Chinese food delivery giant Meituan reported a second consecutive quarterly loss on Friday, weighed down by its expansion into the community group-buying business that relies heavily on subsidies.
It reported a US$762.4 million loss in the January to March period versus a loss of $248 million a year earlier, when its business was hit by coronavirus curbs, and a $352 million loss in the September to December quarter.
Tencent-backed Meituan, whose services include restaurant reviews, ride hailing and bike sharing, said total revenue rose 120.9 per cent in the period from a year earlier to $5.8 billion.
Food delivery, the company’s core business, posted quarterly revenue growth of 116.8 per cent to $3.2 billion.
New initiatives, including its community group buying service Meituan Select, grew by 136.5 per cent year-on-year to $1.5 billion in revenue.
The operating loss from new initiatives, however, ballooned to $1.26 billion over the quarter.
The company has in total reported five profitable quarters since it made its stock market debut in Hong Kong in 2018.
The 11-year-old Meituan has also run into regulatory hurdles, as the government recently stepped up efforts to rein in big technology firms, citing the risk of abuse of market power to stifle competition.
In April, authorities launched an antitrust investigation into Meituan, focussing on a practice whereby a company forces vendors to use their platform exclusively.
Meituan also faces social media criticism of its treatment of delivery riders, most of whom are not covered for basic social and medical insurance.
- Reporting by Yingzhi Yang and Tony Munroe in Beijing; Editing by Jan Harvey, of Reuters.