China food delivery giant Meituan reports 10bn yuan loss after paying antitrust fine
- China’s biggest on demand food delivery provider Meituan reported a 10 billion yuan loss in Q3 after getting hit with an antitrust fine
- Chinese regulators are taking a much tougher stance on the country’s increasingly powerful tech giants
The Beijing-based company incurred a net loss of 10 billion yuan (US$1.565 billion), missing analysts’ estimates for a 7 billion yuan loss. That compared with a 6.3 billion yuan profit in the period a year earlier. Revenue rose 37.9 per cent to 48.8 billion yuan in the quarter ended September.
Besides the antitrust fine imposed by the Chinese government, a business segment called ‘new initiatives and others’, which includes group buying, recorded a wider operating loss of 10.9 billion yuan, compared with a 2 billion yuan loss for the same period of 2020.
“The operating loss from the new initiatives and others segment expanded, as we continued to invest in areas that would bring long-term value to the company,” Meituan said in its earnings release.
Chinese regulators are taking a much tougher stance on the country’s increasingly powerful tech giants.
In October, the State Administration for Market Regulation (SAMR) levied a 3.4 billion yuan (US$533 million) fine on Meituan for abusing its dominant market position, ending a months-long probe.
The fine was equivalent to about 3 per cent of Meituan’s total domestic revenue of 114.7 billion yuan last year, according to SAMR. The penalty was also smaller than previous estimates and reports.
