Meituan’s revenue jumps 20% in a boost for global expansion
[BEIJING] Meituan’s quarterly revenue climbed 20 per cent, suggesting the Chinese meal delivery leader is successfully fending off new domestic competition while expanding abroad.
The company posted sales of 88.5 billion yuan (S$16.3 billion) in the December quarter, versus the 87.9 billion-yuan average projection. Net income was 6.2 billion yuan.
Meituan’s outperformance suggests the restaurant delivery business remains resilient as Beijing rolls out stimulus to boost consumer confidence and revive spending power across the world’s second largest economy.
The Beijing-based company has been exploring overseas markets in part because of a slowdown at home. Last year, billionaire founder Wang Xing took over the company’s overseas businesses, which for now are centred on the fledgling Keeta app. That division has shown initial success in Hong Kong, squeezing out Deliveroo.
As the Chinese app expands further afield, it’s deploying similar tactics in other new markets. The company launched in Saudi Arabia last September and has been attacking the market through similar measures. It reached one million weekly active users in January, according to Sensor Tower data, matching Delivery Hero’s Hungerstation.
Executives said this year that it’s considering the feasibility of other markets from Europe to South-east Asia.
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“Spending increases in 4Q, particularly on Keeta, might have limited the contraction of losses from new initiatives,” said Bloomberg Intelligence analysts Catherine Lim and Trini Tan. “ These losses are expected to persist in 2025 and beyond after CEO Wang Xing highlighted grocery retail, overseas expansion, and technology as key focuses for Meituan in a Feb 28 internal meeting.”
In China, Meituan is spending heavily to protect its user base from new entrants, potentially pressuring margins. JD.com launched its JD Takeaway platform in February, adding to an already crowded space.
Meituan has been relying on its traditionally subsidy-heavy strategy to draw in merchants and users despite the economic malaise. It’s also ramped up investments in past years in newer initiatives such as grocery retailing, group-buying and live-streaming.
It’s also experimenting with technology. Keeta Drones, a subsidiary of Meituan, received an operation licence in the United Arab Emirates late last year. It’s exploring the feasibility of drone delivery in Hong Kong as well. BLOOMBERG
