Chinese food delivery giant Meituan on Friday reported a bigger-than-expected 22.6 per cent rise in quarterly revenue, defying a slowing Chinese economy and bolstering its ambitions to expand into other markets.
Meituan – which has an app that provides services ranging from bike-sharing to ticket-booking and maps – reported revenue in the quarter to December 31 of US$10.20 billion, versus $8.4 million in the same period a year earlier.
The result compared with the $10.1 billion average of analyst estimates compiled by LSEG.
Net profit hit $306 million from a loss of $151.2 million a year earlier.
Last May, Meituan entered Hong Kong with new food delivery business KeeTa. The business marks Meituan’s first foray outside of mainland China and is expected to be a stepping stone to further international expansion.
CEO Wang Xing, who recently took over direct responsibility for the international business in an organisational reshuffle, conceded that Meituan was late to global expansion compared to other Chinese tech giants.
“We are actively evaluating opportunities in other markets,” he said in a post-earnings call with analysts. “We have the tech know-how and operational know-how, so we are quietly confident we can enter a new market and find an approach that works for consumers there.”
The company’s board authorised up to $1 billion in share buybacks beginning December 1 and Wang said that future buybacks would be regularly evaluated by Meituan, depending on its investment opportunities and financial position.
China’s post-pandemic recovery has remained lacklustre, giving rise to a trend that has seen low-cost and discounted products become the focus for platforms and shoppers alike.
Revenue from core local commerce, which includes food delivery and non-food delivery service Meituan Instashopping, rose 26.8 per cent year-over-year to $7.7 billion.
Sales from new initiatives grew by 11.5 per cent year-over-year to $2.6 billion.
Meituan remains China’s biggest delivery platform, with a 69 per cent share of the $140 billion market, according to data from researcher ChinaIRN.
Meituan’s hotel booking and travel sector business was buoyed by a “strong industry rebound” with the value of domestic hotel bookings on its platform rising by 100 per cent for the full-year 2023, the company said in its earnings report.
Last year, Meituan announced it was buying Light Year, an artificial intelligence (AI) startup established by Meituan co-founder Wang Huiwen, for $281 million, as major tech firms in China increase their bets on AI.
- Reporting by Casey Hall; Editing by Neil Fullick, Jacqueline Wong and Louise Heavens, of Reuters.
