Meituan

Meituan ( zh, p=Měituán, c=美团, literally "beautiful group"; formerly Meituan–Dianping, literally "beautiful group–reviews") is a Chinese shopping platform for locally found consumer products and retail services including entertainment, dining, delivery, travel and other services. The company is headquartered in Beijing and was founded in 2010 by Wang Xing.

The company operates different apps and websites for different services. The Meituan site offers deals of the day by selling vouchers on local services and entertainment. By May 2014, the company had 5,000 employees. In 2015, Meituan merged with Dazhong Dianping and changed its name to "Meituan-Dianping". dianping.com (大众点评网 ''Dàzhòng diǎnpíng wǎng'', literally "public reviews net") hosts consumer reviews of restaurants, similar to Yelp and TripAdvisor, and also offers group buying similar to Groupon. Meituan-Dianping is one of the world's largest online and on-demand delivery platforms. It has over 290 million monthly active users and 600 million registered users as of April 2018. In Q2 2021, GTV of Meituan food delivery business increased by 59.5% year over year. The daily average number of food delivery transactions increased by 58.9% year over year to 38.9 million.

Company

Meituan.com is a group-discount website that sells vouchers from merchants for deals, subject to a minimum number of buyers who demand a discount, from which Meituan generates commissions. Meituan.com generates most of its revenue from mobile application services. The company has partnering agreements with over 400,000 local Chinese businesses. Meituan accounts for the largest market share by revenue, followed by LaShou and 55tuan.

History

Piloted in Shanghai and Beijing, Meituan had rapidly expanded to second-tier and third-tier cities, totalling 200 million users in 2015. Meituan.com became a dominating company in China after a rapid consolidation of the deal-of-the-day companies. Earlier estimates show that there were 2000 voucher selling companies in the mid-2000s and due to intense competition in the industry only a few have emerged as dominant players. In 2014 it accounted for 60% of the market share of deal-of-the-day group-buying websites in China. The company received initial funding of $12 million from Sequoia Capital. In May 2014, global growth equity firm General Atlantic led a $300 million Series C funding round with two other investors. On October 8, 2015, Meituan and Dianping, a Chinese group buying site, became one company. On January 19, 2016, Meituan Dianping announced that it has raised more than $3.3 billion. On September 20, 2018, Meituan Dianping debuted on the Hong Kong stock exchange at an IPO price of HK$69 per share.

The company was renamed from "Meituan Dianping" to Meituan with effect from September 30, 2020.

In April 2021, Meituan raised $9.98 billion in additional financing via the sale of $3 billion in convertible bonds and $7 billion in equities. The funds will be used to expand into China's groceries space as well as to develop autonomous technologies in the drone and delivery space. The same month, the State Administration of Market Regulation announced an investigation into Meituan for alleged anticompetitive practices. By May 2021, increased regulatory scrutiny led to almost $40 billion being wiped from the company's overall value. Ultimately, Meituan accepted a fine without making any appeal and stated that it would comply with regulatory requirements in the future.

In May 2023, Meituan's Hong Kong takeaway platform "Keeta" officially launched its services, with the first service pilot located in Mongkok and Tai Kok Tsui, marking the first time that Meituan has offered its services outside of mainland China.

Products and Services

Food Delivery

Meituan's food delivery option, established in 2013, has become central to its revenue stream with the pandemic accelerating demand for food delivery adoption. Widely used, the service has emerged as a key driver of user engagement on the platform, pushing traffic to other offerings such as hotel and travel bookings. Meituan is the largest food delivery platform in China, holding a majority share of over 65% in the Chinese food delivery business, with its main competitor, Ele.me holding less than 30%.

On Demand Services

Meituan is in the on demand retail service industry with its organization and logistics, as well as its supply and delivery chain infrastructure network to enable a guaranteed delivery system. This network consists of 2,800 counties and cities in China, and more than 1 million daily active delivery drivers and 5.27 million delivery drivers earning on Meituan in 2021. Within their on demand services, Meituan has several programs that provide different services, ranging from instant delivery to next day delivery, depending on the tier of city.

Meituan Instashopping Service - This provides small and medium-sized businesses the ability to digitize and offer its products through instant delivery and/or next day delivery. Order volume has increased by 40% year over year, active merchants are increasing by 30% year over year, partnering with over 400 brands and offering services in over 200 cities in China. Consumers can order flowers, medicine, and various items from local supermarkets and convenience stores. This is offered in up to tier three cities.

