Record of meituan financial report teleconference | Chen Shaohui: takeout growth may slow down in the next few quarters


Tencent technology, November 26 – meituan (HKEx Code: 3690) released its third quarter financial statements as of September 30, 2021 on Friday. According to the financial report, the total revenue of meituan was 48.83 billion yuan, a year-on-year increase of 37.9%; Non IFRS net loss was RMB 5.53 billion.
After the release of the financial report, Wang Xing, chairman and CEO of meituan, and Chen Shaohui, senior vice president and chief financial officer, attended the financial report teleconference and answered analysts’ questions on the spot.
The following is the record of the earnings conference call:
Analyst: with regard to your recent new strategy, what are the reasons why you upgraded the “food + platform” strategy to the “retail + technology” strategy? How important is your organizational restructuring?
Wang Xing: first of all, we are expanding food to retail. Many people look at retail from a very narrow perspective, that is, the “2C (consumer oriented)” of selling products to consumers However, we look at retail from a broader perspective, that is, selling products or services to end customers. We think this is the original definition of retail, so retail can be divided into product retail and service retail. End customers include consumers and small and medium-sized businesses.
According to this definition, meituan has been involved in the retail industry since the beginning. We first started service retail through group purchase in 2010. Later, we gradually expanded to commodity retail and provided Hotel dishes to consumers through our takeout business. Recently, we further increased categories through various business models, such as flowers, drugs, etc.
We have meituan flash purchase, a market-based model, meituan preferred, a party a retail model, and its “reservation + self delivery” model and “next day delivery” model. These businesses enable us to meet the extensive needs of consumers in different markets and situations. Retail business will be our top priority, and we will build our most fundamental ability.
In addition, we upgraded from platform to technology. In the past, when we talked about platform, we were talking about mobile Internet platform. Meituan started from web page and then released mobile app. Our purpose is to help consumers eat better and live better. We can achieve this purpose through technology. Technology can promote the digital transformation of supply side, especially millions of consumers Small and medium-sized restaurants and local merchants can also promote more users to stay on our platform. Through continuous investment in technology, we have the world’s largest takeout network. With this network, we can deliver any goods to consumers’ homes in 30 minutes. We also invest in the research and development of relevant hardware, especially the problem of no delivery In the third quarter, our R & D costs rose a lot, up 8.8% year-on-year. We also invested in other related front-end technologies. As technology developers, we think they will develop more widely in automation, robotics, the Internet of things and other fields.
Recently, we have made a structural reorganization. We have deployed a high-level team to take charge of the commodity retail business, strengthen the organizational capacity, further integrate resources and enhance the synergy between businesses. In the long run, it is very important to establish the overall retail capacity. Finally, I would like to emphasize that no matter how our business evolves, our purpose will not change That is, our aim is to help consumers eat better and live better, which requires our continuous efforts and investment. We also hope to create more social and commercial value for our community.
Analyst: as for the food takeout business, the growth rate of business volume decreased month on month in the third quarter. What are the reasons? Is it related to the recent consumption degradation? What level will the revenue be in the next quarter under the current environment?
Chen Shaohui: the growth rate has decreased. If you compare it with the first quarter, you will find that it is actually falling continuously. There are several reasons. The first reason is well understood, that is, the impact of Xinguan cases and epidemic control measures. We are currently in the stage of capricious epidemic. There are more cases in the third quarter, which is larger than that in the same period last year In addition, some areas were damaged by floods, such as the flood in Henan Province at the end of July, which led to a sharp decline in takeout orders in this area. In August, a large number of new cases appeared in cities, and the control in these areas is quite strict. I would like to explain that people intuitively think that with the improvement of control methods More people will order takeout. When the epidemic occurs and the control is quite strict, we find that the order volume will drop sharply in some areas, such as tourist areas and office building areas. At this time, we can’t go to the office, but stay at home. These areas are very important to our takeout business. Therefore, the emergence of the epidemic will affect the takeout business Business has a great impact.
As for the macro environment, the growth rate of takeout business slowed down by 4% in the third quarter. If it is the compound annual growth rate in the past two years, it is actually negative by 1%. We believe that in view of the degradation of consumers’ consumption, the growth of takeout business may continue to slow down and consumers’ demand will decline in the next few quarters. We expect the fourth quarter, that is, this winter The situation will be repeated. The takeout business will continue to be affected in the above areas. We expect that the takeout business will be greatly impacted in the fourth quarter and the first few quarters of next year. In fact, the takeout business has its seasonality. Generally speaking, the fourth quarter will be lower than the third quarter, and the first quarter is generally off-season, even lower. However In the long run, takeout business is still a very potential business in China. Compared with other business areas, even if it is impacted, it has strong resilience, and the order volume has increased by 25% year-on-year. There are also some very gratifying figures, such as the single day order volume reached an ultra-high 50 million in August, while the single day order volume of milk tea category reached 1.2 million.

We believe that as we continue to expand to other categories and provide high-quality products, optimize the operation of these categories in different situations and continuously meet the different needs of consumers, consumers will continue to improve their order frequency and user viscosity. In addition, our monthly takeout membership reached an all-time high of more than 50 million. Overall, our long-term goal of taking out business has not changed, that is, the number of orders per day should reach 100 million.