China’s online food delivery-to-ticketing company Meituan Dianping reported a total loss of 115 billion yuan in last year, and an 11 billion yuan operating loss, dropping down by 190 percent compared to that of 2017, according to its announcement of financial results for the year which ended on Dec. 31, 2018.
In the fourth quarter, the Tencent-backed company has seen a revenue of 19 billion yuan, an 89 percent increase from the same period in 2017. However, the operating loss reached 3 billion yuan, a 144 percent growth, due to sharply rising labor costs that offset revenue increase.
SEE ALSO: Meituan-Dianping Named the World’s Most Innovative Company by Fast Company
Food delivery still has made up the most of Meituan’s revenue, as the segment contributed 11 billion yuan in the fourth quarter and 38 billion yuan in the whole year. The segment of in-store, hotel and travel followed, as it generated 4.6 billion yuan for Q4 and 15.8 billion yuan for 2018. When judged by gross profit or margin, in-store, hotel and travel surpassed food delivery as it achieved 89 percent of the gross margin, much higher than 13.8 percent from food delivery.
In 2018, the total transaction amount on all Meituan platforms reached 516 billion yuan, up by 44.3 percent year-on-year. The number of users that made transactions in 2018 exceeded 400 million, 100 million more than the year before. On average, each user made 23.8 transactions annually, up five from 18.8 in 2017. The number of annual active merchants grew by 32.1 percent from 4.4 million in 2017 to 5.8 million in 2018.
The Hong Kong-listed company also suffers a decrease of more than 11 percent on its shares today following the disappointing financial results.
For 2019, the company said it will continue the “Food+Platform” strategy, under which it will try to improve the platform’s monetization abilities, cautiously explore new initiatives and boost synergies between new endeavors and core businesses.
Featured photo credit to cn.wsj.com