Meituan Grocery (“美團買菜”) - Now upgraded to Xiaoxiang Supermarket (“小象超市”), which marks the official transition from grocery to online supermarket in 2023, where users can get instant/fresh products such as fresh produce and pharmaceuticals/medicine though instant delivery. The supply chain for Meituan grocery operates in Tier 1 cities.

Meituan Select (“美團優選”) - Provides next day delivery for non-immediate demand products such as appliances, apparel, necessities, operating in lower-tier markets. Launched in 2020 in China during the COVID-19 pandemic, the online platform uses a bulk purchasing model grouping orders and enabling cost savings for customers. By the beginning of 2021, Meituan Select covered more than 20 provinces using Meituan's well-established logistics network to optimize delivery and efficiency. Meituan-Select worked as an "next-day supermarket," delivering products to designated pick-up spots, such as local shops, where customers could collect their orders.

The platform's commercialization model, offering discounts, and bulk purchasing allowed it to generate significant GMV, placing the company ahead of its competitors such as Duo Duo Grocery ( Pinduoduo), and Taocaicai ( Alibaba). However, the company faced many different obstacles like government regulations, aggressive competitions, and financial losses. Regulation from the government in 2021 made Meituan pay fines for predatory pricing and false advertising.

In response to these challenges, Meituan reorganized its operations and adopted cost-cutting strategies. That made Meituan shift its strategy to improving supply chain efficiency and profitability by achieving positive margins by 2023.

Hotel and Travel Services

Meituan entered the hotel and travel services space in 2015. Since then, it has expanded partnerships with over 900 hotel chains, as highlighted in their “Must-Stay List for 2023." Recent boosts in tourism have also helped to expand the business segment with a year over year (YoY) booking increase of 120%. More recently Meituan has increased its offerings to include coupon and package deals. Their broad network allows them to adapt to consumer preferences and trends for brand awareness. Meituan also leverages its data analytics to  provide smaller and medium-sized hotel merchants with tools to drive traffic, improve room renovation solutions, and expand their marketing strategies. Recent developments include a recent partnership with Agoda, an online travel agency, to better cater to Chinese tourists traveling abroad and enhance services for overseas travel. Similar to recent developments by  Pinduoduo with its Duo Duo live, Meituan's expansion into the livestream model has also helped merchants engage with users to promote destinations through virtual tours. The livestream model gained traction after COVID as part of efforts to encourage Chinese nationals to travel again.

Bike Sharing and E-Bike Sharing

Meituan acquired Mobike in April 2017 for US$2.7 billion. Meituan is responsible for production, operation, and disposal of these bikes and e-mopeds. Research and development (R&D) and production of bikes follow environmentally friendly practices and national safety standards.

Other Services

Meituan also offers many other services and smaller initiatives, such as a business-to-business food distribution service (快驴), power-bank-sharing, micro-lending, and a restaurant management system (RMS) initiative.

New Developments

Unmanned  Aerial Vehicles

In 2023 Meituan introduced unmanned aerial vehicles (UAV) to enhance its urban logistic delivery. These devices can currently deliver within a 5 kilometer range and operate under diverse weather conditions and temperatures. By 2023 they had completed nearly 300,000 deliveries across various cities. Through a partnership with Toyota backed unicorn Pony.ai, the company licensed the company's technology to further expand its UAV delivery services in China's first-tier cities.

Self Driving Delivery Vehicles

Building on its service offerings, Meituan introduced self-driving vehicles in 2021, focusing on expanding into densely populated cities such as Shanghai, Beijing, and Shenzhen. This new alternative to delivery services has grown in recent years, gaining traction as the adoption of driverless vehicles, including autonomous city buses and taxis, continues to rise in China. Through a partnership with Li Auto Inc. Meituan leverages the company's intellectual property to advance its autonomous vehicle development. The IP license includes Li Auto's SEV model's complete vehicle design plan, molds, and tooling.

Foreign expansion

Meituan is expanding into international markets, setting its sights beyond mainland China. Meituan's foreign expansion began with the launch of the Keeta delivery app in Hong Kong with further expansion to the Middle East.

Asia

Hong Kong

In May 2023 Meituan launched its first food delivery service - named Keeta. It was the first time Meituan offered its products outside of mainland China. Keeta began operating in the districts of Mong Kok and Tai Kok Tsui, with plans to expand to the rest of Hong Kong by the end of 2023. Keeta offered several features to stand out in the Hong Kong market and attract more customers:

''Promotions:'' Newly registered users were offered HK$300 worth of coupons for meals and delivery fees at their partners like McDonald's, KFC, and Yoshinoya.

