Meituan (HKG: 3690) (the "Company"), a leading technology-driven retail company in China, today announced the audited consolidated results of the Company for the year ended December 31, 2023.
Company Financial Highlights
For the full year of 2023, our revenues increased by 25.8% to RMB276.7 billion from RMB220.0 billion in 2022. Our Core local commerce segment achieved an operating profit of RMB38.7 billion in 2023, which increased by 31.2% from RMB29.5 billion in 2022. Meanwhile, the operating loss for our New initiatives segment narrowed to RMB20.2 billion in 2023 from RMB28.4 billion in 2022. Our profit for the year of 2023 was RMB13.9 billion, compared to the loss of RMB6.7 billion for the year of 2022. Our adjusted EBITDA and adjusted net profit increased to RMB23.9 billion and RMB23.3 billion in 2023, respectively. We also achieved an operating cash inflow of RMB40.5 billion in 2023. We held cash and cash equivalents of RMB33.3 billion and short-term treasury investments of RMB111.8 billion as of December 31, 2023
8 billion as of December 31, 2023
"During 2023, China's local service industry experienced faster growth than other retail sectors. We navigated through the industry evolvement and satisfied the diversified preferences from consumers and merchants via business iterations, and thus invigorated local consumption and created opportunities for employment," said Meituan Founder and CEO Xing Wang. "As the industry leader, we are well positioned to adapt to changes and capture more growth opportunities along the journey. We will firmly implement our 'Retail + Technology' strategy. We are fully committed to accelerate the digital transformation process of the industry and 'Help people eat better, live better.'"
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Meituan CFO Shaohui Chen said, "In 2023, thanks to the growth of service consumption in China and our accumulated industry know-hows, we swiftly adjusted our business strategies and maintained steady growth in the new consumption environment. Looking ahead, we will continue to iterate our core businesses, capture more growth opportunities, and enhance long-term moats. Our confidence in our business fundamentals and the long-term growth potential remains intact."
Company Business Highlights
Core local commerce
For the full year of 2023, revenue for the Core local commerce segment increased by 28.7% year over year to RMB206.9 billion, thanks to the rapid recovery of local businesses. Operating profit increased by 31.2% year over year to RMB38.7 billion, and operating margin improved slightly to 18.7% from 18.4% in 2022.
For the fourth quarter of 2023, segment revenue increased by 26.8% year over year to RMB55.1 billion. Operating profit increased by 11.1% year over year to RMB8.0 billion, and operating margin was 14.5% in the fourth quarter.
2023 marks the 10-year anniversary of our food delivery business. After continuous innovation and growth over the past decade, our food delivery business further solidified its market leadership and core competence in 2023. Annual Transacting Users of food delivery continued to grow, and mid-to high-frequency users, and their purchase frequency increased steadily. Having food and meals delivered in 30 minutes has become a new lifestyle. It now covers broader consumption categories and caters to a much larger consumer base. As consumer preference evolved throughout 2023, we proactively iterated our business strategies and refined our operations in products, marketing and supply. We expanded the scale of Pin Hao Fan to better satisfy consumer demand in value-for-money selections. Additionally, we refined our operations in high order value products, such as Shen Qiang Shou, Meal For One and Must-Order List. During the process, we enhanced two key competences. The first one is product display. We enhanced our content production capabilities across various formats, including graphics, texts, videos and live streaming, to nurture a vibrant content ecosystem. The other one is promotional schemes. We upgraded and simplified our membership program to make it easier to use by consumers and merchants alike. Our continuous improvement in the shelf-based model, combined with our enhanced marketing ability to sell mega-hit products, allows us to stimulate consumer demand more effectively
Our continuous improvement in the shelf-based model, combined with our enhanced marketing ability to sell mega-hit products, allows us to stimulate consumer demand more effectively
Meituan Instashopping posted another stellar growth with order volume increasing by over 40% year over year in 2023. After rapid expansion over the past five years, it plays a pivotal role in the on-demand retail industry, and connects millions of local retailers and brands with hundreds of millions of consumers. Compared to the food delivery users, the user base of Meituan Instashopping has higher stickiness to our platform and stronger purchasing power, with a significant portion being younger users. While we continued to improve our supply, we noticed that purchase frequency and spending of Meituan Instashopping users grew consistently. Meanwhile, annual Active Merchants of Meituan Instashopping grew by almost 30% year over year in 2023. As more offline retailers embraced the on-demand channel, the quality and diversity of our platform supply also enhanced. We partnered with around 400 brands and supported their transition to online operation. We also expanded our new supply formats to broader regions. Meituan InstaMart now covers more than 200 cities. Our improved supply capability has led to elevated user experience and robust growth in order volume. Moreover, we continued to optimize our platform solutions to cope with the evolving demand. For example, we offered consumers one-stop online health services. Consumers could get quick home testing, diagnose online, and have their medicines delivered. We also extended our coverage for 24-hour pharmacies and partnered with chain pharmacies to provide medical insurance payment options
We also extended our coverage for 24-hour pharmacies and partnered with chain pharmacies to provide medical insurance payment options
As we proactively captured the offline consumption rebound, GTV of our in-store, hotel and travel businesses increased by over 100% year over year in 2023. The year-over-year growths of Annual Transacting Users and Annual Active Merchants exceeded 30% and 60%, respectively.
