Meituan Dianping Announces Financial Results for the Three Months Ended September 30, 2019
HONG KONG, Nov. 21, 2019 /PRNewswire/ -- Meituan Dianping (HKG: 3690) (the “Company” or “Meituan”), China’s leading e-commerce platform for services, today announced the unaudited consolidated results of the Company for the three months ended September 30, 2019 (“3Q2019”).
FINANCIAL PERFORMANCE HIGHLIGHTS
For the third quarter of 2019:
- Total revenues increased by 44.1% year-over-year to RMB27.5 billion from RMB19.1 billion for the same period of 2018, and increased by 21.1% quarter-over-quarter from RMB22.7 billion for the second quarter of 2019. Revenues increased across all business segments.
- Total gross profit increased by 109.8% year-over-year to RMB9.6 billion from RMB4.6 billion for the same period of 2018, and increased by 20.8% quarter-over-quarter from RMB7.9 billion for the second quarter of 2019.
- Selling and marketing expenses as a percentage of total revenues decreased to 20.4% from 24.2% for the same period of 2018, and increased from 18.3% for the second quarter of 2019.
- Adjusted EBITDA and adjusted net profit were RMB2.3 billion and RMB1.9 billion, respectively.
For the third quarter of 2019:
- Total Gross Transaction Volume (GTV) on our platform grew by 33.6% to RMB194.6 billion from RMB145.7 billion for the same period of 2018.
- Annual Transacting Users on our platform in the twelve months ended September 30, 2019 grew by 14.0% to 435.8 million from 382.3 million in the twelve months ended September 30, 2018.
- Average number of transactions per annual Transacting User on our platform increased to 26.5 transactions in the twelve months ended September 30, 2019 from 22.7 transactions in the twelve months ended September 30, 2018.
- Annual Active Merchants on our platform grew by 8.8% to 5.9 million in the twelve months ended September 30, 2019 from 5.5 million in the twelve months ended September 30, 2018.
- Overall Monetization Rate[i] increased to 14.1% for the third quarter of 2019 from 13.1% for the same period of 2018.
[i] Monetization Rate equals the revenues for the year/period divided by the Gross Transaction Volume for the year/period.
“We are happy with the results we have achieved this quarter. As the leading e-commerce platform for services in China, with an unrivaled scale and selection, we have become the go-to platform for both consumers and merchants,” said Xing Wang, Chairman and CEO of Meituan. “With our ‘Food + Platform’ strategy, we will continue to leverage our insights on the consumers and merchants to further boost innovation and improve efficiency. As always, we will keep investing in our long-term growth and focusing on business opportunities that will generate value for both consumers and merchants in the long run.”
BUSINESS REVIEW AND OUTLOOK
During the third quarter of 2019, we further strengthened our leading position while delivering healthy operating results of our food delivery business. Our food delivery business sustained its strong growth momentum. GTV of our food delivery business increased by 40.0% to RMB111.9 billion for the third quarter of 2019 from RMB80.0 billion in the same period of 2018. The number of food delivery orders increased by 38.1% to 2.5 billion for the third quarter of 2019 from 1.8 billion in the same period of 2018. The average value per order of our food delivery business increased by 1.3% year-over-year. Monetization Rate of our food delivery business for the third quarter of 2019 remained stable year-over-year. As a result, revenue from our food delivery business increased by 39.4% year-over-year to RMB15.6 billion for the third quarter of 2019 from RMB11.2 billion in the same period of 2018. Gross profit from our food delivery business increased by 64.5% to RMB3.0 billion for the third quarter of 2019 from RMB1.9 billion in the same period of 2018, while gross margin expanded to 19.5% from 16.6%. Although gross margin decreased by 2.8 percentage points on a quarter-over-quarter basis due to unfavorable weather conditions, we were able to achieve positive adjusted operating profit[ii] for our food delivery business for the third quarter of 2019.
