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.

Top e-commerce mobile shopping platforms in China

Founded in 2018, Shihuituan is a gourmet community e-commerce service platform. It focuses on fruits and vegetables as well as household items targeting the community as the entry point.

For Youhaodongxi (meaning “Got Good Stuff”) founder Chen Ying, Shihuituan is ultimately meant to become the Uber of convenience stores. “We don’t own convenience stores, but we aim to revamp convenience store transaction models, supply chain models, software systems, and user outreach patterns.”

In the past six months, community group purchase has been a hot topic. After successfully tapping into the community scenario, the local services market is finally within reach of WeChat sellers. Communities, with their large numbers, can no doubt alleviate the consumer flow anxiety faced by both online and offline retailers.

Half a year in, the “thousand group-purchasing app war” is still going on. Several leading contenders have already emerged, leaving little room for small players in the battlefield. The evolving tactics of these leading companies will largely shape the future of community group purchasing.

Whether or not we will see another Meituan rise from the ashes will depend mainly on what these leading companies manage to deliver in 2019. Online for only half a year, Shihuituan (developed by Youhaodongxi) was first to publish their winning reports.

Their numbers show that after reaching the 100 million benchmark at the end of last year, Shihuituan’s GMV soon reached 150 million yuan in January of 2019. They have now penetrated over 10 million households in 60 cities, with 1.5 million registered users and 40 thousand group leaders.

“In third-, fourth- and fifth- -tier cities, the core challenge is ordering size, for which group purchasing is the perfect solution”, says Chen Ying. Previously, rural startups often failed because of purchasing power. Without subsidies, they find it difficult to survive.

Chen Ying first became interested in the group purchasing model 3 years ago. “Youhaodongxi is the first-tier city version of group purchasing, the ‘curator’ (in Youhaodongxi) and the ‘group leader’ (in Shihuituan) are the same things.” The only difference is that due to higher purchasing power in first-tier cities, Youhaodongxi takes on the role of guarantor.

Although group purchasing has only been around for a few years, companies in this arena have already passed the 100 million mark, which goes to show the potential of the field.

With the IPO of Pinduoduo, the market is increasingly welcoming of social retail businesses, while consumers are also beginning to embrace group purchasing. Chen Ying grasped this market signal: the world is ready for community group purchasing.

Youhaodongxi has already taken roots in the first- and second-tier cities. For Chen Ying, the question is how it enters into third- and fourth-tier cities, as well as the rest of the country. “Shihuituan is our major play in the bid to enter rural markets.”

Peng Wang’s first move after his appointment as leader of Shihuituan was to test out different models. “We chose two cities with different geological and consumer characteristics, Nanjing in southern China, and Tianjin in the north. We wanted to test different models.” The one in Tianjin was a convenience store model, while in Nanjing they tested a local mothers model, said Shihuituan CEO Wang Peng.

The advantage of convenience stores is that they already have a customer flow as well as storage space, so they took off fairly quickly. In comparison, it took much more effort for local mothers to start, but because of the tight-knit relationships between neighbors in a community, the delayed potential of local mothers soon became evident.

In July and August of last year, however, Shihuituan’s business in Nanjing took a drop due to the local mothers model. Wang and Chen learned the hard lesson that these local mothers will always put their child first.

“The more free time children have, the fewer time mothers have. If for example, the mothers go on vacation with their children during summer break, the business will stop. This is not a sustainable business model.”

Compared to convenience stores, it is also much harder to find a suitable local mother. One must gain entry into the online circles of the community to find an appropriate candidate…

Read the full article on the eBook: How a community-based e-commerce startup managed to reach 60 cities and 10 million households in China.

In Q3 2014, total transaction value of China group buying market was RMB22.96 billion (US$3.74 billion) with an increase of 43.6% quarter on quarter.

The group buying orders were 31.3 million with an increase of 20.4% from the same period of prior year; the number of group buying users was 340 million with an increase of 30.8% YoY; per customer transaction was 67 yuan, which increased by 11.7% YoY in Q3 2014 in China according to data of EnfoDesk.

It is estimated that in the second half of 2014, transaction value of China group buying market will exceed RMB46.2 billion (US$7.53 billion) and total transaction value will be RMB75 billion (US$12.2 billion) in 2014. China group buying market is performing continuously well and it has stepped into a new stage for rapid development.

Meituan, Dianping and Baidu Nuomi were top 3 group buying providers in China in Q3 2014 by transaction value. It is believed that fierce competition for market share will be among the top 3 providers in the future.

China group buying market’s major revenue was from food, entertainment， hotel & traveling service in Q3 2014. Food accounted for 57% with an increase of 7% while entertainment service accounted for 21% with a decrease of 4%. In the first half of 2014, China group buying websites obtained more market share of online food ordering market comparing with other channels. The top 4 group buying websites in China online food ordering market are Meituan.com, Dianping.com, Nuomi.com and Lashou.com.

In Q3 2014, market share of tier-3 cities accounted for 35% with an increase of 3% YoY and tier-4 & lower cities increased by 2%. Besides, different group buying websites focused on different tier cities since first half of 2013 in China which changed market share in August.

China group buying market has become the arena for internet giants since first half of 2014. With powerful technology of search and LBS, Baidu Nuomi are making efforts in lifestyle O2O market. And, Tencent is creating lifestyle O2O ecological system based on Wechat as well as groupon, Dianping.com and 58.com. Wechat POS is consisted of customized POS machine and Wechat payment, targeting offline stores’ payment solution which means it is ambitiously boosting O2O service.

Also read: 10 Case Studies for Wechat Marketing

Since first half of 2013, China popular group buying websites like Nuomi.com, Meituan.com and 55tuan.com all expanded business in lower tier cities in China. Their market share now shows an increasing gap from other group buying websites who are still making efforts in tier-1 and tier-2 cities.

According to the latest data from the report of China group buying market statistics in August published on Tuan88.com, 55tuan and Lashou had 72.6% and 55.97% market share respectively in fourth and lower tier cities but  only 5.45% and 13.67% in first tier cities in August. Dianping, which concentrating on prosperous cities like Beijing, Shanghai, Guangzhou, accounted for 69.9% market share while in fourth tier city, it only accounted for 1.16%.

Also read: China Online Food Ordering Market in 2014

In 2013, total transaction value of China online food ordering market exceeded RMB50.26 billion ($8.18 billion) and it is estimated to reach RMB85.04 billion ($13.85 billion) in 2014 according to data from iiMedia Research.

The number of online food ordering users increased to 107 million in China in 2013 and it is going to reach 158 million with an increase of 47.7%.

In first half of 2014, 20.1% of China Internet users have used online food ordering services. 27.8% of online food ordering users ordered food on mobile device while 31.1% on PC. With the popularity of mobile payment in China, mobile will be the key channel in online food ordering market.

Online food ordering users are more concerned about food hygiene, flavor, delivery time which accounted for 27.7%, 22.7% and 19.9% of respondents respectively.

In the first half of 2014, China group buying websites  obtained more market share of online food ordering market comparing with other channels. The top 4 group buying websites in China online food ordering market are Meituan.com, Dianping.com, Nuomi.com and Lashou.com.

Also Read: Chinese Consumer’s Strong Intention for Online Purchase with Higher Buying Rates Than Browsing