Meituan’s Q2 Performance: Growth Amid Challenges
In the second quarter of 2024, Meituan reported revenue of RMB 91.84 billion, marking an 11.7% year-on-year increase. However, adjusted net profit saw a significant drop of 89%, landing at RMB 1.49 billion. This contrast between top-line growth and shrinking profitability underscores the intense competitive pressures in China’s food delivery and local services markets. Unlike the confident tone in Q1, Meituan’s leadership adopted a more cautious stance during the latest earnings call. CEO Wang Xing acknowledged the fierce competition but reaffirmed the company’s commitment to defending its market leadership through strategic focus and operational excellence.
Key Financial Metrics
– Revenue: RMB 91.84 billion (up 11.7% YoY) – Adjusted Net Profit: RMB 1.49 billion (down 89% YoY) – Core local commerce and new initiatives both contributed to growth, though margins were impacted by competitive investments.
Wang Xing’s Take on Food Delivery Competition
Wang Xing emphasized that Meituan is no stranger to intense competition. He stated, “Meituan grew out of competition. We have achieved our leading position through sustained competitive dynamics.” Rather than engaging in what he termed “internal volume” (内卷), Meituan’s strategy revolves around doing the “right things”: ensuring high-quality supply, stable delivery履约, and reasonable pricing to create the best user experience. He argued that while competitors might resort to aggressive short-term tactics like subsidies, sustainable advantage comes from operational superiority and ecosystem building. “After all the flashy moves, everything returns to essence: ensuring fast and reliable履约 and affordable prices,” Wang noted.
Long-Term Vision Over Short-Term Tactics
Wang made it clear that Meituan’s playbook is centered on long-term value creation. The company will continue investing in consumer habits, merchant partnerships, and rider benefits—elements that he believes are crucial for enduring success.
Instant Retail and Low-Tier City Growth
One of the standout performers in Meituan’s portfolio has been its instant retail business, which saw a 50% year-on-year increase in lower-tier cities. Wang Xing attributed this growth to Meituan’s ability to offer differentiated supply, expand product categories, and innovate in供应链. He expressed optimism about the overall industry’s potential, noting that “the instant retail market is much larger than most people initially imagined.” While acknowledging that rival investments could help raise industry penetration, he cautioned that subsidies alone cannot build a sustainable business.
Profitability vs. Growth Priority
Although Meituan’s flash delivery service (Meituan Instashopping) has been profitable for several consecutive quarters, Wang stated that the company would prioritize growth over profitability in the near term to maintain its competitive edge. He also indicated that subsidies would not drop significantly in the current quarter but would gradually reduce over time.
Global Expansion: Keeta and Brazil Entry
Meituan’s international ventures, particularly Keeta, have shown promising results. Wang Xing revealed that Keeta achieved robust growth in order volume and Gross Transaction Value (GTV) during the quarter. He outlined ambitions for Keeta to become a global business, with a long-term target of reaching RMB 100 billion in GMV within a decade. The company is also preparing to enter Brazil, a move that Wang described with confidence. He highlighted that Meituan’s overseas expansion, which began in 2023, has already yielded significant wins: – No. 1 market share in Hong Kong – Top-two player in Saudi Arabia – Local team already established in Brazil
Measured Global Approach
Despite the optimism, Wang stressed that Meituan would not rush its international expansion. The company remains open to global opportunities but will proceed with patience and strategic precision.
Ecosystem Strategy: Benefiting All Stakeholders
A recurring theme in Wang’s commentary was the importance of ecosystem building. He reiterated that Meituan’s mission is to ensure that consumers, merchants, and riders all benefit from the platform’s growth. This, he argued, is the foundation of long-term resilience against competition. By focusing on supply-side optimization, consumer habit formation, and reliable履约, Meituan aims to create real incremental demand rather than merely shifting existing demand through subsidies.
The Road Ahead for Meituan
Wang Xing’s commentary reflects a company that is both confident in its historical ability to thrive amid competition and realistic about current challenges. While short-term profitability may be under pressure, Meituan’s strategy is clearly oriented toward sustained growth, geographic expansion, and ecosystem strengthening. For investors and industry observers, the key takeaway is that Meituan is playing the long game. Its focus on doing the “right things”—rather than pursuing flashy short-term wins—may well determine its future in an increasingly crowded and competitive market. As Wang Xing put it, “We will stay patient.” For further details, you can read the full earnings report on Meituan’s official investor relations page.