meituan Q3 turns losses into profits, and instant retail and unmanned delivery have become highlights.
On November 25, Meituan (03690.HK) released its third quarter results for 2022. According to the financial report, Meituan's revenue in the third quarter reached 62.6 billion yuan, an increase of 28.2% over last year. The company's overall profit of reached 1.22 billion yuan during the period.
In the past second quarter, instant retail that strives for 30 minutes to "all things come to your home" has become a highlight. In the third quarter, relying on various real economy market entities, Meituan continued to focus on instant retail, and the number of instant delivery orders in Meituan increased to 5 billion.
In terms of user size, as of the end of the third quarter, Meituan's annual transaction users in the past twelve months was 687 million. In addition to the number of users continuing to grow, the frequency of users' consumption on the platform has also continued to increase. The average annual transaction number of transactions for transaction users reached 39.5, and increased by 15% year-on-year.
In this way, Meituan is not only a "little helper of a better life" in the hearts of consumers, but also a reliable partner for millions of merchants to generate income and increase efficiency.
financial report shows that in the third quarter, Meituan continued to deepen the "retail + technology" strategy and continued to increase investment in China's consumer market and technology research and development. Meituan's R&D expenditure continued to grow, reaching 5.4 billion yuan.
"Thanks to the continuous exploration and innovative services on both the supply and demand ends of the retail industry, Meituan continued to achieve steady growth in the third quarter." Meituan CEO Wang Xing said, "Under the strategic guidance of 'retail + technology', we have firmly adhered to the mission of 'helping everyone eat better and live better'. In the future, we will continue to accelerate the promotion of digital transformation of life services and retail industry through technology innovation , helping digital economy deeply integrate with the real economy, and contribute more to the majority of consumers and practitioners' pursuit of a better life."
01 Instant retail stimulates new momentum for consumption and has long-term confidence in in-store business
Due to the impact of the epidemic and the changes in people's consumption habits, instant retail, characterized by "local stores + instant delivery", is becoming increasingly popular among consumers. Driven by this, in the third quarter, Meituan instant delivery orders increased to 5 billion, and 's core local commercial branch, including catering takeaway, Meituan flash purchases and in-store hotel and tourism businesses, increased to 46.3 billion yuan in the third quarter.
Among them, Meituan's in-store, hotel and tourism business continued to perform steadily, especially during the summer vacation, the number of annual active merchants and quarterly transaction users reached historical highs.
Due to the impact of the epidemic, all categories of goods and services in hotel hotels and tourism business have not resumed normal operations nationwide. However, Meituan management said at the performance call that night that the in-store business has a high degree of flexibility and flexibility, so it is still optimistic about medium- and long-term growth.
At the same time, regarding the industry competition issues that are generally concerned by the outside world, Meituan management said that Meituan’s in-store business provides users and merchants with differentiated value compared with other platforms, but in either way, all participants can help the digitalization process of the local service industry, jointly expand this cake, and better serve merchants and consumers.
In addition, the financial report shows that in the third quarter, Meituan takeaway business focused more on high-quality growth and refined operations. learned from Meituan that more and more small and medium-sized businesses in breakfast, afternoon tea and late-night snack categories have chosen to settle in Meituan, further accelerating the digitalization of the catering industry.
At the same time, as the "gold field" where Meituan continues to bet, the instant retail industry also relies on digital technology to connect more local entities and local consumers, and through online exposure and word of mouth accumulation, accurately match consumer groups, so that the local consumption growth potential is further stimulated.
financial report shows that in the third quarter, the transaction volume of convenience stores and supermarkets on Meituan platform increased by 27.9% and 62% year-on-year respectively, and the order volume of husband-and-wife stores increased by 125% year-on-year.
In addition, the rookie business , which was promoted in the second quarter, Meituan flash sale has also strengthened its cooperation with traditional physical retail brands and continued to establish new strategic partnerships.
For example, the authorized distributors of Apple products on Meituan platform cover more than 200 cities. As of 11 noon on iPhone 14 on sale, orders on iPhone 14 on Meituan increased by nearly three times compared with last year's iPhone 13 ; in addition, hundreds of Suning.com stores have launched the Meituan platform. Driven by this, the active merchants of Meituan flash sales and newly settled merchants both increased by 30% year-on-year in the third quarter.
