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Meituan’s Revenue in Line with Estimates Amid Sluggish Consumption and Rising Competition

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Meituan, China’s largest food delivery company, posted fourth-quarter revenue that met analysts’ expectations, despite the ongoing sluggishness in Chinese consumption. The company reported revenue of 88.5 billion yuan ($12.21 billion) for the three months ending December, just above analysts’ forecast of 87.7 billion yuan, according to LSEG data.

For the full year, Meituan’s revenue reached 337.59 billion yuan, a significant increase from 276.75 billion yuan in 2023. Its net profit surged to 35.81 billion yuan, up from 13.86 billion yuan the previous year, signaling robust growth despite broader economic challenges.

The company highlighted its strategic focus on expanding investments in cutting-edge technologies, including artificial intelligence, unmanned aerial delivery, and autonomous delivery vehicles. These initiatives are aimed at strengthening its position in the highly competitive food delivery market.

Meituan has benefited from an increased focus on low-cost and discounted products, catering to price-conscious shoppers. However, competition in the sector is heating up, particularly with e-commerce giant JD.com entering the food delivery space in February. JD.com announced it would provide full-time delivery riders with social insurance and housing fund contributions under China’s social security system, prompting Meituan to follow suit. Meituan plans to extend similar benefits to its full-time and stable part-time riders starting in the second quarter of 2025.

“As the industry leader, we are also dedicated to fulfilling our social responsibilities by creating employment opportunities and improving courier welfare,” Meituan stated in its earnings report.

US-Blacklisted Zhipu AI Secures Fresh Funding from Chinese State Firm

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Zhipu AI, a Chinese AI startup, has secured 500 million yuan ($69.04 million) in funding from Huafa Group, a state-owned conglomerate based in Zhuhai, Guangdong province. This follows the company’s earlier announcement in January of a separate 1 billion yuan capital raise. Huafa Group’s investment comes amid competition between Chinese cities to back promising AI startups, as Beijing views this sector as vital to its technological rivalry with the United States, according to Zhuhai Special Economic Zone Daily.

Earlier this month, Hangzhou City Investment Group Industrial Fund, a state-backed entity from Hangzhou, also participated in a major funding round for DeepSeek, a competitor of Zhipu AI, securing 1 billion yuan. This aligns with China’s push to strengthen its AI capabilities, as DeepSeek‘s large language models have gained attention for allegedly matching the performance of Western counterparts at lower development costs.

Founded in 2019, Zhipu AI is widely recognized as one of China’s “AI tigers”. The startup has drawn investments from prominent tech giants such as Tencent, Meituan, and Xiaomi, across over 15 funding rounds, according to business registration platform Qichacha. In July 2024, Zhipu AI was valued at 20 billion yuan.

The latest funds will be directed toward advancing the development of its GLM foundation model and furthering the company’s technological innovation and ecosystem expansion. However, this investment comes after Zhipu AI and its subsidiaries were added to the U.S. Commerce Department’s export control entity list in January, which prevents the company from procuring U.S.-made components.

JD.com Enters China’s Competitive Food Delivery Market

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Chinese e-commerce giant JD.com (9618.HK) is expanding into the country’s food delivery sector, announcing on Tuesday its move to recruit restaurants for its new service, JD Takeaway. The company posted an invitation on its official Weixin account, offering a compelling incentive for restaurants: “Join us now, zero commissions all year round!”

Merchants who sign up with JD Takeaway before May 1 will enjoy a full year of commission-free services. JD.com aims to provide extensive support to these businesses, promoting the sustainable and healthy development of the food delivery industry.

China’s food delivery market is highly competitive, with two major players dominating the space: Meituan (3690.HK), the market leader, and Eleme, owned by Alibaba (9988.HK). JD.com’s entry into this market comes at a time when the company is facing intense competition in the broader e-commerce industry, dominated by giants like Alibaba Group and PDD Holdings (PDD.O), as well as rising platforms such as Douyin.

To stay competitive amid an economic slowdown and declining consumer spending power, JD.com has rolled out discount campaigns. However, these efforts have contributed to a decline in the company’s share price. Despite this, JD.com continues to leverage its robust, self-run logistics network, offering same-day or next-day delivery across most regions of China.