Meituan, the food delivery platform, surpasses projected income expectations.
Meituan Achieves Record Revenue and Profit Growth, Hints at Global Expansion
China's leading tech conglomerate, Meituan, has reported a significant surge in its financial performance for the year 2023. The company's full-year revenue climbed an impressive 25.8% to reach RMB 276.7 billion (USD 38.2 billion), marking a new milestone in its growth trajectory.
In the fourth quarter alone, Meituan's revenue soared by 22.6% year-over-year, reaching RMB 73.7 billion (USD 10.19 billion). This figure surpassed analysts' forecasts of RMB 72.5 billion (USD 10 billion) and was propelled by strong performances in delivery services and other services.
Delivery services contributed RMB 21.9 billion (USD 3 billion) to the fourth-quarter revenue, while 'other services and sales' accounted for RMB 20.8 billion (USD 2.8 billion). The surge in delivery services was accompanied by a rise in daily order volume, which reached 60 million in 2023, marking a 23.9% increase.
Meituan's daily active users also saw a significant increase, growing more than 30% year-over-year in the fourth quarter. This growth was particularly notable for the food delivery platform, Keeta, which debuted in the Hong Kong market last year and has since become the second-largest food delivery platform in the city, according to Bloomberg.
Amidst this success, Meituan has logged a profit of RMB 13.9 billion (USD 1.9 billion) in 2023, turning around from the RMB 6.7 billion (USD 926.3 million) loss of 2022. This turnaround is a testament to the company's strategic decisions and disciplined approach to investment.
Meituan's expansion plans are signaled by its largest organizational overhaul in six years. The company is considering expansion to other markets and has already introduced a new food delivery brand name in Indonesia. However, Meituan is in no hurry for expansion and will take a careful approach in evaluating opportunities.
Wang, from Meituan, stated that they will be cautious and conservative in their expansion, emphasising the importance of evaluating the return on investment before making any expansion moves. Meituan is also not inclined towards 'crazy all-in' strategies for expansion, choosing instead to prioritise sustainable growth.
The company's domestic business has provided it with sufficient cash reserves and free cash flow to support its expansion plans. Meituan's hotel and travel business has also grown, riding the domestic travel rebound post-Covid-19.
This article was first published on Nikkei Asia and is part of 36Kr's partnership with Nikkei.