The robust growth of our food delivery business was a result of our strengthened market leadership, enhanced operational capability, and improved marketing tactics to stimulate consumers’ impulse consumptions during the summer season. On the consumer front, our Food Delivery Membership Program continued to yield encouraging results, which not only further improved our target consumers’ order frequency but also enhanced their stickiness to our platform. Furthermore, benefiting from the new consumption trend that healthy light meals, beverages and nighttime snacks are gaining popularity among the younger generation, our Food Delivery Membership Program has also stimulated consumption of healthy light meals, beverages and nighttime snacks throughout the summer season. As a result, our year-over-year growth rate of the number of food delivery transactions accelerated on a sequential basis during the third quarter of 2019, with the average number of daily food delivery transactions increasing by 38.1% year-over-year to 26.8 million. Such strong growth in order volume demonstrates that consumers’ consumption habits can be cultivated and the demand for food delivery services still has ample growth potential in the long run.
On the merchant front, we continued to explore supply-side operations to drive more sustainable growth of the entire industry and to further enhance our long-term competitive advantages. For example, we have increased our efforts on developing comprehensive online operation solutions for selected high-quality restaurants, helping high-quality restaurants improve their food delivery operational capability, traffic generation, traffic conversion and retention rates. As a result, the number of food delivery orders generated by these selected high-quality restaurants improved significantly for the third quarter of 2019. Moreover, we continued to improve our marketplace products to provide restaurants with more useful tools for improving their marketing efficiency. For example, we introduced an online marketing design tool to automatically generate customized banner designs for restaurants in the third quarter of 2019.
On the delivery front, we continued to explore innovative strategies to further refine our delivery network operations, optimize the cost structure and improve our delivery efficiency. In addition to economy of scale, during the third quarter of 2019, we mobilized our delivery capacity better based on enhanced segmentation of our delivery services to deliver user experience in a more cost-effective way under selected consumption scenarios and extreme weather conditions. Meanwhile, we continued to make efforts on enhancing our delivery riders’ sense of fulfillment and corporate belonging through the “717 Riders’ Day” celebration and a charity program launched for our riders’ children in the third quarter of 2019.
[ii] Adjusted operating profit equals to operating profit eliminated the impacts of items, including share-based compensation expenses, amortization of intangible assets resulting from acquisitions, impairment and expense provision for Mobike restructuring plan, impairment of intangible assets, fair value changes on investments measured at fair value through profit or loss and other gains, net.
In-store, hotel & travel
During the third quarter of 2019, we continued to strengthen the market leadership of our in-store, hotel & travel businesses, which demonstrated further strong monetization potential. The growth of GTV of our in-store, hotel & travel businesses accelerated for the third quarter of 2019, growing by 29.4% to RMB63.9 billion for the third quarter of 2019 from RMB49.3 billion in the same period of 2018. Monetization Rate increased to 9.7% from 9.0% year-over-year. Revenues from our in-store, hotel & travel businesses increased by 39.3% to RMB6.2 billion for the third quarter of 2019 from RMB4.4 billion in the same period of 2018. Gross profit from our in-store, hotel & travel businesses increased to RMB5.5 billion for the third quarter of 2019 from RMB4.0 billion in the same period of 2018, while gross margin slightly declined to 88.6% from 90.6% year-over-year, but remained flat quarter-over-quarter.
We continued to see robust revenue growth in this segment, mainly attributable to increasing revenue from our online marketing services as a result of our expanding merchant base, the revived growth of transaction-based services, and the accelerated growth in the scale of our hotel booking business. In addition, the strong growth of our food delivery business during the third quarter of 2019 further boosted user traffic and incrementally increased cross-selling opportunities for our in-store, hotel & travel businesses.
For the third quarter of 2019, we continued to unleash the potential of small and medium local merchants’ unmet marketing needs through our diversified product portfolio and enhanced advertising algorithms. For the third quarter of 2019, the number of active marketing merchants in this segment continued to grow by more than 50% year-over-year.
In addition, we further improved our operational capabilities and launched more promotional campaigns to enhance our brand awareness and influence among consumers and merchants, which in turn drove the robust growth of commission revenue of our in-store business. For example, we launched the “Super Brand Food Festival” to promote fast food and in-store snacks and drinks from branded restaurants. During this festival, more than 60,000 stores under 124 well-known restaurant brands in 948 cities participated in this promotion, generating substantial sales of ice creams, coffee, desserts and others. In addition, we launched the “Chinese Valentine’s Day Special Campaign” across all categories on our platform, including in-store dining, hotel, travel, beauty, leisure and entertainment. During this promotion, the volume of restaurant reservations on our platform increased by more than 300% compared with the corresponding period in prior years. Pre-holiday shopping categories, including beauty salons, spa and flower shops, and entertainment services, including overseas travel and theme parks, all enjoyed substantial improvement in consumer traffic and engagement. Moreover, we also held the “2019 Parent-Child Fantasy Day” celebration in Shanghai and over 100 renowned parent-child brands from 79 categories participated in the event, including entertainment, education, photography, restaurants and toys.