In the third quarter, Meituan continued to focus on the construction of core basic capabilities such as cold chain logistics and intelligent sorting, and improved the user experience through high-quality supply, further improving the long-term development capabilities of retail business.
02 R&D investment increased to 5.4 billion yuan, automatic delivery helped upgrade retail experience
In the third quarter, in addition to actively assisting the digital transformation of life services and physical retail industries through technological innovation, also continued to deepen its efforts in the field of automatic delivery, and the quarterly R&D investment increased to about 5.4 billion yuan.
In order to better serve consumers, Meituan continues to expand new scenarios for automatic delivery.
On October 28, Shenzhen Window of the World and Jinxiu China announced a cooperation with Meituan UAV, and will open the first scenic spot in the country's pop-up UAV convenience store from now until November 6.
In addition, at the 5th CIIE, Meituan UAV and JLL, a Fortune 500 company in the world, announced the conclusion of the " strategic cooperation intention agreement". The two parties will combine JLL's market and property resources, as well as Meituan UAV's high-tech equipment and distribution services, jointly explore new paths for technology to empower real estate services and realize the overall upgrade of smart real estate. This is also the first drone distribution cooperation project in the industry for commercial and office building cluster scenarios.
At the same time, Meituan UAV is also constantly enriching its service content, and has successively reached cooperation with dozens of brands such as Baiguoyuan , , Fulaomian , Manner, and can provide users with thousands of product choices in different categories such as meals, drinks, fresh fruits, etc. As of November 2022, Meituan drone delivery has been launched in 5 business districts, with routes covering 18 communities and office buildings, serving nearly 20,000 households, and completing orders for real users for over 100,000 orders.
In this regard, Meituan CFO Chen Shaohui said: "In the third quarter, the new retail format represented by instant retail brought dual benefits of experience upgrades and digital transformation to consumers and physical businesses. As the trend of deep integration of digital technology and the real economy further accelerated, we have become more determined by the huge value brought by technology to the industry and society. In the future, Meituan will continue to strengthen core capabilities building around users, merchants, riders and upstream and downstream partners, and strive to create long-term value for industry participants."
03 Wang Xing responded that Tencent sold Meituan shares and tried the waters of Hong Kong takeaway business
At Meituan's third-quarter financial report performance meeting for the release of Meituan's third-quarter financial report, Meituan CEO Wang Xing responded to Tencent's reduction of holdings in Meituan, saying that Meituan will continue to maintain cooperation with Tencent in strategy and operations.
Wang Xing said that many Tencent’s institutional investors are also our investors, which shows that we have close cooperation with Tencent, and we will maintain dialogue with shareholders to create long-term value for investors. ”
In addition, regarding Meituan's trial of takeaway business in Hong Kong, Wang Xing said that Meituan will continue to explore the mainland Chinese market and will also go to markets in other regions. At present, Meituan's market trial in Hong Kong is not large, and the services of the two places are also different. The team also needs to adjust the existing business model to cope with new markets.
Meituan's third quarter financial report released shows that the company's revenue in the third quarter was 62.62 billion yuan, a year-on-year increase of 28.2%. Net profit was 1.22 billion yuan, a year-on-year turnover of losses, with an estimated loss of 990 million yuan; the adjusted net profit was 3.53 billion yuan.
From the perspective of specific business, Meituan’s core local commercial branches (including the original catering takeaway and in-store, hotel and tourism branches, as well as Meituan flash purchases, homestays and transportation ticketing, etc.) have revenue of 46.3 billion yuan, an increase of 24.6% year-on-year. Operating profit was 9.3 billion yuan, an increase of 124.6% year-on-year. Meituan’s new business segment revenue was 16.3 billion yuan, a year-on-year increase of 39.7%; operating loss slightly narrowed to 6.8 billion yuan month-on-month , and the operating loss rate improved to 41.6%.
As of September 30, 2022, Meituan's cash and cash equivalents and short-term financial management investments were RMB 23.3 billion and RMB 88.3 billion respectively.
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