Core Viewpoint - Meituan's recent Q2 financial report indicates a significant decline in net profit, highlighting the intense competition in the food delivery market, particularly from JD and Alibaba, which has led to a drastic reduction in profitability despite a modest revenue growth [1][4][8]. Financial Performance - In Q2, Meituan reported revenue of 91.84 billion RMB, a year-on-year increase of 11.7% [1][3]. - Adjusted net profit fell to 1.49 billion RMB, a staggering 89% decrease compared to the previous year, which was 13.6 billion RMB [1][3]. - The operating profit for the core local business dropped from 152 billion RMB in the previous year to 37 billion RMB, with the operating profit margin plummeting from 25.1% to 5.7% [12]. Market Competition - The competition from JD and Alibaba has intensified, leading to what Meituan describes as "irrational competition," which has severely impacted its growth trajectory [8][12]. - Meituan's market share in the food delivery sector has decreased from over 70% to approximately 44%, while Ele.me (Taobao Flash Sale) has gained ground, reaching a market share of 44.5% [13][14]. Strategic Response - In response to the competitive pressure, Meituan has initiated aggressive subsidy campaigns to retain market share, resulting in a significant increase in order volume, with a record of 1.5 billion orders in a single day [12]. - The company is expected to incur even higher costs in Q3 as it continues to engage in this competitive battle, indicating a challenging outlook ahead [12].