Chinese food delivery giant Meituan’s revenue climbed 22.6% on the year to RMB 73.7 billion (USD 10.19 billion) for the fourth quarter in results released on March 22, lifted by growth in regular users.
Analysts had forecasted RMB 72.5 billion (USD 10 billion), according to LSEG Data & Analytics (formerly known as Refinitiv).
Hungry customers have driven Meituan’s food delivery service, even in China’s still-slow economic recovery.
The number of users and merchants accelerated their growth to set new records in the fourth quarter, Meituan CEO Wang Xing said on an earnings call. Daily active users grew more than 30% on the year, he said. Daily order volume in on-demand delivery rose 23.9% to 60 million in 2023.
Getting food in 30 minutes has become a new lifestyle in China, Wang said.
The company offers a variety of services, such as food delivery, the Meituan Instashopping e-commerce service, ticket-booking and bike-sharing. Delivery services contributed RMB 21.9 billion (USD 3 billion) to fourth-quarter revenue, up 10.9% on the year. The second-largest revenue driver was “other services and sales,” which contributed RMB 20.8 billion (USD 2.8 billion).
Meituan’s full-year revenue for 2023 climbed 25.8% to RMB 276.7 billion (USD 38.2 billion). The company logged a profit of RMB 13.9 billion (USD 1.9 billion), turning around from the RMB 6.7 billion (USD 926.3 million) loss of 2022.
The company’s hotel and travel business has also grown, riding the domestic travel rebound post-Covid-19. Meituan said its expanded effort in marketing and promotions led to “record high reservation volume during holiday seasons” in 2023.
Sales from new initiatives grew 11.5% on the year to RMB 18.6 billion (USD 2.5 billion) in the fourth quarter. This included services such as the former Meituan Grocery, now known as Xiaoxiang Supermarket.
The Chinese delivery service giant is eyeing expansion but will be cautious and conservative.
“We are very actively evaluating other opportunities in other markets,” Wang said.
“I think our cash reserves and our free cash flow generated by our domestic business will be helpful,” he said. “At the same time, we will be very disciplined in evaluating the ROI. We are not going to do some crazy all-in.”
“I think we are going to get there,” Wang said. “We are in no hurry. We will take many years. We will be very careful in evaluating the opportunity and evaluating our approaches.”
Meituan debuted a new food delivery brand called Keeta in the Hong Kong market last year. The app has since become Hong Kong’s second-largest food delivery platform, according to Bloomberg.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.