China’s largest food delivery firm Meituan posted a bigger-than-expected 22.4% rise in third-quarter revenue on Friday, defying sluggish Chinese consumption.
Meituan, which has an app that provides services as varied as bike-sharing, ticket-booking and maps, reported revenue in the three months to Sept. 30 at 93.58 billion yuan ($12.94 billion), up from 76.47 billion yuan in the same period a year earlier.
Its net profit for the quarter hit 12.86 billion yuan, increasing from a profit of 3.59 billion yuan a year earlier.
Penny-pinching Chinese consumers have led to low-cost and discounted products becoming the focus for shoppers and platforms alike, benefiting Meituan, which delivers the goods for a small fee.
Beyond Mainland China, Meituan has also begun looking abroad for growth, launching Keeta in Hong Kong in 2023 and expanding that food delivery service to Saudi Arabia in recent months.
Meituan CEO Wang Xing said that while it was too soon to draw conclusions (Keeta only launched in Riyadh in October) they had already seen some “very encouraging results”.
“It’s very clear global expansion will be our long-term strategy,” he said. “At the same time we are not going to rush into anything, we need to be very patient and make sure every decision we make is well-informed.”
Wang added they would focus on Saudi Arabia for now before deciding whether to move into any other Middle East markets.
Meituan’s revenue from core local commerce, which includes food delivery and non-food delivery service Meituan Instashopping, rose 20.2% to 69.37 billion yuan.
Sales from new initiatives grew 28.9% to 24.2 billion yuan.
Meituan shares closed down 2% ahead of the results. They are up almost 106% so far this year, compared with a 15% rise in the benchmark Hong Kong index.
Meituan is China’s biggest delivery platform, with a 69% share of the 1 trillion yuan market, according to data from researcher ChinaIRN.
Reuters
