China’s Meituan Dianping, the world’s largest food-delivery service, nearly doubled its revenue last year, but the tech startup is still bleeding cash.
In the second set of results since its high-profile IPO, Meituan Dianping reported total revenues of RMB65 billion (US$9.68 billion), up 92.3 per cent on its 2017 result. Gross profit rose to RMB15.1 billion ($2.25 billion), but its adjusted net loss blew out to RMB8.5 billion ($1.27 billion).
In its results statement, the company said strong revenue growth was achieved across all major business segments and its food-delivery business and in-store, hotel and travel segments on a combined basis generated positive adjusted operating profit.
Total gross transaction volume grew by 44.3 per cent to RMB515.6 billion and the number of annual transacting users rose from 309 million to 400.4 million last year.
The losses have been incurred by new services including ride-hailing and bike sharing.
During the last year, Meituan Dianping has been boosting its customer base by targeting internet users who have not previously used food-delivery services from an online platform. It also launched a rewards program to maintain customer loyalty and incentivise user referrals through social media platforms.
“In addition, through creating more diversified service categories, consumption scenarios and upgrading marketing programs, we increased users’ transaction frequency and further boosted transaction volume growth,” the company said in a results filing.
“We continued to expand the service categories on our platform to include breakfasts, afternoon tea and midnight snacks. Delivery volume of fast food, snacks, desserts and drinks achieved strong growth during last year.”