With respect to our hotel booking business, we further strengthened our leading position for the third quarter of 2019. The number of domestic room nights consumed on our platform for the third quarter of 2019 increased by 44.4% year-over-year, surpassing 100 million quarterly room nights for the first time and the average daily rate per room night also experienced a steady year-over-year increase. We continued to develop mutually beneficial collaborations with more hotels in lower-tier cities and enhanced our efforts on cross-selling hotel booking services to existing users on our platform for the third quarter of 2019, which led to the accelerated growth of domestic room nights. Furthermore, our “Hotel+X” campaign launched in April 2019 continued to stimulate the growth of our high-end hotel booking business and help high-end hotels promote their non-lodging services, such as restaurants, wedding venues, spa and gyms, thereby further substantiating their revenue streams. As a result, revenue contribution from high-end hotels further increased year-over-year for the third quarter of 2019.
New initiatives and others
Revenues from the new initiatives and others segment increased by 65.4% to RMB5.7 billion for the third quarter of 2019 from RMB3.5 billion in the same period of 2018. Gross profit of the new initiatives and others segment was positive RMB1.1 billion for the third quarter of 2019, compared to negative RMB1.3 billion for the same period last year. Gross margin was 18.7% for the third quarter of 2019, improving from negative 37.4% in the same period of 2018.
During the third quarter of 2019, with respect to our bike-sharing services, we gradually replaced some of the older version bikes with the new Meituan Bikes, which are new model of bikes painted in the color of Meituan Logo with longer life span and user experience improvements. In addition, operating losses continued to narrow meaningfully from that for the second quarter of 2019, mainly attributable to the significant reduction in depreciation because some bikes reached the end of their useful lives during the third quarter of 2019, while the new Meituan Bikes in replacement also led to lower depreciation. Consumers must unlock these new bikes through our Meituan super app, which helps to enhance our brand image, direct more traffic to our super app, and create more opportunities for cross-selling other local services. With respect to our car-hailing services, while we continued to optimize the operations of our self-operated model in Shanghai and Nanjing, we have explored the aggregated model in more cities.
With respect to our restaurant management system business, our focus remains on optimizing our products and increasing the coverage of high-quality merchants to lay a better foundation for future monetization. For the third quarter of 2019, the number of high-quality merchants continued to grow both year-over-year and quarter-over-quarter.
With respect to our grocery retail business, we continued our prudent exploration to better capture the opportunities in this space. With respect to our self-operated Meituan Grocery model, we increased warehouse density in the few cities that we currently operate in. With respect to our marketplace model, Meituan Instashopping, we also started pilot programs in ten traditional farm markets in Wuhan, helping merchants digitize their fresh product inventories and providing them with on-demand delivery services and guidance on SKU selection, pricing and traffic attraction. Meanwhile, we continued to experience strong growth in high-ticket categories, such as flower and medicine categories, in our marketplace model.
For the full announcement of Meituan 2019 third quarter results, please visit:
About Meituan Dianping
Meituan Dianping (HKG: 3690) (the “Company” or “Meituan”) is China’s leading e-commerce platform for services. With the mission of “We help people eat better, live better,” the Company’s platform uses technology to connect consumers and merchants. Service offerings on the platform address people’s daily needs for food, and extend further to broad lifestyle and travel services. Meituan is the world’s leading on-demand food delivery service provider and China’s leading e-commerce platform for in-store dining services. Meituan helps consumers discover merchant information, make informed decisions, complete online and offline transactions and enjoy on-demand delivery. The Company currently owns several household brands in China, including Meituan, China’ s leading online marketplace for services, Dianping, China’ s leading online destination for discovering local services, Meituan Waimai for on-demand delivery services, and Mobike for bike-sharing services. Meituan has 400.4 million Annual Transacting Users and 5.8 million Annual Active Merchants as of December 2018. The Company operates in over 2,800 cities and counties in China.
This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.
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