Meituan Triumph: In a robust comeback from last year’s pandemic woes, China’s top food delivery firm, Meituan, reported a remarkable 22.1% surge in third-quarter revenue, surpassing expectations. The June-September period saw revenue hitting 76.47 billion yuan ($10.69 billion), compared to 62.62 billion yuan in the same period last year. This stellar performance outpaced the average estimate of 15 analysts compiled by LSEG, signaling a strong rebound.
Meituan’s profit also witnessed a substantial rise, reaching 3.59 billion yuan, in stark contrast to the 1.22 billion yuan reported a year earlier. The impact of COVID-19 containment measures last year heavily affected the third-quarter earnings, particularly due to restrictions on movement in major cities impacting delivery services.
While macroeconomic headwinds were anticipated, Meituan CEO Wang Xing had flagged a tougher third quarter for the food delivery business. However, the platform’s resilience shone through, with a 24.5% increase in quarterly revenue from core local commerce, covering food delivery and the non-food delivery service Meituan Instashopping, totaling 57.69 billion yuan.
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Notably, Meituan’s diversified services, including in-store, hotel booking, and travel sectors, reaped the benefits of a domestic travel rebound over the summer, with a 90% year-on-year rise in transaction volume. As Meituan faces competition from Alibaba-owned Ele.me and ByteDance, its dominance in China’s delivery sector remains strong, holding a 69% share in the 1 trillion yuan market. The company recently expanded to Hong Kong with the KeeTa food delivery business and is reportedly eyeing further international growth, potentially in Southeast Asia.
Daiwa Capital Markets analyst John Choi sees potential growth opportunities for Meituan, especially if it makes successful acquisitions in Southeast Asia. Earlier this year, Meituan made headlines with its $281 million acquisition of AI startup Light Year, founded by Meituan co-founder Wang Huiwen, aligning with the broader trend of major technology firms increasing their investments in artificial intelligence. Meituan’s robust performance and strategic moves underscore its resilience and adaptability in navigating challenges and seizing growth opportunities.
Our Reader’s Queries
Is Meituan making money?
Meituan has reported a significant increase in profits, with a profit of 3.59 billion yuan compared to 1.22 billion yuan from the previous year. The company’s core local commerce, which includes food delivery and Meituan Instashopping, also saw a rise in quarterly revenue by 24.5%, reaching 57.69 billion yuan. This impressive growth is a testament to Meituan’s commitment to providing quality services to its customers.
How many riders does Meituan have?
With a staggering 6.24 million food delivery riders on its platform as of 2020, Meituan has been facing mounting public pressure to enhance the welfare coverage and labour conditions of its workers. As a result, the company is now actively seeking ways to improve the lives of its employees and ensure they receive the support they need to thrive. With a commitment to creating a better working environment, Meituan is taking steps to address the concerns of its riders and provide them with the resources they need to succeed.
Why is Meituan so successful?
With a keen focus on user experience and exceptional operational capabilities, Meituan-Dianping has emerged as the top food delivery platform in the country, outpacing its rivals. The company’s success can be attributed to its smart use of cross-selling and product diversification strategies, which have helped it stay ahead of the curve. By prioritizing the needs of its users and constantly innovating, Meituan-Dianping has cemented its position as a leader in the industry.
Did Meituan couriers go on strike in Shanwei?
Last week, a group of food couriers for Meituan in Shanwei, Guangdong, took a stand for fair wages and better working conditions. This rare display of collective defiance among China’s gig workers saw hundreds of couriers walk off the job. The couriers demanded improvements in the workplace, and their actions were a powerful reminder of the importance of fair treatment for all workers. Despite the challenges they face, these couriers showed that they are willing to fight for their rights and stand up for what they believe in.