China’s Meituan Posts Strong Sales
The Chinese food delivery service Meituan Dianping has reported its financial results for the three months ended September 30, 2020, wherein the company posted the equivalent of $5.4 billion in sales and a net income of $958 million. Meituan’s profit for the quarter was pulled up by the equivalent of $880 million in investment gains.
Meituan’s quarterly revenue went up 29% compared to the past year while profit surged nearly 400%. The company has affirmed itself as the biggest food delivery service in China and the world at large, bouncing back from disruptions of the past quarters that spurred from the coronavirus pandemic.
Along with its food delivery business, Meituan also maintains a strong business in travel and hotel bookings alongside on-demand shopping for consumer goods. Its revenue from that segment however grew just 4.8% compared to the past year, notably as a Covid-19 pandemic has dwindled general travel and hotel activity.
Overall, Meituan is a “super app”, a term referring to apps that offer an all-in-one experience to access many different services. The company has smaller businesses in services ranging from bike-sharking to ticketing, all grouped under the “New Initiatives” segment. Still growing and racking up more expenses than sales, losses from that segment came at $300 million in the past quarter.
Even as it grows, Meituan is facing increasing competition from other players such as Pinduoduo and Alibaba’s Ele.me. With that, the company has been investing more to branch out into other services.
Analysts expect Meituan’s growth to continue over the coming months at similar levels to what is it now.