Meituan: history, ownership, mission, how it works & makes money

A Brief History of Meituan

Founded in 2010 by Wang Xing, Meituan started as a group-buying website, focusing on local services. The company transitioned to a broader platform, incorporating food delivery, hotel bookings, and various lifestyle services. By 2015, Meituan merged with Dianping, a review and recommendation site, significantly enhancing its market presence.

In 2018, Meituan went public on the Hong Kong Stock Exchange, raising approximately US$4.2 billion during its IPO, marking one of the largest tech IPOs in the region at that time. Its shares surged by over 5% on the first day of trading.

Financial Growth

Meituan has experienced notable financial growth since its inception. In 2020, the company reported a revenue of approximately RMB 114.84 billion (about US$17.1 billion), which was an increase of 17.8% year-over-year.

In the fiscal year 2021, Meituan's revenue rose to RMB 169.5 billion (approximately US$26.2 billion), demonstrating a year-on-year growth of 47.6%. The breakdown of revenue sources indicates a significant contribution from its food delivery segment, which accounted for about 70% of total revenues.

Market Position and Competition

As of 2022, Meituan maintained a strong position in the Chinese on-demand service market, competing predominantly with Ele.me and Baidu’s food delivery services. Meituan held a market share of approximately 65% in the food delivery sector, while Ele.me possessed around 25%.

The company has diversified its offerings into several categories, including:

• Food Delivery
• Hotel and Travel Services
• Grocery Delivery
• Movie Ticketing

Market Capitalization

As of October 2023, Meituan's market capitalization was estimated at approximately US$95 billion, reflecting its status as one of the leading technology firms in China.

Key Milestones

Meituan continues to innovate within the on-demand service space, expanding its technology-driven solutions and solidifying its leadership in the market. The company remains focused on enhancing user experience and increasing operational efficiencies through artificial intelligence and big data analytics.

A Who Owns Meituan

Meituan, a leading on-demand service platform based in China, operates primarily in the online food delivery and local services sectors. The company went public on the Hong Kong Stock Exchange in September 2018, and its ownership structure reflects a mix of institutional and individual investors, as well as significant stakes held by its founders and management.

As of October 2023, the ownership distribution of Meituan is characterized by major shareholders, along with details about their respective stakes:

Meituan's market performance has seen fluctuations, particularly due to market sentiment and regulatory changes in China. The company's market capitalization was approximately $48 billion as of October 2023, reflecting a significant increase from its IPO valuation of around $30 billion.

Meituan has reported substantial revenue figures, with the latest earnings report for Q2 2023 indicating total revenues of approximately RMB 70.39 billion (around $10.07 billion), a year-over-year increase of 29.5%. The growth has been driven mainly by its food delivery services, which accounted for roughly 70% of total revenues.

In terms of governance, the board of directors includes prominent figures with significant industry experience, ensuring that Meituan remains competitive in the rapidly evolving online services landscape. The strategic decisions made by management have positioned the company well for future growth, amidst challenges from competitors such as Alibaba's Ele.me and Dada Group.

Overall, Meituan's ownership structure and financial performance illustrate a blend of strong leadership, institutional backing, and a diverse investor base that supports its growth trajectory in the competitive Chinese market.

Meituan Mission Statement

Meituan, a leading Chinese e-commerce platform, focuses on delivering a wide range of services, including food delivery, hotel and travel booking, and various local services. Its mission statement emphasizes the commitment to help individuals and businesses achieve their potential through advanced technology and efficient service delivery.

The company aims to create a seamless connection between users and service providers, ensuring a diverse and rich experience. As of 2023, Meituan operates in over 2,800 cities and boasts a significant user base of approximately 620 million annual transacting users.

Meituan's approach to customer service is built on the premise of enhancing quality of life. The mission statement articulates the company's goal to leverage technology to optimize service quality and efficiency, reinforcing its status as a market leader in China's on-demand service industry.

In 2023, Meituan reported revenue of CNY 120.5 billion in the second quarter alone, demonstrating substantial growth compared to previous years. The net profit for the same period was CNY 2.5 billion, maintaining a positive trajectory amidst evolving market conditions.

Furthermore, the company's commitment to quality is reflected in its customer satisfaction ratings, which have consistently remained above 85% over recent years. Meituan's innovative initiatives, such as expanding its AI technology to enhance delivery efficiency, underscore its mission-driven approach.

