Meituan Launches AI Agent Xiaomei to Boost Food Delivery Amid Rising Competition

Meituan (HK:3690) has introduced a new artificial intelligence agent called Xiaomei, aiming to strengthen its food delivery and restaurant services as competition intensifies in China’s instant commerce market. Built on Meituan’s proprietary LongCat model, Xiaomei enables users to place food orders, book restaurants, and receive personalized dining recommendations through simple voice commands.

The move highlights Meituan’s strategy to leverage AI to enhance user experience and defend its market share against major rivals Alibaba Group (HK:9988) and JD.com (HK:9618). Following the launch, Meituan’s Hong Kong-listed shares edged up 0.6%, underperforming the Hang Seng index, which gained 1.6%. In contrast, Alibaba stock surged nearly 8% on investor optimism surrounding its own AI-driven initiatives.

Alibaba recently revamped its mapping services to directly challenge Meituan’s restaurant booking and recommendation features. The tech giant is also integrating AI-powered tools into its platform, making it a stronger competitor in the food delivery space. These updates come as industry players race to secure a larger share of China’s growing on-demand services market.

However, escalating competition has raised concerns among investors. All three companies—Meituan, Alibaba, and JD.com—have seen profit margins weaken as they pour significant resources into customer acquisition. Earlier this week, Alibaba announced roughly $140 million in incentives and promotions to attract users to its delivery services. Meituan and JD.com have also invested heavily in similar campaigns throughout 2024, further fueling the competitive landscape.

The launch of Xiaomei underscores how AI is becoming central to China’s food delivery sector. While these innovations promise better user engagement, the race for dominance continues to pressure margins, leaving investors cautious about long-term profitability.