Food delivery giant Meituan reports 27 pc revenue growth as demand rebounds after lifting of Covid curbs in China
- The Beijing-based firm said its total revenue was 58.62 billion yuan for the three months to end-March
- Net profit was 3.36 billion yuan from a 5.7 billion yuan loss a year ago, thanks to cost-cutting efforts and a rebound in food sector
Chinese food delivery and on-demand services giant Meituan reported a 26.7 per cent rise in first-quarter revenue from a year ago, as demand surged after China’s reopening from Covid-19 restrictions.
Meituan’s huge delivery network has become a big cushion in China’s job market, providing seasonal employment to tens of thousands of people who cannot find full-time jobs elsewhere.
Meanwhile, the company is edging into overseas markets, with its delivery service available in Hong Kong as of this week.
However, with its bespoke brand of KeeTa for the city, Meituan is up against stiff competition from established local players such as Foodpanda and Deliveroo. It has dangled incentives and discounts to attract users in a move that could weigh on costs.
Bucking a trend of industry lay-offs, Meituan this year plans to add 10,000 to its workforce, which stood at 91,932 at the end of 2022, to fend off competition. This also adds to concerns about increased cost levels at the company, according to a pre-earnings note sent to clients by Wang Kai, senior equity analyst at Morningstar Asia.