Through its mission statement, Meituan not only aspires to improve customer experiences but also enhances the livelihoods of its partnered vendors. The platform serves a vast ecosystem of local businesses, contributing to the economy by simplifying access to services and facilitating growth.

In summary, Meituan's mission encapsulates a broader vision of technological integration into everyday life, aiming to set benchmarks for service efficiency and user satisfaction within the rapidly evolving e-commerce landscape.

How Meituan Works

Meituan Dianping, commonly referred to as Meituan, operates as a comprehensive platform that integrates several services including food delivery, hotel booking, ride-hailing, and lifestyle services. Founded in 2010 and headquartered in Beijing, Meituan is one of China’s largest e-commerce platforms for services and a key player in the on-demand service industry.

In the fiscal year 2022, Meituan reported revenues of approximately RMB 169.9 billion (about $24.5 billion), reflecting a year-on-year growth of 25.8%. The primary revenue segments include the food delivery business, which continues to dominate, contributing RMB 108.5 billion and accounting for about 64% of total revenues.

Meituan's food delivery service, Meituan Waimai, operates in a highly competitive environment. As of Q2 2023, the platform had over 600 million monthly active users and facilitated more than 30 million orders per day. The average order value in the food delivery segment was roughly RMB 55 in 2022.

Meituan has expanded its services beyond food delivery into other areas, effectively creating a super-app model. For instance, the hotel and travel booking division has shown strong performance, with over 2 million hotels available for booking and over 400 million room nights booked in 2022.

The company also invests heavily in technology to streamline operations and improve user experience. In 2022, Meituan spent approximately RMB 30 billion on research and development, focusing on artificial intelligence and big data analytics to optimize delivery routes and enhance user engagement.

Meituan’s user acquisition strategy heavily relies on discounts and promotional offers. As of Q2 2023, the average cost of customer acquisition was reported at RMB 38 per user, indicating a strategic focus on expanding its user base in an increasingly saturated market.

As of the first half of 2023, Meituan's gross merchandise value (GMV) reached RMB 1 trillion, representing a substantial growth trajectory as the company continues to scale its operations and enhance service offerings.

Meituan's market capitalization was approximately $50 billion as of October 2023, positioning it among the top players in the Chinese technology sector. Despite the challenges posed by regulatory pressures and competition, Meituan remains a pivotal entity in the digital economy, focusing on innovation and expanding its ecosystem.

How Meituan Makes Money

Meituan is a leading on-demand service platform in China, operating across various segments that contribute to its revenue generation. The company's primary business models include food delivery, in-store dining services, hotel and travel bookings, and additional lifestyle services.

Food Delivery

Meituan's food delivery service, known as Meituan Waimai, dominates the market with a strong user base. As of the second quarter of 2023, the platform reported a revenue of approximately RMB 39.1 billion (about $5.5 billion) from its food delivery operations. This segment accounts for around 46.7% of Meituan's total revenue.

In-Store Dining

Meituan also generates revenue from in-store dining services, where users can book tables and order food. This segment contributed about RMB 15 billion (approximately $2.2 billion) in revenue in the same period, representing 17.8% of total revenue.

Hotel and Travel Bookings

The hotel and travel booking sector is another significant revenue stream for Meituan. In 2023, this division amassed RMB 12 billion (around $1.7 billion) in revenue, which is roughly 14.3% of the overall income.

Lifestyle Services

Meituan provides various lifestyle services, including movie ticket bookings and beauty services. This segment saw revenue of about RMB 9 billion (approximately $1.3 billion), making up 10.7% of the company’s total revenue in Q2 2023.

Revenue Breakdown Table

Subscription Services

Meituan also offers subscription services for restaurants and businesses. These subscriptions provide access to various tools for marketing and customer engagement, contributing an estimated RMB 6 billion (around $850 million) to the company's revenue in 2023.

Advertising Revenue

Advertising is another revenue source, with businesses paying to promote their services on the Meituan platform. In Q2 2023, advertising revenue reached about RMB 5 billion (approximately $700 million), accounting for 6.4% of total revenue.

Financial Highlights

In the second quarter of 2023, Meituan reported a total revenue of RMB 75 billion (around $10.8 billion), marking a growth of 28% year-over-year. The company’s net profit for the same period was RMB 8 billion (approximately $1.1 billion), highlighting its robust profitability amidst expanding operations.

Market Position

As of 2023, Meituan holds approximately 66% of the food delivery market share in China, showcasing its dominance in this sector. Competitors like Ele.me hold around 29% of the share, emphasizing Meituan's leading position.