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Meituan lost 1.7 billion in the first quarter, stepped up efforts to stabilize employment and added more than 1 million riders

Release Time:2022-04-29 Topic:What is the future of Meituan stock? Reading:22 Navigation:Stock Liao information > Technology > Meituan lost 1.7 billion in the first quarter, stepped up efforts to stabilize employment and added more than 1 million riders phone-reading

On the evening of May 25, Meituan Dianping (stock code: 3690.HK, hereinafter referred to as "Meituan") announced its first quarter results for 2020. Affected by the outbreak of the new crown pneumonia since late January this year, the local life service industry in which Meituan operates has encountered severe challenges on both the demand and supply sides. The same), the operating loss was 1.7 billion yuan. However, the epidemic has also promoted the onlineization of the industry, accelerated the digitalization process of local life service merchants, and further strengthened the company's determination to invest in the future.

In this quarter, under the pressure of its own operations, Meituan actively leveraged its platform advantages and became a Chinese citizen during the epidemic. Meituan’s “new infrastructure” has driven the per capita annual transaction volume of 450 million transaction users to further increase to 26.2; on the merchant side, Meituan has made every effort to relieve difficulties for merchants and partners, and has launched a number of measures to help resume work and production. At the same time, since late January, Meituan has provided more than 1 million new jobs for riders and created income for them, becoming a “reservoir” for stable employment.

"The new crown pneumonia epidemic has brought an inevitable impact on the life service industry. In the face of challenges, we chose to tide over the difficulties with merchants, launched the 'Spring Breeze Action' to help merchants resume work and production, and cooperated with local governments to promote consumption recovery Wang Xing, CEO of Meituan, said, “The epidemic has also made online services and online operations more widely accepted and used by consumers and merchants. The areas we have been focusing on and exploring for a long time have also burst into new vitality during this period. I believe these It will greatly accelerate the process of supply-side digitization and bring new growth drivers. In the future, we will focus on the new infrastructure of the life service industry and comprehensively assist the digital upgrade of merchants.”

The first quarter ushered in severe challenges. The online trend of the industry is accelerating

Affected by the epidemic, the two major businesses of Meituan faced severe challenges this quarter. Among them, the revenue of food delivery in the first quarter decreased by 11.4% year-on-year to RMB 9.5 billion, and the average daily order volume decreased by 18.2% year-on-year to 15.1 million. In-store, wine and travel business affected revenue decreased by 31.1% year-on-year to RMB 3.1 billion, and operating profit decreased year-on-year and month-on-month.

During the pandemic, the entire restaurant industry is facing challenges. Although its own operations have also been affected, Meituan still chooses to provide high-quality merchants who have been greatly affected by the epidemic with a variety of supports such as commission-free rebates, subsidies, and free traffic to help merchants get through difficult times in the most direct way. , in Wuhan alone, Meituan has provided merchants with over 30 million yuan in free commissions; at the same time, Meituan has helped merchants reduce losses through digital operations and marketing methods by accelerating product service updates. During the special period, the food delivery business has become the main source of income for the majority of restaurants, and more branded restaurants have begun to carry out food delivery services through Meituan. In the first quarter alone, more than 50% of the restaurants on the must-eat list launched food delivery, and the trend of onlineization in the industry has increased significantly. The supply of more and better high-quality merchants has in turn increased the preference of takeaway users for high-quality dining experience, and the user stickiness has been further deepened.

In response to the negative impact on in-store, wine and travel merchants, Meituan first effectively helped local life service merchants reduce their burdens by reducing or exempting merchant commissions and extending the validity period of annual fees. At the same time, it also actively cooperated with local governments. Taking local life services such as the catering industry as the entry point, we will start to promote economic recovery. As of mid-May, the "Safe Consumption Festival" jointly organized by Meituan and local governments has been implemented in more than 50 cities across the country. In terms of wine and travel business, Meituan and its partner hotels have launched the "Safe Living Project" to support the industry's post-pandemic recovery.

During the epidemic, non-meal consumer demand, represented by fresh food retail, increased rapidly, and Meituan's brand awareness of "everything can be delivered to home" was deepened, and new business revenue increased by 4.9% year-on-year to RMB 4.2 billion yuan.

All-round support for consumption recovery will increase investment in the future

In the first quarterly report, Meituan also estimated the impact of the epidemic on the whole year. It will take time for users to fully recover their consumer confidence, especiallyLocal life service merchants who just need them are still facing the pressure of recovery, which will have a potential impact on future business performance. However, Meituan CFO Chen Shaohui said that the epidemic is positive for the long-term trend of promoting the onlineization of the industry, which further enhances the company's confidence in investing in the future. At the same time, Meituan will also continue to pay attention to the difficulties faced by platform merchants and the industry. "How to better help merchants to resume operations will be our focus this year."

Recent data show that Meituan's series of measures to help recovery are beginning to show results. In the last week of the end of March, more than 70% of the merchants' takeaway orders recovered to more than 60% of those before the epidemic, and 30% of the merchants' outdoor sales completely exceeded those before the epidemic. The cities jointly launched consumer coupons, and the issuance areas have also expanded from catering to more local life service industries such as hotels, accommodation, and business districts. Data shows that, driven by the "Anshin" series of measures, the number of orders from high-quality merchants across the country increased by 61.6%; the number of room nights at the "Anxinzhu" hotel merchants on the platform has recovered by about 90% year-on-year at the end of March. Meituan will continue to combine hotels, homestays and scenic spots to actively promote the recovery of the tourism industry. In addition, Meituan recently launched the "Spring Breeze Action" million small store plan to help small stores achieve recovery through digitalization. The order volume of small stores on the platform in the first week of May increased by 28 times compared with the first week of February.

It is worth mentioning that new businesses such as Meituan's flash sale, which Meituan has been focusing on and exploring for a long time in the past, have assumed the role of "urban infrastructure" during special periods, bursting out new growth potential. In the future, it is expected to receive additional investment.

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