Imagine using an app every day that not only delivers food and books hotels but is also quietly becoming more profitable. This financial success ultimately benefits both users and merchants through improved experiences and greater choices. How has Meituan achieved this remarkable transformation? Let's examine the company's latest financial report to uncover its growth strategy.
Impressive Financial Performance: The Engine Behind Growth
Meituan reported annual revenue of 65.23 billion yuan in 2018, representing a staggering 92.3% year-over-year increase. Fourth-quarter revenue reached 19.8 billion yuan, up 89% from the previous year. While the company remains in a loss position, adjusted net losses narrowed to 8.52 billion yuan, with adjusted EBITDA at negative 4.73 billion yuan. These figures indicate Meituan is accelerating toward profitability.
Key Takeaways:
Revenue surge: The 92.3% growth rate demonstrates Meituan's strong momentum.
Improved monetization: The take rate increased to 12.6%, showing enhanced profitability.
User engagement: Growing transaction frequency per user indicates increasing platform dependence.
Core Business: Dual Growth Drivers
Meituan's primary revenue streams come from food delivery and in-store/digital hospitality services, both showing robust growth and profitability.
Food Delivery: Revenue reached 38.14 billion yuan in 2018, an 81.4% increase. Gross margin improved to 13.8%, generating 5.27 billion yuan in gross profit. Transaction volume grew 56.3% to 6.39 billion orders, with Meituan maintaining over 64% market share.
In-Store/Digital Hospitality: This segment generated 15.84 billion yuan in revenue with an impressive 89% gross margin. Domestic hotel room nights increased 38.5% to 284 million, making this Meituan's most mature and profitable business line.
"Food+Platform" Strategy: Building Competitive Advantage
Following its October 2018 organizational restructuring, Meituan focused its strategy on "Food+Platform." The company established user platforms centered around dining experiences and formed two major business groups: in-store services and home services.
This strategic shift clarifies Meituan's core competencies in the food sector while building a comprehensive platform connecting users with merchants across multiple service categories.
New Ventures: Cautious Expansion
Meituan's exploration of new businesses—including bike-sharing (Mobike), ride-hailing, and merchant services (Kuailu)—generated 11.24 billion yuan in revenue, a 450% increase. However, the Mobike acquisition resulted in 4.55 billion yuan in losses.
The company has indicated more measured investment approaches for new ventures in 2019, prioritizing profitability over rapid expansion.
Outlook: Platform Value Realization
Meituan's core businesses demonstrate clear profitability, validating its strategy of using high-frequency services (food delivery) to drive lower-frequency offerings (travel services). As platform effects strengthen, Meituan is positioned to become a globally influential internet platform.