Total Gross Transaction Volume (GTV) on Meituan platform grew by 33.6% to RMB194.6 billion in Q3 2019 from RMB145.7 billion for Q3 2018 according to its financial results. Annual Transacting Users on Meituan platform grew by 14.0% to 435.8 million from 382.3 million in Q3 2018.
The average number of transactions per annual transacting user on Meituan platform increased to 26.5 transactions in the twelve months ended September 30, 2019 from 22.7 transactions in the twelve months ended September 30, 2018.
Annual active merchants on Meituan platform grew by 8.8% to 5.9 million in the twelve months ended September 30, 2019, from 5.5 million in Q3 2018. Overall monetization rate increased to 14.1% for Q3 2019 from 13.1% for Q3 2018.
Meituan total revenues increased by 44.1% year-over-year to RMB27.5 billion from RMB19.1 billion for the same period of 2018, and increased by 21.1% quarter-over-quarter from RMB22.7 billion for the second quarter of 2019. Revenues increased across all business segments.
Total gross profit increased by 109.8% year-over-year to RMB9.6 billion from RMB4.6 billion for Q3 2018, and increased by 20.8% quarter-over-quarter from RMB7.9 billion for the second quarter of 2019. Selling and marketing expenses as a percentage of total revenues decreased to 20.4% from 24.2% for Q3 2018, and increased from 18.3% for Q2 2019.
Adjusted EBITDA and adjusted net profit were RMB2.3 billion and RMB1.9 billion, respectively.
Meituan Food delivery
GTV of Meituan food delivery business increased by 40.0% to RMB111.9 billion for Q3 2019 from RMB80.0 billion in Q3 2018. The number of food delivery orders increased by 38.1% to 2.5 billion for Q3 2019 from 1.8 billion in Q3 2018.
The average value per order of Meituan food delivery business increased by 1.3% year-over-year. Monetization Rate of Meituan food delivery business for Q3 2019 remained stable year-over-year. As a result, revenue from Meituan food delivery business increased by 39.4% year-over-year to RMB15.6 billion for Q3 2019 from RMB11.2 billion in Q3 2018.
Gross profit from Meituan food delivery business increased by 64.5% to RMB3.0 billion for Q3 2019 from RMB1.9 billion in Q3 2018 while the gross margin expanded to 19.5% from 16.6%. Although gross margin decreased by 2.8 percentage points on a quarter-over-quarter basis due to unfavorable weather conditions, Meituan was able to achieve a positive adjusted operating profit for Meituan food delivery business for Q3 2019.
Meituan year-over-year growth rate of the number of food delivery transactions accelerated on a sequential basis during Q3 2019, with the average number of daily food delivery transactions increasing by 38.1% year-over-year to 26.8 million.
Meituan introduced an online marketing design tool to automatically generate customized banner designs for restaurants in the third quarter of 2019.
Meituan in-store, hotel & travel
The growth of GTV of Meituan in-store, hotel & travel businesses accelerated for Q3 2019, growing by 29.4% to RMB63.9 billion for Q3 2019 from RMB49.3 billion in the same period of 2018.
Monetization Rate increased to 9.7% from 9.0% year-over-year. Revenues from Meituan in-store, hotel & travel businesses increased by 39.3% to RMB6.2 billion for Q3 2019 from RMB4.4 billion in the same period of 2018.
Gross profit from Meituan in-store, hotel & travel businesses increased to RMB5.5 billion for Q3 2019 from RMB4.0 billion in the same period of 2018 while gross margin slightly declined to 88.6% from 90.6% year-over-year, but remained flat quarter-over-quarter.
Meituan launched the “Super Brand Food Festival” to promote fast food and in-store snacks and drinks from branded restaurants. During this festival, more than 60,000 stores under 124 well-known restaurant brands in 948 cities participated in this promotion, generating substantial sales of ice creams, coffee, desserts, and others.
In addition, Meituan launched the “Chinese Valentine’s Day Special Campaign” across all categories on Meituan platform, including in-store dining, hotel, travel, beauty, leisure, and entertainment.
During this promotion, the volume of restaurant reservations on Meituan platform increased by more than 300% compared with the corresponding period in prior years. Pre-holiday shopping categories, including beauty salons, spa and flower shops, and entertainment services, including overseas travel and theme parks, all enjoyed a substantial improvement in consumer traffic and engagement.
Moreover, Meituan also held the “2019 Parent-Child Fantasy Day” celebration in Shanghai and over 100 renowned parent-child brands from 79 categories participated in the event, including entertainment, education, photography, restaurants, and toys.
With respect to Meituan hotel booking business, Meituan further strengthened Meituan leading position for Q3 2019. The number of domestic room nights consumed on Meituan platform for Q3 2019 increased by 44.4% year-over-year, surpassing 100 million quarterly room nights for the first time and the average daily rate per room night also experienced a steady year-over-year increase.
Meituan continued to develop mutually beneficial collaborations with more hotels in lower-tier cities and enhanced Meituan efforts on cross-selling hotel booking services to existing users on Meituan platform for Q3 2019, which led to the accelerated growth of domestic room nights.
Furthermore, Meituan “Hotel+X” campaign launched in April 2019 continued to stimulate the growth of Meituan high-end hotel booking business and help high-end hotels promote their non-lodging services, such as restaurants, wedding venues, spa, and gyms, thereby further substantiating their revenue streams. As a result, the revenue contribution from high-end hotels further increased year-over-year for Q3 2019.
New initiatives and others
Revenues from the new initiatives and other segments increased by 65.4% to RMB5.7 billion for Q3 2019 from RMB3.5 billion in the same period of 2018.
Gross profit of the new initiatives and other segments was positive RMB1.1 billion for Q3 2019, compared to negative RMB1.3 billion for the same period last year. Gross margin was 18.7% for the third quarter of 2019, improving from negative 37.4% in the same period of 2018.
During Q3 2019, with respect to Meituan bike-sharing services, Meituan gradually replaced some of the older version bikes with the new Meituan Bikes, which are the new model of bikes painted in the color of Meituan Logo with longer life span and user experience improvements.
In addition, operating losses continued to narrow meaningfully from that for the second quarter of 2019, mainly attributable to the significant reduction in depreciation because some bikes reached the end of their useful lives during Q3 2019, while the new Meituan Bikes in replacement also led to lower depreciation.
Consumers must unlock these new bikes through Meituan super app, which helps to enhance Meituan brand image, direct more traffic to Meituan super app, and create more opportunities for cross-selling other local services.
Car-hailing services. While Meituan continued to optimize the operations of the Meituan self-operated model in Shanghai and Nanjing, it has explored the aggregated model in more cities.
With respect to Meituan restaurant management system business, Meituan focus remains on optimizing products and increasing the coverage of high-quality merchants to lay a better foundation for future monetization. For Q3 2019, the number of high-quality merchants continued to grow both year-over-year and quarter-over-quarter.
With respect to Meituan grocery retail business, Meituan continued Meituan prudent exploration to better capture the opportunities in this space. With respect to Meituan self-operated Meituan Grocery model, it increased warehouse density in the few cities that Meituan currently operates in.
With respect to the marketplace model, Meituan Instashopping, Meituan also started pilot programs in ten traditional farm markets in Wuhan, helping merchants digitize their fresh product inventories and providing them with on-demand delivery services and guidance on SKU selection, pricing and traffic attraction. Meanwhile, Meituan continued to experience strong growth in high-ticket categories, such as flower and medicine categories, in Meituan marketplace model.
