Total revenues of Meituan increased by 17.7% year over year to RMB114.8 billion in 2020 from RMB97.5 billion in 2019. Its food delivery and in-store, hotel & travel segments achieved an aggregate operating profit by a segment of RMB11.0 billion in 2020, an increase from RMB9.8 billion in 2019.
Both adjusted EBITDA and adjusted net profit experienced negative year-over-year growth and decreased to RMB4.7 billion and RMB3.1 billion in 2020, respectively. Meituan’s operating cash flow increased to RMB8.5 billion in 2020 from RMB5.6 billion in 2019.
It had cash and cash equivalents of RMB17.1 billion and short-term treasury investments of RMB44.0 billion as of December 31, 2020, compared to the balances of RMB13.4 billion and RMB49.4 billion, respectively, as of December 31, 2019.
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Food delivery
In 2020, GTV of its food delivery business increased by 24.5% year over year to RMB488.9 billion.
The growth rate for the number of food delivery transactions continued to surge year over year, with the daily average number of food delivery transactions increasing by 16.0% year over year to 27.7 million.
The average value per order of its food delivery business increased by 7.0% year over year to RMB48.2. The monetization rate of its food delivery business decreased to 13.6% from 14.0% in 2019.
As a result, revenue increased by 20.8% year over year to RMB66.3 billion.
Operating profit from the food delivery business increased to RMB2.8 billion in 2020 from RMB1.4 billion in 2019, while operating margin increased to 4.3% from 2.6%.
For the fourth quarter of 2020, GTV of its food delivery business increased by 39.4% year over year to RMB156.3 billion. The daily average number of food delivery transactions increased by 33.0% year over year to 36.2 million.
The average value per order of its food delivery business increased by 4.8% year over year to RMB46.9. The monetization Rate of its food delivery business decreased to 13.8% from 14.0% in the same period of 2019. As a result, revenue increased by 37.0% year over year to RMB21.5 billion. Operating profit from its food delivery business increased to RMB882.4 million for the fourth quarter of 2020 from RMB482.8 million for the fourth quarter of 2019, while operating margin increased to 4.1% from 3.1%.
In-store, hotel & travel
Revenues from its in-store, hotel & travel businesses decreased by 4.6% year over year to RMB21.3 billion in 2020. Operating profit from its in-store, hotel & travel businesses decreased to RMB8.2 billion in 2020 from RMB8.4 billion in 2019, while operating margin increased to 38.5% from 37.7%.
For the fourth quarter of 2020, revenues from its in-store, hotel & travel businesses increased by 12.2% year over year to RMB7.1 billion, despite the reoccurrence of the COVID-19 pandemic in several cities.
Operating profit from its in-store, hotel & travel businesses increased to RMB2.8 billion from RMB2.3 billion for the fourth quarter of 2019, while operating margin increased to 39.5% from 36.7%.
With respect to Meituan’s hotel booking business, domestic room nights consumed on its platform declined by 9.7% year over year in 2020.
Meituan platform’s high-star hotel supply and bookings both expanded, with high-star hotels accounting for an increasing share of its total hotel supply and its number of high-star hotel room nights accounting for more than 15% of its total room nights in the fourth quarter.
Among total domestic room nights consumed on its platform, the number of room nights from five-star hotels increased by more than 110% year over year in the fourth quarter.
New initiatives and others
During 2020, Meituan continued to ramp up its investments in new initiatives, especially in areas that Meituan believed to have promising long-term growth potential and fit well into its “Food + Platform” strategy.
Revenues from the new initiatives and others segment increased by 33.6% year over year to RMB27.3 billion in 2020. Operating loss from new initiatives and others segment expanded to RMB10.9 billion 2020 from RMB6.7 billion in 2019, while operating margin decreased 6.7 percentage points year over year.
For the fourth quarter of 2020, revenues from the new initiatives and others segment increased by 51.9% year over year to RMB9.2 billion. Operating loss for the segment increased both year over year and quarter over quarter to negative RMB6 billion in the fourth quarter of 2020, while the operating margin decreased to negative 64.9%.
The digitization of the broader local retail industry accelerated during 2020. The retail business has important strategic value to Meituan and was the key investment area.
During the fourth quarter, Meituan quickly expanded its community e-commerce model “Meituan Select” in around 2,000 cities and counties. As a result, Meituan Select now covers more than 90% of the cities and counties in China.
While this business is still at an early stage, Meituan believes that it can create tremendous value for consumers and up-stream suppliers, including farmers. Through its efforts to build out its supply chain and “next-day” delivery capabilities, this business model provides users with broader SKU selections, much more convenient shopping experience and lower prices, and in turn, allows them to acquire a vast new user base in less accessible and rural areas.
During the fourth quarter, through cooperation with many local governments across the country, Meituan launched the “Agricultural Produce Direct Sourcing” program in some pilot areas such as Yunnan, Jilin, and Guangxi, to source produce directly from farmers to reduce intermediary costs, improve its supply chain efficiency, help farmers generate additional revenues, and lower product prices for consumers.
Meanwhile, Meituan also made upfront planning and investment in infrastructure including warehousing and fulfillment during the quarter, to ensure that Meituan can handle large volumes of agricultural products smoothly and deliver them in optimal condition timely even to lower-tier markets.
Its marketplace model “Meituan Instashopping” achieved stellar growth as Meituan continued to broaden and diversify its merchant base, build out its marketplace capabilities, and convert more food delivery consumers into non-food categories consumers.
High-potential verticals, such as flowers, medicine and more, continued to achieve rapid growth as Meituan continued to bring more quality suppliers and merchants online and encourage user consumption through effective marketing.
As a result, Meituan Instashopping’s daily peak orders reached around 4.5 million in the fourth quarter.
For its self-operated model, “Meituan Grocery,” as Meituan continued to increase coverage density across Beijing, Shanghai, Guangzhou and Shenzhen, both the quarterly transacting users and transaction volume grew rapidly during the fourth quarter.
