Why Meituan's Price War in China May Linger

Goldman Sachs analysts believe Meituan’s ongoing price war in China’s app ecosystem could persist longer than expected, as platforms compete to become the dominant “everyday app.”

This battle isn’t just about discounts—it’s a high-stakes effort to lock in user behavior and scale before pivoting to profitability. Companies like Meituan are absorbing short-term losses to win long-term loyalty. But as seen in previous market cycles, the real shift happens when firms transition from unsustainable discounting to strategic moves like customer segmentation, product bundling, and enhanced services.

Key Highlights

• Meituan and rivals are locked in a prolonged app price war in China
• Focus is shifting from discounts to product bundling and user services
• Analysts predict longer war cycles as firms chase “everyday app” status

These approaches allow platforms to diversify offerings, improve margins, and deepen engagement without relying solely on price cuts.

While the current phase appears “irrational,” the goal is rational: become essential to daily life in China. As the digital economy matures, platforms that adapt from price-led models to service-led ecosystems will dominate.

Also Read: Alibaba, Meituan, JD Drive China's Quick Commerce Shift

Meituan’s case underscores a broader truth—enduring success in China’s tech wars will require more than low prices; it demands sticky services and smart segmentation.