed milk-tea segment saw a 15.4 percent revenue decline in 2024, falling to RMB 2.271 billion, with sales volume down by 162 million cups. In Q1 2025, revenue dropped 19.98 percent to RMB 580 million, and net loss widened to RMB 18.775 million, despite modest gains in ready-to-drink offerings. The World Instant Noodles Association reported a decline of 4 billion packs in consumption from 2020 to 2023, with total volume falling to 43.8 billion in 2024 and Q2 2025 sales down 8.9 percent. Master Kong’s first-half revenue contracted by RMB 11 billion, with instant-noodle sales decreasing 2.53 percent to RMB 13.465 billion and beverage revenue falling 2.6 percent to RMB 26.359 billion. Its distributor network shrank by 3,409 outlets. In contrast, Uni-President, Baixiang, and South Korea’s Samyang Group managed to achieve growth during the same period. As delivery platforms, ready-made meals, and self-heating options gain popularity, the appeal of traditional instant noodles continues to wane.