In 2023, we continued to iterate business operations and drive industry transformation. During the year, we enhanced our ability in promoting value-for-money mega-hit products and enriched our video content offerings. Through the Special Deals sessions, we collaborated with high-quality merchants to offer a diverse selection of discounted deals and improved our traffic allocation efficiency. As a result, order volume from Special Deals increased rapidly. We also introduced a combination of live streaming programs, which includes Meituan platform live streaming, merchant live streaming and sales team live streaming. We can thereby provide vivid recommendations for consumers and satisfy their stockpiling needs. Throughout 2023, the transaction scale from live streaming increased rapidly. Consumers have become more willing to watch live streaming and place orders on our platform. Both Special Deals sessions and live streaming events helped us to further solidify our consumer mindshare of "Everyday Low Price"
Both Special Deals sessions and live streaming events helped us to further solidify our consumer mindshare of "Everyday Low Price"
Amidst the changing industry landscape, we continued to optimize our shelf-based search model in order to strengthen our competitive advantage. During 2023, by offering merchant incentives and joint-marketing programs, we not only deepened collaborations with high-quality merchants, but also provided consumers with value-for-money deals. We also lowered the threshold for subscription-based services, thus accelerating merchant onboarding and significantly expanding our merchant base. We provided comprehensive solutions and marketing tools for the newly opened merchants to support their business growth. As a trustworthy platform in local services, we helped merchants accumulate valuable digital assets like user reviews and transaction data to further improve their operations, while helping consumers make consumption decisions more easily. We further optimized our theme-based marketing events and organized more diversified online and offline promotions for our trusted "Must-Eat List", "Must-Eat Festival", and "Black Pearl List", which helped these high-quality merchants further enhance brand awareness and transaction conversions. In addition, we implemented direct operations nationwide to replace the former agency model, so that we can seize more growth opportunities in the lower-tier markets. Throughout the year, we also launched a series of measures to better meet consumer needs and incentivize consumption, such as offering add-on selections for combo meals, and providing delivery service options
Throughout the year, we also launched a series of measures to better meet consumer needs and incentivize consumption, such as offering add-on selections for combo meals, and providing delivery service options
For hotel and travel businesses, we effectively captured the strong industry rebound, by leveraging our expertise in leisure travel and our competitive advantage in the domestic market. Our domestic hotel GTV increased by over 100% year over year in 2023. We enhanced our platform supply and improved live streaming capabilities that could help consumers make informed decisions. Through a combination of live streaming and shelf-based model, we helped hotel merchants improve operational efficiency, acquire user traffic, and sell mega-hit products. We also iterated the Hotel+X products and leveraged our unique positioning in in-store dining to offer more diversified bundle deals. Our expanded effort in marketing and promotions led to record high reservation volume during holiday seasons in 2023. In addition, we further strengthened our presence in the high-star domain, and deepened merchant collaborations through joint marketing events and joint membership programs with high-star hotels. For alternative accommodations, we continued to expand supply, improve our service quality and enhance user experience, after achieving absolute leadership in the domestic market
For alternative accommodations, we continued to expand supply, improve our service quality and enhance user experience, after achieving absolute leadership in the domestic market
New Initiatives
In 2023, revenues from the New initiatives segment increased by 18.0% year over year to RMB69.8 billion. Operating loss narrowed to RMB20.2 billion, while operating margin improved to negative 28.9%, primarily attributable to improvement in operational efficiency across all businesses in this segment.
