Meituan acquires Dingdong Maicai for 5 billion yuan, entering the era of giant battles in instant retail

Meituan Further Bets on Xiaoxiang Business

On February 5th, Meituan announced on the Hong Kong Stock Exchange that it will acquire 100% equity of Dingdong Maicai China for an initial consideration of approximately $717 million (about 5 billion RMB).

Founded in 2017, Dingdong Maicai is a fresh produce instant retail platform that emphasizes “fastest 29-minute delivery.” Previously, there were multiple reports that JD.com, determined to focus on instant retail, was interested in acquiring Dingdong Maicai. Now that Meituan has become the final buyer, the competitive landscape of the instant retail market will undergo new changes.

On one hand, medium-sized instant retail companies are finding it increasingly difficult to survive amid fierce competition among industry giants, with the sector entering a phase dominated by players like Meituan, Alibaba, and JD.com; on the other hand, Meituan’s acquisition of Dingdong Maicai further strengthens its Xiaoxiang business, which is expected to increase its market share in East China.

Meituan Further Bets on Xiaoxiang Business

The announcement states that Dingdong Maicai’s overseas operations are not included in this transaction and will be divested before closing. During the transition period, Dingdong Maicai will continue to operate under its previous model.

According to the announcement, the transferor agrees to sell all issued shares of the target company held by them, with an initial price of $717 million (subject to adjustments). However, the transferor can withdraw up to $280 million from the target group, while ensuring the net cash of the target group remains no less than $150 million.

In simple terms, the transferor must retain $150 million, and Meituan’s actual expenditure on this deal is approximately $567 million. The transferor can withdraw $280 million, resulting in an effective gain of about $997 million.

After the lively takeout war in 2025, Meituan reported an adjusted net loss of 16 billion RMB in the third quarter. In the context of relatively tight cash flow, Meituan’s additional investment in Dingdong Maicai surprised some industry insiders.

A mid-level employee from an e-commerce platform’s instant retail division told the 21st Century Business Herald that they were somewhat surprised that Meituan became the buyer of Dingdong Maicai. It’s clear that Meituan is “eager to develop Xiaoxiang business,” and this acquisition is also a move to strengthen it.

Dingdong Maicai founder Liang Changlin mentioned in an internal employee letter that, as industry peers, Xiaoxiang Supermarket has achieved strong growth over the past few years by sourcing high-quality products and continuously improving user experience, quickly becoming an industry leader. This aligns well with Dingdong’s “4G” strategy.

Zhuang Shuai, founder of Bailian Consulting, told the 21st Century Business Herald that this move clearly indicates Meituan is reinforcing its self-operated front warehouses and instant retail business for Xiaoxiang Supermarket, while also increasing its market share in Jiangsu, Zhejiang, and Shanghai.

Xiaoxiang Supermarket originated from Meituan’s 2019 launch of “Meituan Grocery.” After rebranding in 2023, Xiaoxiang Supermarket has officially upgraded from a fresh produce e-commerce platform to a full-category instant retail platform. In the food and snack segment, over the past two years, Meituan has gradually divested from less promising businesses like Meituan Preferred and Meituan E-commerce, focusing more on Xiaoxiang. By the end of 2025, Xiaoxiang Supermarket has expanded to over 30 cities nationwide, and in the past two months, it opened two physical stores.

Dingdong Maicai holds a certain market share advantage in East China. After Meituan’s acquisition, Xiaoxiang’s market share in East China is expected to increase.

The Battle of Giants in Instant Retail

By 2025, competition in the instant retail industry reached its peak, starting with JD.com’s entry into the food delivery market, followed by Alibaba, leading to a war of words and subsidy battles.

Beyond food delivery, JD.com, Alibaba, and Meituan are increasing their investments in fresh produce instant retail. Alibaba has laid out fresh retail through Hema Fresh, while JD.com is strengthening its position in the fresh sector through Qixian.

Dingdong Maicai listed on the NYSE in 2021, with a first-day market cap exceeding $5.5 billion. In the current competitive environment among giants, companies like Dingdong with medium size are finding it harder to survive. In Q3 2025, Dingdong Maicai achieved revenue of 6.66 billion RMB and a net profit of 80 million RMB, maintaining profitability for seven consecutive quarters under GAAP standards. As of September 2025, Dingdong Maicai had over 7 million monthly active users.

As of pre-market trading on February 5th, Dingdong Maicai’s market value was $694 million, a sharp decline from its initial valuation of over $5.5 billion. Even though Dingdong is profitable, non-top-tier players in the fresh produce instant retail sector are increasingly viewed unfavorably by the market.

Li Chengdong, founder of Dolphin Society, a long-time observer of e-commerce, told the 21st Century Business Herald that it’s now “a battle of gods, with little guys suffering,” as the net profit margins in fresh instant retail are very thin. In a competitive environment among giants, survival becomes more difficult. Dingdong lacks the capital advantage and would be vulnerable if it engaged in price wars. Therefore, joining a giant at this stage is a wise choice.

Liang Changlin mentioned in his internal letter that after the merger, Dingdong’s excellent product quality, exceptional service, and supply chain-driven efficiency will not disappear but will instead be amplified on a larger platform.

For Meituan, as a leading instant retail platform, acquiring Dingdong Maicai adds a competitive edge against Alibaba and JD.com in the instant retail field, indicating that the sector has fully entered a giant battle phase.

Meanwhile, concerns about potential industry monopoly arising from this acquisition have been raised. The 21st Century Business Herald interviewed several legal experts. An anonymous lawyer stated that whether it involves monopoly depends on defining the relevant market and assessing market share. Currently, players in fresh produce instant retail include Meituan, Hema, Qixian, Sam’s Club, and regional players like Pupu. Whether their combined market share constitutes a monopoly remains to be seen. Another key issue is whether the platform has filed for anti-monopoly operator concentration review; large companies are unlikely to make such basic legal mistakes.