China’s Meituan Dianping narrows losses, pushes forward grocery retail initiatives
- Food delivery services giant posted better-than-expected 70.1 per cent growth in first-quarter revenue to 19.2 billion yuan
Chinese food delivery services giant Meituan Dianping plans to continue its foray into China’s grocery retail sector, despite closing a number of its Ella supermarkets in the first quarter of this year, as it ratchets up competition with Alibaba Group Holding.
Beijing-based Meituan said it was “disciplined on capital allocation for our new initiatives”, according to a regulatory filing in Hong Kong on Thursday when it posted better-than-expected earnings for the quarter ended March.
“With our clear scale and structural advantages in user base, merchant base and delivery network through long-term investments, we have the capability and flexibility to both strengthen our market position and improve our financial performance,” said company co-founder, chairman and chief executive Wang Xing in a statement released after the close of trading.
Meituan narrowed its net loss in the first quarter to 1.4 billion yuan (US$203 million), compared with a 21 billion yuan loss in the same period a year ago, on the back of strong revenue growth across all its major business segments. That was ahead of the 2.7 billion yuan loss projected by analysts surveyed by Bloomberg.
Total revenue in the first quarter grew 70.1 per cent to 19.2 billion yuan, up from 11.3 billion yuan a year earlier, to beat analysts’ 18.3 billion yuan estimate, as Meituan saw a rise in both the number of users and merchants on its platform.