For the fourth quarter of 2023, revenues from the New initiatives segment increased by 11.5% year over year to RMB18.6 billion. Operating loss for the segment decreased by 24.1% year over year to RMB4.8 billion, and operating margin improved sequentially to negative 26.0%.
Growth of Meituan Select slowed down in 2023, as the market size of community e-commerce was relatively flat on year-over-year basis. Despite the year-over-year efficiency improvement, Meituan Select still made significant loss with high operating loss ratio during 2023 mainly due to: 1) scale growth was slower than expected which made it difficult to meaningfully lower fulfillment cost per item; and 2) fierce competition which made it difficult to improve price mark-up ratio and lower subsidies. While Meituan Select is still part of our online grocery strategy, we admitted this market was much tougher than we originally expected. We will make strategic changes and refine the business model in 2024, aiming to significantly reduce the operating loss. We will prioritize on building key competences and improving user experience, rather than focusing on market share. We plan to increase the price mark-up ratio and reduce subsidies in the future, paying more attention to the long-term growth of natural retention rate
We plan to increase the price mark-up ratio and reduce subsidies in the future, paying more attention to the long-term growth of natural retention rate
In December 2023, we upgraded the former Meituan Grocery to a new brand – Xiaoxiang Supermarket, which marks the official transition from grocery to online supermarket. During 2023, GTV from Xiaoxiang Supermarket increased by around 30% year over year. We further enhanced our market position and led the industry growth. During the year, we diversified our product selections to provide consumers with more high-quality items. We also enhanced our ability in private labels. As a result, sales contribution from private labels continued to grow. Our user base, average order value and purchase frequency all increased steadily, indicating a stronger consumer mindshare. Moreover, we steadily improved our operational efficiency through supply chain optimization and fulfillment cost reduction
Moreover, we steadily improved our operational efficiency through supply chain optimization and fulfillment cost reduction
Company Outlook and Strategy for 2024
Facing the new macro environment and competitive landscape, we proactively responded to the changes and iterated our business operations in 2023. We are convinced that the domestic consumption market has immense potential, and we are well-positioned to seize growth opportunities. As we venture into 2024, we will continue to enrich our product and service matrix that caters to a broader consumer base and merchant base. We will deep-dive into the intricacies of the on-demand delivery industry, as we firmly believe that having everything delivered to the consumers' doorsteps within 30 minutes will be the next era. In addition, with the continuous emergence of new consumption trends, digital transformation of the local service industry is inevitable, and there is tremendous room for its online penetration. As an industry leader, we will leverage our know-hows, solidify our core competencies, and continue to enhance our capabilities, to facilitate the digital transformation process. Moreover, we will make our utmost effort to benefit all the participants in our ecosystem, create more job opportunities and realize greater social value. We are firmly committed to implementing our "Retail + Technology" corporate strategy and fulfilling our mission that "We help people eat better, live better"
We are firmly committed to implementing our "Retail + Technology" corporate strategy and fulfilling our mission that "We help people eat better, live better"
For the full announcement of Meituan for the year ended December 31, 2023, please visit: https://media-meituan.todayir.com/20240322164002157811109781_en.pdf
About Meituan
Meituan (HKG: 3690) (the "Company") is a leading technology-driven retail company in China. With the mission of "We help people eat better, live better," the Company uses technology to connect consumers and merchants. Service offerings on its platform address people's daily needs for food and retail goods and extend further to broad lifestyle and travel services. Meituan is the world's leading on-demand food delivery service provider and China's leading e-commerce platform for in-store dining services. Meituan helps consumers discover merchant information, make informed decisions, complete online and offline transactions and enjoy on-demand delivery. The Company currently owns several household brands in China, including Meituan, China's leading online marketplace for services, Dianping, China's leading online destination for discovering local services, Meituan Waimai for on-demand delivery services, and Meituan Bikes for bike-sharing services. The Company operates in over 2,800 cities and counties in China
The Company operates in over 2,800 cities and counties in China
Forward-Looking Statements
This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website
Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website
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Meituan (HKG: 3690) (the "Company"), a leading technology-driven retail company in China, today announced the unaudited consolidated results of the...

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