Total Gross Transaction Volume (GTV) on Meituan Dianping’s e-commerce platform grew by 28.7% to RMB159.2 billion in Q2 2019 from RMB123.7 billion in Q2 2018. Annual transacting users in the last twelve months ended June 30, 2019 grew by 18.4% to 422.6 million from 356.9 million in the last twelve months ended June 30, 2018.
The average number of transactions per annual transacting user on Meituan platform increased to 25.5 transactions in the twelve months ended June 30, 2019, from 21.4 transactions in the twelve months ended June 30, 2018.
Annual Active Merchants on its platform grew by 16.2% to 5.9 million in the 12 months ended June 30, 2019 from 5.1 million in the 12 months ended June 30, 2018.
Overall monetization rate increased to 14.3% in the three months ended June 30, 2019, from 12.2% in the same period of 2018.
Meituan Dianping Finance Highlights Q2 2019
Total revenues increased by 50.6% year-over-year to RMB22.7 billion from RMB15.1 billion in the same period of 2018 and increased by 18.4% quarter-over-quarter from RMB19.2 billion in Q1 2019, benefiting from strong revenue growth across all major business segments.
Total gross profit increased by 179.5% year-over-year to RMB7.9 billion from RMB2.8 billion in the same period of 2018 and increased by 56.6% quarter-over-quarter from RMB5.1 billion in Q1 2019, resulting from growth in its business scale, continuous improvement of its gross margin in food delivery, and narrowing losses in its new businesses.
Selling and marketing expenses as a percentage of total revenues decreased to 18.3% from 25.7% in the same period of 2018 and 19.3% in the three months ended March 31, 2019, as Meituan further enhanced operating leverage across all of its business segments and optimized branding and marketing spending.
Adjusted EBITDA and adjusted net profit were RMB2.3 billion and RMB1.5 billion, respectively. Following a positive adjusted EBITDA in the three months ended March 31, 2019, Meituan achieved both positive adjusted net profit on a consolidated basis and positive adjusted operating profit in the food delivery segment in Q2 2019, attributable to its ongoing efforts to improve the operating margin of the core businesses, narrower operating losses in its new initiatives and seasonality.
Meituan Dianping Business Highlights Q2 2019
Meituan Food Delivery
In Q2 2019, Meituan further strengthened its market-leading position while simultaneously improving the financial performance of the food delivery business. Its food delivery business sustained its strong growth momentum and achieved a positive adjusted operating profit for the first time.
GTV of its food delivery business increased by 36.5% to RMB93.1 billion in Q2 2019 from RMB68.2 billion in Q2 2018. The number of food delivery orders increased by 34.6% to 2.1 billion in Q2 2019 from 1.5 billion in Q2 2018.
The average value per order of its food delivery business improved by 1.4% year-over-year. Monetization rate of the food delivery business increased to 13.8% from 13.1% year-over-year. As a result, revenue from the food delivery business increased by 44.2% year-over-year to RMB12.8 billion in Q2 from RMB8.9 billion in Q2 2018.
Gross profit from its food delivery business increased by 102.8% to RMB2.9 billion in Q2 2019 from RMB1.4 billion in Q2 2018, while the gross margin expanded to 22.3% from 15.8%.
In June 2019, Meituan also launched a joint membership program with Tencent Video, and it plans to explore cooperative opportunities and partnerships with more ecosystem partners in the future to further enrich its membership benefits.
In-store, hotel & travel
During Q2 2019, Meituan continued to strengthen the market leadership of its in-store, hotel & travel businesses, which demonstrated further strong monetization potential. GTV of its in-store, hotel & travel businesses grew by 20.7% to RMB51.3 billion in Q2 2019 from RMB42.5 billion Q2 2018, and the monetization rate increased to 10.2% from 8.6%.
Revenues from its in-store, hotel & travel businesses increased by 42.8% to RMB5.2 billion in Q2 2019 from RMB3.7 billion Q2 2018.
Gross profit from its in-store, hotel & travel businesses increased to RMB4.7 billion in Q2 2019 from RMB3.3 billion Q2 2018, while the gross margin slightly declined to 88.8% from 90.8%, primarily attributable to the increases in depreciation of property, plant, and equipment, and bandwidth and server custody fees due to a database improvement project and the increase in online traffic costs to support online marketing revenue growth.
Meituan continued to see robust revenue growth in this segment, mainly attributable to increasing revenue from its online marketing services.
In Q2 2019, the number of active marketing merchants in this segment grew by more than 50% year-over-year, and the average revenue per active marketing merchant continued to grow steadily. Meanwhile, Meituan continued to enhance product offering and launched promotional campaigns for its in-store, hotel & travel businesses to drive the growth of its transaction-based services.
Meituan launched the June 18 (618) Marketing Festival in the second quarter to enable local service merchants to increase their brand exposure and acquire online traffic. During the six-day June 18 Marketing Festival, transacting users in the medical aesthetic category contributed approximately RMB670 million GTV to the platform.
In Q2 2019, Meituan also expanded its Must Lists from the “Must-Eat List” to include the “Must-Shop List” for top shopping malls, the “Must-Visit List” for top tourist destinations and the “Must-Stay List” for top hotels and resorts, to enhance its brand awareness and influence among consumers and merchants across different service categories.
Must Lists were created based on authentic consumer feedback, aiming to provide consumers reliable guidance for local services. 171 shopping malls were selected for its “Must-Shop List,” 578 tourist attractions for its “Must-Visit List”, and 876 hotels and resorts for its “Must-Stay List.”
All of its recommended merchants enjoyed a substantial improvement in consumer traffic and engagement in Q2 2019. Meituan’s Must Lists have allowed its recommended merchants to generate higher sales, enhance brand influence, and improve their operations and product offering based on authentic and dynamic consumer reviews.
The success of its Must Lists further demonstrated its leadership as a comprehensive local search platform that helps consumers to discover and explore local life across a wide range of categories, including food, living, travel, shopping, and entertainment.
Domestic room nights consumed increased by 28.9% to 94.0 million in Q2 2019 from 72.9 million Q2 2018, and the average daily rate per room night experienced a steady year-over-year increase.
Furthermore, Meituan launched the “Hotel+X” campaign in April 2019 to stimulate the growth of its high-end hotel booking business and help high-end hotels to promote their non-lodging services, such as restaurants, wedding venues, spa, and gyms, thereby further substantiating their revenue streams. As a result, the contribution from high-end hotels further increased year-over-year in Q2 2019.
Bike-sharing
Operating losses for Q2 2019 narrowed significantly from that for Q1 2019, mainly attributable to the significant reduction in depreciation as some bikes reached the end of their useful lives during Q2 2019 and will no longer result in any depreciation expenses, while new bikes have not all been put in place to replace them.
Moreover, Meituan continued to improve its pricing and started to moderately increase the charge per ride and the monthly subscription fee in several cities.
Car-hailing
By June 30, 2019, Meituan had rolled out the new aggregated model in a total of 42 cities, including Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou, Nanjing and Chengdu.
Meituan believes that adding the car-hailing services to its Meituan app will help us to further improve transaction frequency and the stickiness of its users.
Restaurant management system
Its focus remains on optimizing products and increasing the coverage of high-quality merchants to lay a better foundation for future monetization. In Q2 2019, the number of high-quality merchants continued to grow year-over-year.
Grocery retail
Meituan continued its prudent exploration to better capture the opportunities in this space, especially in fresh food retail, and to penetrate into other food consumption scenarios, such as home cooking. Meituan has made progress in Beijing and Shanghai for its self-operated model, which was launched in January 2019 and is known as Meituan Grocery, and recently expanded the business to Wuhan.