Biz / Tech

Meituan losses widen in Q4 albeit more revenue

Hong Kong-listed Meituan Dianping's revenue jumped and it aims to maintain its dominance of the food delivery business. The losses partly came after the acquisition of Mobike.

Hong Kong-listed Meituan Dianping’s shares dropped 11 percent to close at HK$52.35 (US$6.67) on Tuesday after it reported widening losses of 3.41 billion yuan in the fourth quarter, 57 percent higher than losses of 2.18 billion yuan a year earlier. 

But revenue surged 89 percent to 19.80 billion yuan and transactions volume rose 33 percent to 138 billion yuan after the number of customers and purchasing frequency both picked up, the company said in a stock exchange filing on Monday night.

The site, which covers food delivery, hotel bookings and restaurant-management systems, relies on discounts for consumers to use its services as it competes with Ele.me, the delivery unit backed by the deep-pocketed Alibaba. Food delivery accounts for more than half of the Tencent-backed Meituan. 

"We will continue to drive supply-side digitalization with technological innovation, and to empower merchants to gain more growth momentum," said CEO and Founder Wang Xing. 

Meituan also intends to maintain the market leadership of its food delivery business, as well as seeking to further improve its platform's monetization capabilities. 

"We will take a more disciplined approach when allocating capital resources for our new initiatives and will be more selective in scaling up new initiatives," it said in a statement. 

It will also "prudently explore" opportunities in new retail areas such as non-food delivery, it added.

Total revenues in 2018 jumped 92.3 percent year on year to 65.2 billion yuan. 

Its acquisition of bike-sharing company Mobike in April last year and its foray into the ride-sharing business has not turned profitable yet. On the ride-hailing front, it also confronts Didi which holds the majority of the market share. 

Meituan’s “new initiatives” segment, which includes its acquisition of Mobike, reported gross loss of 979 million yuan for the quarter.

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