As China’s digital landscape continues to evolve, Meituan, a leading Chinese technology platform, has reported substantial growth in its Q1 2024 financial results. The latest performance figures offer a detailed insight into the shifting trends and expanding segments within the country’s internet industry.
Meituan’s revenues for the first quarter surged by 25% to RMB 73.3 billion, up from RMB 58.6 billion during the same period last year. This growth was driven by strong performances across both its core local commerce and new initiatives segments.
The company’s operating profit saw a significant jump of 45.3% to RMB 5.2 billion, while profit for the period increased by 59.9% to RMB 5.37 billion.
Expanding Core Local Commerce
The core local commerce segment, which includes Meituan’s on-demand delivery services, saw revenues increase by 27.4% to RMB 54.6 billion. Operating profit in this segment rose by 2.7% to RMB 9.7 billion, maintaining a solid operating margin of 17.8%.
Meituan’s on-demand delivery business recorded robust growth. The introduction of innovative models such as Branded Satellite Stores, which offer high-quality, cost-effective food delivery without in-store dining, has significantly contributed to this growth.
Additionally, the company expanded its Pin Hao Fan model to more cities, enhancing consumer experience and improving order dispatch systems.
Rapid Growth in New Initiatives
The new initiatives segment experienced an 18.5% increase in revenues, reaching RMB 18.7 billion. Notably, the operating loss for this segment narrowed by 45.2% to RMB 2.8 billion, indicating improved operational efficiency and strategic focus on high-quality growth.
Meituan Select, the company’s community group buying service, played a pivotal role in this performance. By increasing the price mark-up ratio, reducing fulfillment costs, and improving marketing efficiency, Meituan has significantly enhanced its operational metrics.
Broader Business Insights
On-Demand Delivery and Instashopping:
Meituan’s on-demand delivery services saw significant transaction growth, with innovative models like Branded Satellite Stores and expanded Pin Hao Fan coverage driving higher engagement.
Meituan Instashopping continued its rapid growth, driven by increased user engagement and transaction frequency. Strategic initiatives during the Spring Festival, focusing on holiday products and gifts, contributed to higher revenues in categories like liquor, beverages, and daily necessities.
In-Store, Hotel, and Travel:
The in-store business experienced strong growth, benefiting from enhanced marketing capabilities and enriched content offerings. Live streaming campaigns and merchant support measures increased participation and consumer engagement.
Meituan’s hotel and travel segment reported robust year-over-year growth in domestic hotel room nights and GTV. The company capitalized on emerging trends by focusing on niche travel destinations, particularly in lower-tier cities.
Financial Highlights
For the first quarter of 2024, Meituan achieved notable financial milestones:
- Revenues increased by 25% to RMB 73.3 billion.
- Operating profit rose by 45.3% to RMB 5.2 billion.
- Profit for the period jumped by 59.9% to RMB 5.37 billion.
- Adjusted EBITDA and adjusted net profit saw year-over-year increases of 28.9% and 36.4% respectively.
- Number of on-demand delivery transactions grew by 28.1%.
As Meituan continues to navigate the evolving digital landscape, its strategic initiatives and robust financial performance position it well to capitalize on emerging trends and growth opportunities in China’s competitive internet sector. The company’s commitment to operational excellence and innovative service models is expected to drive sustained growth and market leadership.