Meituan‘s consumer finance company was recently reported to be established in Shenzhen this year. The Luohu District of Shenzhen processes applications for finance-related business licenses. A Meituan representative stated, “We have no clear short-term plan or goal for the specific license application. We will operate the finance business in strict accordance with regulatory requirements.”
Meituan has kept a low profile in the finance and banking business since early 2015. In 2016, Meituan was reported to be engaged in third-party payment and settlement activities without a license. At the time, the People’s Bank of China ordered rectification within three months. Subsequently, Meituan began to collect financial licenses for commercial factoring (acting as an intermediary between the buyer and the seller to be responsible for payments, credit rating, and account management), third-party payment processing, small online loans, private banking, and insurance brokering.
In September 2016, Meituan spent 1.3 billion yuan ($190 million) to acquire Qiandai.com and gain its payment processing license. In November of the same year, Meituan established Chongqing Sankuai Microfinance Co., Ltd. and obtained its microfinance license. In December of the same year, Yilian Bank was approved for a private banking license, and a company controlled by Meituan founder Wang Xing holds a 28.5% stake. In February 2018, an insurance agency under Meituan obtained an insurance license.
The “wallet” interface on the Meituan platform shows three current major products: Money Lending, Monthly Payments, and Credit Cards.
In the second half of 2016, Meituan partnered with Merchants Union Consumer Finance Company Limited to launch its loans business. In 2017, Meituan launched a micro-cash loan product, and in May 2020, it launched a credit payment product similar to Alipay’s Huabei and JD.com‘s Baitiao.
However, it cannot be ignored that Meituan is a latecomer to the finance business and face strong competitors including Tencent and Alibaba. Nevertheless, Meituan co-branded credit cards became a major success. In September 2018, Meituan partnered with Qingdao Bank to issue the first joint credit card. After two years, in October 2020, Meituan had issued over 10 million co-branded credit cards. Meituan has gained partnership interest from at least 14 banks.
Micro-credit falls under Meituan‘s “new business” segment. According to its semi-annual report of 2022, as of June last year, the unaudited loans receivable in non-current assets was about 1.556 billion yuan ($228.3 million), an increase of about 534 million yuan ($78.4 million) compared with the end of 2021. Loans receivable in current assets was about 7.379 billion yuan ($1.1 billion), an increase of about 2.56 billion yuan ($375.6 billion) compared with the end of 2021. As of June 2022, Meituan‘s microfinance business carried a total loan balance of about 8.935 billion yuan ($1.3 billion).