Meituan Announces Q2 Results, Faces Investigation From Market Regulator

Chinese food delivery giant Meituan announced on Monday the financial results for the second quarter of 2021. The State Administration for Market Regulation announced on the same day that it had investigated Meituan‘s failure to report its acquisition of Mobike in accordance with the law.

Meituan has 628.4 million annual transacting users and 7.7 million annual active merchants as of June 30, 2021. The company operates in over 2,800 cities and counties in China, the report shows.

For the second quarter of 2021, Meituan continued to show strong growth momentum with revenues increasing by 77% to 43.8 billion yuan ($6.8 billion) from 24.7 billion yuan for the same period of 2020. Both adjusted EBITDA and adjusted net loss experienced negative year-over-year growth for the second quarter of 2021 and decreased to negative 1.2 billion yuan and 2.2 billion yuan, respectively.

“As the Chinese economy continues to recover steadily, our various business segments have maintained healthy growth in the second quarter of 2021. The recent new regulatory environment change reminded ourselves of our role in society and has compeled us to innovate and better contribute to society at large,” said Wang Xing, Meituan‘s Founder and CEO.

However, Meituan warned it could be required to pay “a significant amount” of antitrust fines due to the ongoing investigation from April.

During the second quarter of 2021, the gross transaction value of the company’s food delivery business increased by 59.5% year-over-year to 173.6 billion yuan. Further, the daily average number of food delivery transactions increased by 58.9% year-over-year to 38.9 million.

On the merchant side, Meituan continued to list high-quality restaurants, as well as small and medium-sized merchants by launching a new “Food Delivery Manager” program, aiming to help small and medium-sized merchants adapt to online operations.

The giant’s in-store, hotel & travel segment’s revenue grew by 89.3% year-over-year to 8.6 billion yuan in the second quarter of 2021. For hotel booking, Meituan’s domestic room nights surpassed 140 million, representing a stellar 81% year-over-year growth.

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The company also expanded investments into new initiatives, especially retail. Revenues from the new initiatives and others segment increased by 113.6% year-over-year to 12 billion yuan, primarily driven by the growth in its retail businesses, B2B food distribution services, and bike-sharing and moped services.