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Business
Meituan to expand delivery unit beyond food in search of new income sources
CKN
2019/05/09 03:26:58
2,529
meituan delivery; food takeout business;

May 09, 2019 (China Knowledge) - Meituan-Dianping is planning to offer its delivery services to more customers and industries under its “Meituan Delivery” brand as it looks towards new income streams to support its loss-making operations.

To do so, the company aims to build a more flexible delivery platform that will be able to offer customized services to customers from different industries through upgrading its delivery dispatch system and infrastructure.

At the moment, Meituan’s is focused on the food delivery business which accounted for 60% of its revenue last year. However, fierce competition from food delivery rivals and its cash-burning bike sharing business had forced it into the red, resulting in a net loss of RMB 8.5 billion last year, up nearly threefold from RMB 2.85 billion in 2017.

Meituan now has more than 600,000 active daily riders making 25 million food delivery orders daily. It also serves 3.6 million merchants and 400 million people in China. In comparison, rivals Ele.me has 670,000 riders and 3.5 million merchansts.

With the change, Meituan will now be able to seek customers outside of the food delivery business, allowing the company to better leverage the vast delivery network it has built up and potentially find higher profit margins.

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