Chinese food delivery giant Meituan has showcased resilience by reporting a remarkable 33.4% surge in second-quarter revenue, even in the face of a sluggish Chinese economy. The company’s Q2 revenue reached 67.9 billion yuan ($9.33 billion), exceeding expectations and surpassing last year’s 50.9 billion yuan.
Meituan ‘s impressive performance is attributed to its diverse services, including bike-sharing, ticket-booking, and maps, offered through its app. The company also marked a notable shift from loss to profit, with a net profit of 4.7 billion yuan compared to a 1.1 billion yuan loss a year ago.
The COVID-19 pandemic had significantly impacted Meituan’s Q2 2020 results due to lockdown measures in China, rendering cities like Shanghai inaccessible to delivery services. This year’s robust performance, despite the continuing pandemic-related challenges, underscores Meituan’s adaptability and strategic positioning in the market.
The company’s core local commerce revenue, primarily driven by food delivery and Meituan Instashopping, surged by 39.2% to reach 51.2 billion yuan. This growth was buoyed by increased usage of discount coupons and livestreaming, aiding merchants in expanding their reach and driving order volumes.
Despite the positive outlook, Meituan’s CEO Wang Xing cautioned that the third quarter could bring tougher times for the food delivery sector. Macroeconomic factors and extreme weather events, including disruptive rainfall, are expected to pose short-term challenges to the industry. However, Wang expressed confidence in the food delivery sector’s long-term potential, emphasizing its resilience in comparison to other consumer segments.
Meituan’s expansion beyond mainland China, including the recent launch of its food delivery business KeeTa in Hong Kong, signifies the company’s strategic vision. While competition remains fierce, with rivals like Ele.me and ByteDance’s foray into food delivery, Meituan maintains its dominant position in the market, commanding a 69% share of China’s trillion-yuan delivery industry, according to data from ChinaIRN.
As Meituan continues to innovate and navigate market shifts, its ability to thrive in challenging times underscores its strategic prowess and commitment to offering diverse and resilient services.