''On-Time Promise:'' The “On-time Promise” policy was introduced in Hong Kong, offering compensation for late meal deliveries.

Middle East

Saudi Arabia

In September 2024 Meituan launched its platform Keeta in Riyadh, Saudi Arabia offering free deliveries and discounts during its initial launch phase for customers. Meituan announced plans to capture up to 80% of the Saudi Arabian food delivery market by 2025. Keeta's expansion plans align with Saudi Arabia's vision for 2030, with an investment of SR1 billion ($266.6 million) to improve operations, create jobs, and enhance services. Keeta focuses on affordability, diverse range of restaurants, faster delivery and tailored customer experience to progress in the Saudi Arabian market. Meituan CEO Wang Xing stated that international expansion is part of Meituan's long-term strategy.

Meituan Network Marketing

Meituan is a Chinese O2O (online-to-offline) local life service platform. It has 600 million users and almost 4.5million business partners that cover nearly all China. About 35million people use the service every day. Meituan offers a one-stop "travel life" service platform for users to achieve coverage of full consumption in different places. Therefore, now there are 70million users of hotel and travel businesses in total.

In 2020, the company will achieve revenue of RMB 114.8billion, with 511million annual users (mainly from the takeaway business in 2020), 6.8million active merchants, 355million domestic hotel nights, ranking first in the industry in the amount of hotel nights, and a solid market share for Meituan takeaway, making Meituan the leading local lifestyle service platform. Meituan has become the leading local lifestyle service platform.

Management and Administration

The company is headquartered in Beijing and was founded in 2010 by Wang Xing. Prior to starting Meituan, Wang founded Xiaonei and Fanfou, which were based on Facebook and Twitter respectively.

Executive directors:

Wang Xing (王興): Co-founder, CEO, and chairman of the board. He is responsible for overseeing strategic planning, direction of the business, and management of the company. He also maintains directorship in multiple Meituan subsidiaries.

Mu Rongjun (穆榮均): Co-founder and senior vice president. He is in charge of financial services and corporate affairs.

Non-Executive Director:

Neil Nanpeng Shen (沈南鵬): Appointed director in October 2015. He provides guidance on investment and business strategies as well as financial discipline.

Independent non-executive directors:

Orr Gordon Robert Halyburton: Appointed director in September 2018. He advises on matters of financials, accounting, and corporate governance.

Leng Xuesong (冷雪松): Appointed director in September 2018. He gives guidance on finance, executive compensation, and corporate governance.

Shum Heung Yeung Harry (沈向洋): Appointed director in September 2018. He provides advice for technology innovation and global technology and internet trends.

Yang Marjorie Mun Tak (楊敏德): Appointed director in June 2023. She gives guidance on business development and corporate governance.

Senior management:

Wang Xing (王興): CEO. See above for further description.

Mu Rongjun (穆榮均): Senior vice president. See above for further description.

Chen Shaohui (陳少暉): Senior vice president. Joined in November 2014, he oversees the company's finances, strategic planning, investments, and capital market activities.

Wang Puzhong (王莆中): CEO of the Core Local Commerce. Joined in 2015. He covers nine divisions: Meituan Platform, Meituan Infrastructure Platform, In-Store Dining, In-Store other services, hotel and travel, food delivery, Meituan Delivery. Meituan Instashopping, and Meituan Medicine.

Zhang Chuan (張川): Senior vice president. He joined in January 2017 and is responsible for the Dianping, RMS, bike and e-moped, and power bank businesses.

Awards and recognition

Given the 2019 IDG International Innovation Enterprise Brand Award at the Global Top Brands Ceremony. They received this award due to their unmanned distribution robot technology.

Received the Best Short-Term Investing Solution in 2019 award from Treasury Today Group in tandem with JP Morgan Asset Management. This award was given for their solution to Meituan's Investment and Liquidity problem.

Meituan's Keeta app was named Best Everyday Essential in Google Play Hong Kong's Best of 2024 Awards due to its ability to integrate into everyday life.

Further reading

*Lei, Ya-Wen. "Delivering Solidarity: Platform Architecture and Collective Contention in China’s Platform Economy.” American Sociological Review, (February 2021). https://doi.org/10.1177/0003122420979980.

References

External links

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{{Online food ordering

Privately held companies of China
Deal of the day services
Companies based in Beijing
Chinese companies established in 2010
Internet properties established in 2010
Online retailers of China
2018 initial public offerings
Super-apps
Companies in the S&P Asia 50