World’s largest food delivery platform Meituan turns profitable in Q2, but growth slows

Its new initiatives including bike-sharing and ride-sharing post the fastest growth.

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China’s on-demand service provider Meituan-Dianping disclosed Friday that it collected RMB 1.5 billion (USD 211.9 million) in adjusted net profit, the first quarterly gain since it went public in Hong Kong last year.

In the first quarter of this year and in 2018, Meituan had booked adjusted net losses of RMB 1 billion and RMB 8.5 billion respectively.

The company’s total gross profit increased by 179.5% year-over-year to RMB 7.9 billion in the second quarter, resulting from growth in business scale, continuous improvement of gross margin in food delivery, and narrowing losses in new businesses.

Meituan said it made RMB 22.7 billion in total revenue in the second quarter of this year, up 50.6% year-on-year, benefiting from strong revenue growth across all major business segments.

While the growth rate for total revenue is still substantial, it’s no longer at the scale of the year-on-year growth rate of 70.1% in the first quarter and the year-on-year growth rate of 92.3% in 2018.

In a breakdown, Meituan made RMB 12.8 billion in revenue from its food delivery business in the second quarter, up 44.2% year-on-year. In-store, hotel and travel business contributed RMB 5.2 billion in revenue, up 42.8% year-on-year while new initiatives and others, including bike-sharing and ride-sharing, generated 4.6 billion in revenue, up 85.1% year-on-year.