On November 28, Meituan (stock code: 3690.HK) released the results of the third quarter of 2023. The company’s quarterly revenue was 76.50 billion yuan (RMB, the same below), an increase of 22.1% over last year. Based on the business strategy of improving quality and efficiency, the main business performance was solid and healthy, driving the company’s overall adjusted net profit to 5.73 billion yuan.
Relying on various local real economic entities, Meituan provides goods and services to more Chinese consumers. As of the end of the third quarter, the number of annual active transaction users, the number of annual active merchants and the frequency of user purchases all hit a record high, and the total order volume of instant delivery reached 6.20 billion, an increase of 23% year-on-year. Among them, the peak order of catering takeaway day exceeded 78 million orders in the quarter, and the peak order of Meituan flash sale day exceeded 13 million orders, all of which maintained a strong growth momentum.
"Thanks to continuous innovation and investment in service retail and merchandise retail, Meituan’s business continued to achieve solid growth this quarter," said Wang Xing, CEO of Meituan. "We will continue to implement the company’s strategy of’Retail + Technology ‘, empowering the digital transformation of various life services industries through technology, helping the local real economy, and contributing more to the pursuit of a better life for consumers and practitioners."
Instant retail improves quality and efficiency, leading to a highly deterministic lifestyle and business model
Instant retail, which is "based on local supply, relying on instant delivery, and meeting immediate demand", is increasingly popular with consumers and operators. Meituan’s instant delivery orders grew to 6.20 billion in the third quarter, which also drove the quarterly revenue of the core local commercial segment including food and beverage delivery, Meituan flash sale and in-store hotel business to 57.70 billion yuan.
This quarter, Meituan’s takeaway business focused more on high-quality growth and refined operations, serving platform merchants with better user experience and more efficient digital means. Meituan’s explosive marketing tool "God’s Seize" launched by Meituan Takeaway stimulated consumer demand for orders through live broadcasts, seckill, short videos, etc., and helped merchants grow both sales and new customers. Data show that in the "God’s Seize" activity on the day of the beginning of autumn, a total of 150,000 milk tea stores participated in the beginning of autumn milk tea carnival. The sales volume of milk tea on that day exceeded 21 million orders. After the beginning of autumn last year, the number of participating merchants and the order volume reached a historical peak. In addition, the average daily sales of merchants participating in the "God’s Seize" time-honored brand live broadcast special increased by 74%.
Instant retail has become a must-have business means for more local entities. In the third quarter, Meituan flash sales established partnerships with nearly 400 retail brands, and the number of annual active merchants increased by 30% year-on-year. Front warehouses have gradually become a new trend in instant retail formats. Meituan lightning warehouses, as an effective supplement to offline supply, also exceeded 5,000 in this quarter. At the same time, more consumers’ immediate needs have been met instantly, and traditional e-commerce categories such as digital home appliances and beauty products have begun to become a typical supply of instant retail. In the third quarter, Meituan flash sales users and transaction frequency continued to grow, and the daily order peak exceeded 13 million orders on the day of Qixi Festival.
The scale of service retail has grown strongly, and multiple measures have been taken to stimulate local consumption potential
Since the beginning of this year, the new retail formats represented by service retail have not only brought consumers experience upgrades, but also further deepened the digital transformation of physical businesses, and further activated the growth potential of local consumption. Meituan continues to optimize platform supply, enabling more local service providers to usher in certain growth in Meituan through the two-wheel drive of popular live broadcast and online store shelf e-commerce. In the third quarter, the transaction volume of the store, hotel and tourism business increased by more than 90% year-on-year, the number of quarterly active merchants increased by more than 50% year-on-year, and the number of quarterly transaction users also increased significantly.
In the third quarter, Meituan’s official live broadcast continued to expand its coverage to more than 200 cities. Beauty industry, health services and other business brands gathered in Meituan’s live broadcast room, and the potential of local service consumption was further released. In August, the transaction volume of in-store business grew strongly and reached a new high. During the Qixi Festival, the transaction volume of multiple live broadcast rooms exceeded 100 million.
In addition, Meituan’s wine travel business launched the latest "must-stay list" this quarter, selecting more than 900 hotels, and continuing to meet consumers’ diverse travel needs through live broadcasts and various forms of joint marketing with different types of hotels. The quarterly transaction volume and room night volume of the wine travel business achieved significant growth compared with the same periods in 2019 and 2021.
The special group buying area launched by Meituan has not only further deepened Meituan’s money-saving mentality in consumers’ hearts through the supply of cost-effective products, but also the strong consumer demand has attracted more local merchants to participate. Large chain merchants such as Mixue Bingcheng, Lele Tea, and Weidomei have chosen to join the Meituan special group buying area. The special group buying transaction volume continued to grow steadily in this quarter.
The new consumption, new business models, and new models of service retail have also brought more job opportunities. In the first three quarters of this year, the number of jobs directly related to service retail on the platform increased by more than 30% year-on-year.
Chen Shaohui, Meituan CFO, said: "In the third quarter, Meituan continued to focus on customers, adding richer content and services, enhancing service quality and efficiency in various categories, bringing more convenient and higher-quality lifestyles to consumers, and providing operators with a digital business model that combines online and offline. We will continue to firmly create long-term value for all participants through technological investment and service innovation."