On October 9, STAR Market Daily learned from inside sources at Meituan that the company’s on-demand delivery business unit is preparing to enter the Hong Kong market, and it is currently recruiting staff. Bloomberg also reported that an individual familiar with the matter said that Tony Qiu, the former head of internationalization at Kuaishou who joined Meituan earlier this year, would be made responsible for international expansion. Meituan has not yet responded regarding the matter.
Bloomberg reported that when Tony Qiu was hired in July, it was speculated that Beijing-based Meituan had ambitions to expand into the international market. For almost every large-scale consumer tech firm China, the growth rate of the domestic market has slowed down, and the economy has lost energy. The government’s strengthening supervision on large technology enterprises has led to limited room for expansion of the domestic market in the future. Pinduoduo, a leading Chinese e-commerce platform, recently took its first overseas expansion move with the launch of a new business called Temu in the US.
At the end of August, Meituan released second quarter and semi-annual results of 2022 as of the end of June this year, showing losses in the first half of the year. The report shows that in the second quarter, the company achieved revenue of 50.9 billion yuan ($7.4 billion), a year-on-year increase of 16.4%. It realized an operating loss of 493 million yuan, a year-on-year reduction of 84.8%. The loss during the period was 1.116 billion yuan, a year-on-year reduction of 66.7%. The adjusted profit was 2.058 billion yuan, thus turning losses into profits.
In the first half of this year, the company achieved revenue of 97.207 billion yuan, a year-on-year increase of 20.3%. It also realized an operating loss of 6.077 billion yuan, a year-on-year reduction of 24.2%. The loss during the period was 6.819 billion yuan, a year-on-year reduction of 16.9%. The adjusted net loss was 1.528 billion yuan, a year-on-year decrease of 75.0%.
In the financial report, Meituan divided its business into two main parts: core local business and new business, and its losses in the first half of the year still mainly came from new business segments. According to the financial report, the core local business contributed 12.966 billion yuan of operating profit to Meituan in the first half of the year, up 35.9% year-on-year, while the new business segments achieved an operating loss of 15.243 billion yuan in the same period, even surpassing the profit realized by core local business, but they still reduced the loss by 7.8% compared with the same period last year.