Meituan reports robust revenue, profit growth in second quarter on ‘value for money’ approach
The company reported revenue of 82 billion yuan for the quarter, up from 68 billion yuan a year earlier, as it stepped up efforts to offer discounted meals
China’s largest on-demand service provider Meituan reported on Wednesday a 21 per cent jump in second-quarter revenue, bolstered by steady growth in its core local commerce operations of food and grocery deliveries.
Beijing-based Meituan brought in 82 billion yuan (US$11.5 billion) for the quarter ended June, up from 68 billion yuan a year earlier, as the company stepped up efforts to offer discounted meals through a range of campaigns as well as an expansion of its on-demand e-commerce operation, helping it fend off competition from rivals including Alibaba Group Holdings’ Ele.me and ByteDance’s Douyin. (Alibaba owns the South China Morning Post).
Profit for the quarter came in at 11 billion yuan, a 142 per cent surge from 4.7 billion yuan a year earlier.
In its earnings statement, the company said it has focused on operational improvements and enhanced “value-for-money” offerings in the June quarter.
“We actively explored new product formats to capture different consumer demand, particularly in the low-price domain”, it said.
Revenue for the bread-and-butter core local commerce segment, including on-demand food and grocery deliveries, hotel and travel bookings, and merchant marketing services, was 60.7 billion yuan, a 18.5 per cent increase from last year’s 51.2 billion yuan.
Speaking on the post-earnings call, Wang Xing, founder and chief executive of Meituan, said the company was still in the early stage of overseas expansion and would continue evaluating opportunities in different regions, adding that “the overseas market is the right long-term strategy for Meituan”.
Growth in the so-called on-demand e-commerce business, which delivers goods to online shoppers within hours rather than days, remained a bright spot.
