Meituan’s total revenues grew by 28.8% YoY in the third quarter of 2020 and its profit increased by 17.9% YoY. Its paying users increased to 476.5 million in Q3 with 6.3 million active merchants.
For the third quarter of 2020, GTV of its food delivery business increased by 36.0% year-over-year to RMB152.2 billion.
The daily average number of food delivery transactions increased by 30.1% year-over-year to 34.9 million. The average value per order of its food delivery business increased by 4.5% year-over-year.
The monetization rate of its food delivery business decreased to 13.6% from 13.9% in Q3 2019. As a result, revenue increased by 32.8% year-over-year to RMB20.7 billion for Q3 2020.
Operating profit from its food delivery business increased to RMB768.5 million for Q3 2020 from RMB330.9 million for Q3 2019 while the operating margin increased to 3.7% from 2.1%.
After accurately identifying the growing consumer preference for bubble tea, Meituan leveraged festivals, such as Chinese Valentines’ Day and bubble tea-themed marketing events, to provide consumers with a wide variety of attractive promotions during these periods.
In-store, hotel & travel
Revenues from its in-store, hotel & travel businesses increased by 4.8% year-over-year to RMB6.5 billion in Q3 2020. Operating profit from its in-store, hotel & travel businesses increased to RMB2.8 billion for Q3 2020 from RMB2.3 billion for the third quarter of 2019, while operating margin increased to 43.0% from 37.7%.
The year-over-year growth in both commission revenues and online marketing service revenues of the in-store segment turned positive this quarter.
With respect to its hotel booking business, as a result of China’s effective control measures and stronger traveling demands during the summer, cross-city and business travel both recovered well in comparison to previous quarters, with the year-over-year growth of domestic room nights consumed on its platform turning to positive 3.7% in Q3 2020.
Notably, consumers’ desire for leisure travel mostly recovered, while consumers’ preferred travel destinations shifted from overseas to domestic destinations, which allowed us to leverage its competitive advantages domestically.
In the meantime, as it continued to strengthen its cooperation with high-star hotels, the number of high-star hotels that it worked with increased substantially quarter over quarter. Its “Hotel+X” program also continued to expand, utilizing its differentiated value proposition to cover more hotel groups in the period.
New initiatives and others
Revenues from the new initiatives and others segment increased by 43.5% year-over-year to RMB8.2 billion in Q3 2020.
On a sequential basis, operating loss from the new initiatives and others segment expanded by 39% to RMB2.0 billion for Q3 2020 from RMB1.5 billion for the second quarter of 2020, while operating margin improved by 1.2 percentage points to negative 24.7% for Q3 2020 from negative 25.9% for the second quarter of 2020.
Operating loss from the new initiatives and others segment expanded by 68.8% on a year-over-year basis, while operating margin decreased by 3.7 percentage points year-over-year.
During Q3 2020, it continued to ramp up its investments in new initiatives, especially in areas that it believes to have promising long-term growth potential and fit well into its “Food + Platform” strategy.
Grocery retail business continued to be its top priority. its marketplace model “Meituan Instashopping” achieved stellar transaction volume growth during Q3 2020 on a year-over-year basis, as a result of steady user traffic growth, strong momentum in key SKU categories and improved marketing efficiency.
Notably, as part of its efforts to deliver everything to consumers’ homes, Meituan successfully expanded its category coverage while growing its key categories, such as flowers and medicine, during this quarter, with both medicine sales and flower sales ramping up substantially year-over-year.
In particular, by utilizing its online platform and on-demand delivery network, it aimed to provide more convenient solutions to consumers and create values within the medical system for its society at large, with the number of pharmacies operating on its platform increasing rapidly during this quarter.
Moreover, by leveraging its instant delivery infrastructure, it was able to deliver medicines in a timely manner to better satisfy the increasingly diverse healthcare needs of Chinese consumers.
For its self-operated model, “Meituan Grocery” as it continued to increase coverage density across Beijing, Shanghai, Guangzhou and Shenzhen, both the quarterly transacting users and transaction volume grew rapidly during this quarter.
During this quarter, it launched its community group-purchase model, “Meituan Select”, and continued to expand during the quarter. it remained focused on iterating its business model and building its key capabilities.
It also explored different methods of improving its warehouse efficiency and group leader management capabilities, while accumulating experiences with a wider variety of SKU products.
At the same time, it leveraged its existing supply chain resources and offline business development capabilities to further accelerate its pace of expansion, improve operating efficiency and enhance SKU management.
As a result, it was able to instill unique brand awareness with both consumers and group leaders as it ramp up its business scale.
Total revenues for Q3 2020 increased by 28.8% on a year-over-year basis and by 43.2% on a quarter-over-quarter basis to RMB35.4 billion.
Operating profit increased from RMB1.4 billion for Q3 2019 to RMB6.7 billion for this quarter, including RMB5.8 billion in fair value gain on investments in listed entities.
Operating margin increased from 5.3% in Q3 2019 to 19.0% for this quarter. Both adjusted EBITDA and adjusted net profit experienced positive year-over-year growth and improved to RMB2.7 billion and RMB2.1 billion, respectively.
Its operating cash flow decreased to RMB3.3 billion for Q3 2020 from RMB5.6 billion for the second quarter of 2020 due to an RMB2.0 billion decrease in working capital change.
It had cash and cash equivalents of RMB19.7 billion and short-term treasury investments of RMB33.7 billion as of September 30, 2020, compared to the balances of RMB13.9 billion and RMB44.5 billion, respectively, as of June 30, 2020.