
Credit: Capwiuejooh, Creative Commons
Perhaps only in China could a CEO quoting thousand-year old poetry lead to a plunge in their company’s share price. Yet that is what happened to food delivery giant Meituan — the country’s third-largest tech company — this spring.
Meituan boss Wang Xing’s decision to share on social media a Tang Dynasty poem that mocked the actions of China’s first leader was widely interpreted as a slight against President Xi Jinping. (Wang later said that it was intended as a commentary on his industry and competitors.) The company’s shares plummeted by as much as 9.8 percent in the aftermath.
Wang’s timing was not great. Along with other major Chinese tech companies such as Alibaba and Tencent, Meituan has been under greater scrutiny in the last few months. Chinese regulators announced in April that they were investigating Meituan for suspected monopolistic activities. It’s also come under fire for labor practices, alongside major competitor Ele.me. And Meituan was one of the 34 companies summoned by regulators to discuss antitrust practices in April.
Meituan has certainly been branching out. Best known as a food delivery platform, it has expanded into other services, including ride-hailing, bike-sharing, and travel and hotel bookings. It also invests both in internal development of new technologies and in companies such as electric vehicle startup Li Auto and bike-sharing company Mobike.
This week, The Wire looks at Meituan’s work in and beyond China’s food delivery industry.
What Makes Meituan Tick

Meituan’s leading food delivery platform wasn’t launched until 2013, three years after the company was founded. The company got its start selling group-buying deals, like Groupon, in 2010. As it expanded into other services, and merged with Dianping, its approach to offering services has become broader than it first appeared.
Meituan for years struggled to turn a profit in the notoriously competitive food delivery sector, as it fought hard for market share. But it was in the black for the first time in 2019, with its earnings rising again in 2020 to nearly $750 million. Even so, its share price started to slide from its recent high in February, amid fears it and the broader Chinese tech sector would start to be reined in by regulators.
As with other major Chinese tech companies, Meituan doesn’t limit itself to what it’s best known for. Food delivery has accounted for 56 to 58 percent of Meituan’s revenue over the last three years as overall revenues have nearly doubled, according to its financial reports. Meituan users can hail rides through its app. It began developing self-driving delivery vehicles in 2016 and piloting them for grocery deliveries in 2020.
Other top firms have benefited from Meituan’s success. Internet conglomerate Tencent and private equity firm Sequoia Capital China are both major stakeholders. Tencent was brought in through Meituan’s merger with restaurant review and group-buying site Dianping and now holds upwards of 17 percent of the company’s shares. Alibaba was also initially an investor in Meituan, but it sold its stake for $900 million in 2016, indicating it had held a nearly 8 percent stake, according to Pitchbook. Alibaba now backs rival Ele.me instead.
Delivering Dominance
China’s food delivery industry can be seen as a proxy war between Tencent and Alibaba, via their respective stakes in Meituan and Ele.me. The sector had already begun consolidating when Ele.me acquired Baidu Waimai in 2017. These days, Meituan and Ele.me are the two companies that can be considered major players in the sector.
Ele.me was the first major food delivery service on the scene, getting its start in 2009. Both it and Meituan have since been criticized and protested by their workers: One Ele.me employee even set himself on fire to protest unpaid wages earlier this year. Chinese workers in so-called gig economy jobs face similar challenges to their peers in other countries, including poor access to benefits and demanding, algorithm-set workloads.
To give an idea of Meituan’s scale: It made more than 10 billion food deliveries for more than 500 million users in 2020. By comparison, U.S. leader DoorDash made 263 million deliveries — under 3 percent of Meituan’s volume — in 2020, generating $2.9 billion in revenue. DoorDash has been profitable for just one quarter in the last few years — the second three months of 2020, when Covid-19 lockdowns pushed Americans to order in meals at unusually high rates.
Much like other top Chinese tech companies, Meituan’s success is almost entirely domestic. That may be due to the nature of food delivery companies: the top performers in China and the United States are all local, even hyperlocal, with DoorDash dominating in San Francisco while UberEats leads in Miami. It’s a sector where customers show little loyalty to any particular company, with customers jumping to where they can find the food they want or get the best deals.

Backing
Meituan typically invests in companies in sectors that overlap with its business: mobile payments, food, and vehicles. It acquired bike-sharing company Mobike in 2018, rebranding it as Meituan Bikes, and bought a large stake in electric vehicle startup Li Auto. Meituan’s forays abroad have largely been made via its investments. Li Auto is now expanding into Norway to tap the European market. Meituan invested over $500 million in Li Auto last year, and, with CEO Wang, held a 21.8 percent stake as recently as February.


Hannah Reale is a staff writer with The Wire. Previously, she reported for the GBH News Center for Investigative Reporting, The West Side Rag, and her college newspaper, The Wesleyan Argus. @hannahereale