The Beijing-based company posted revenue of 73.3 billion yuan (US$10.1 billion), up from 58.6 billion yuan in the same period last year, as on-demand delivery transactions during the March quarter grew 28.1 per cent year on year to 5.5 million. That beat the 70.3 billion yuan average analysts’ estimate compiled by London Stock Exchange Group.
Profit for the quarter reached 5.4 billion yuan, about 60 per cent higher than 3.4 billion yuan a year ago.
Meituan’s Hong Kong-listed shares closed largely unchanged at HK$112.70 on Thursday, ahead of its quarterly earnings announcement.
“We work closely with millions of merchants and brands, penetrate deeper into the industry value chain, and actively explore innovative business models,” Wang said during the earnings call.
Meituan is also keen to launch its services in more international markets. “In the long run, our goal is to bring our product and services to a global audience, offer better services and experiences to both consumers and merchants globally,” Wang said, adding that his company has been exploring opportunities in Southeast Asia.
Core local commerce operations – the company’s cash cow that includes on-demand food and grocery deliveries, hotel and travel bookings, and merchant marketing services – saw revenue surge 27.4 per cent to 54.6 billion yuan.
In the first quarter, Meituan also expanded the coverage of its Pin Hao Fan group-buying service to more cities across the mainland, the company said. It pointed out that an improved order-dispatch system and operations enabled Pin Hao Fan’s peak daily order volume to reach a new high in the quarter.
Its Shen Qiang Shou campaign, meanwhile, introduced discounted meals from popular chain restaurants. In addition, the company launched marketing campaigns to stimulate consumer demand during the holidays, and offered broad selections of coupon packages and discounts to promote mega-hit products.
Those tactics may have helped with order volume growth, but these have also contributed to lower average order value, according to a research note by Jamie Chen, an analyst at investment consultancy Third Bridge, that was published before Meituan’s earnings announcement.
Meanwhile, Meituan’s new initiatives business segment – covering its online supermarket and community group-buying services – narrowed its operating loss to 2.8 billion yuan from 5 billion yuan a year earlier.
