Meituan, the Chinese food delivery giant, reported its biggest quarterly loss since 2018 as the company took a hit from a nationwide crackdown on tech firms and fierce competition in the region.
Photo credit: Meituan-Dianping
The Tencent-backed firm posted a loss of 10 billion yuan (US$1.57 billion) in the third quarter of 2021, compared with a profit of 6.3 billion yuan (US$985.9 million) in the same quarter a year ago. The company’s fourth consecutive quarterly loss comes after Meituan swallowed a fine of US$533 million for violating antitrust rules.
Beijing’s wide-ranging tech crackdown has raised investor concerns around sectors including ecommerce, fintech, data security, after-school education, gaming, and the gig economy. It has also brought several Chinese firms including Tencent and Alibaba, under scrutiny from the government.
“We will operate in accordance with the law, consciously maintain orderly fair competition, earnestly fulfill our responsibility to the society, better obey, and serve the socioeconomic development,” Meituan said in a statement.
See also: How can ByteDance’s food delivery play succeed?
Meanwhile, Meituan’s topline jumped by 37.9% to US$7.6 billion in the quarter, with revenue from its core food delivery business climbing 28% to hit US$4.15 billion.
Meituan has also been expanding into the hotel-booking and community group-buying spaces, as the company sets itself up to take on rivals like Alibaba and Pinduoduo. Revenue from Meituan Select, its community group-buying service, surged 66.7% year on year to US$2.1 billion.
Currency converted from Chinese yuan to US dollar: US$1 = 6.39 yuan.
Editing by Collin Furtado and Arpit Nayak
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