Meituan starts to look forward.

Text | Ren Cairu

Editor | Qiao Qian

"2024 is an important year for Meituan."

This was the first thing Wang Xing said at the conference call on the evening of March 21st. This year, Meituan's core businesses didn't face new aggressive competition. However, represented by the integration of the two major business groups of "home delivery and in - store services", the company's internal self - transformation was almost the most significant in recent years. Meanwhile, Meituan's successive successes in Hong Kong and the Middle East have continued the company's story in the new era.

Looking at the most recent Q4, what achievements has Meituan made?

In terms of revenue, Meituan's revenue in Q4 increased by 20.1% year - on - year to 88.5 billion yuan. Both the core local business and new business segments achieved double - digit growth. In terms of profit, the operating profit margin rose from 2.4% in the same period last year to 7.6%, achieving an operating profit of 6.7 billion yuan.

Overall, it was neither outstanding nor poor, basically meeting expectations. An important change is that Meituan didn't announce the growth rate of instant delivery orders this quarter. The slowdown of the takeaway growth rate has become the mainstream speculation. Flash sales and Xiaoxiang Supermarket maintained a good growth trend, while the in - store business remained in a seemingly endless competition.

The development of these mainstream businesses didn't differ much from the previous few quarters. However, some new topics began to be frequently discussed - going global and AI are the representatives.

Among them, the investment in going global has been visibly increasing. In terms of data, the overall narrowing range of the new business losses began to decrease. The operating loss almost doubled compared with the previous quarter, mainly due to the investment in overseas business. Earlier, the management had also given guidance on this, so investors had already had expectations.

AI is a more "future - oriented" but also "urgent" matter. At the conference call, Wang Xing said, "Please allow me to clearly convey a key message" - "In the initial stage of artificial intelligence, our strategy is to attack, not to defend. When such a fundamentally revolutionary thing appears, the only meaningful strategy is not to try to defend in the existing way."

Since the beginning of the year, the AI atmosphere at Meituan has reached a certain level. Wang Xing recently liked an article on the internal network at midnight. The content of the article was about the phased "decline" of Chinese Internet companies under the impact of AI. "People at Meituan also pay great attention to AI," a Meituan employee told 36Kr.

The integration of home delivery and in - store services continues, and the presence of in - store services increases

In 2024, Meituan described the growth rates of home delivery and in - store services in its financial report as follows - the instant delivery business achieved steady growth, and the in - store business achieved remarkable growth.

During the year of integrating home delivery and in - store services, there were intensive internal adjustments. Many employees from the takeaway business were transferred to the in - store business. The "Divine Member" extended the divine coupon system, which was originally only applicable to takeaway, to the in - store business, bringing a lot of traffic to the in - store business. This year, the order volume of the in - store business increased by more than 65% year - on - year. Both the number of annual transaction users and the number of annual active merchants reached record highs. Wang Xing also said that "the Divine Member attracted high - quality takeaway users to in - store merchants."

Focusing on Q4, Meituan's commission income achieved a strong growth of 23.88%, which was also "mainly due to the rapid growth of in - store business orders". This growth even partially offset the decline in AOV (average order value).

The synergistic effect brought by the Divine Member was also reflected in the delivery service income. This quarter, Meituan's delivery service income increased by 19.46% year - on - year. The official attribution mainly mentioned that "the Divine Member was launched nationwide, and the user subsidies deducted from the delivery service income decreased" - the Divine Member is a user subsidy and also a cost for Meituan. When its scope of use extends to in - store group - buying, the cost to be shared in home delivery will decrease.

Although the order growth was good, the competition in the in - store business still continued intermittently. The competition for merchants' advertising budgets is an important aspect of the competition between Meituan and Douyin in the in - store business. In Meituan's financial report, the "scissors gap" between its commission income and advertising income is also a reference for judging the competition situation.

In the previous quarter, the growth rate of Meituan's commission income began to be higher than that of online marketing service income. In Q4, the commission income increased by 23.88% year - on - year, still higher than the 17.74% increase in online marketing service income. This change is partly related to the general reduction of advertisers' budgets. However, the situation has been like this for two consecutive quarters, which also more or less reflects the intensification of the traffic investment competition.

As for the home delivery business, an insider's perception is that "the basic takeaway business has slightly stopped growing, and more resources are flowing to the in - store business."

Currently, Meituan's market share of over 70% in the takeaway business is difficult to be greatly shaken. More efforts are being made in self - innovation on the supply side - "Pinhaofan" and "Shenqiangshou" have been frequently mentioned in the financial reports of recent quarters. Among them, the order volume of Pinhaofan accounts for about 10% of the total takeaway market. The conference call said that "in 2024, the order volume of Pinhaofan continuously reached new highs, becoming an innovative model that benefits both merchants and consumers."

However, these are difficult to change the situation where the growth rate of food delivery has reached a bottleneck. Meituan CFO Chen Shaohui said that compared with Q3 in 2024, the order volume growth of food delivery and some non - food categories was weaker. In the previous quarter, the year - on - year growth rate of instant delivery orders was 14.5%.

A person close to Meituan Takeaway told 36Kr that "the effect of Pinhaofan is becoming more stable. The current main orientation is to optimize the supply of merchants. Shenqiangshou is still in the exploration stage. From the initial coupon - making to live - streaming and product coupons, the customer acquisition has not met expectations."

Fortunately, flash sales still added some highlights to the home delivery business. When answering investors' questions, Wang Xing admitted that "in recent years, the growth rate of the takeaway business has slowed down after reaching a high base", and also said that "Meituan Flash Sales continued to achieve strong performance, maintaining a growth rate far exceeding that of food delivery." Among them, the penetration in lower - tier cities and the participation of large - scale brands are important sources of growth.

According to Goldman Sachs data, the flash sales business achieved profitability in Q3 of 2024. When the concept of instant delivery has extended from food in the past to "everything", Meituan is the most promising player who has entered the market with an advantage. Chen Shaohui said at this quarter's conference call that "we have made great progress in converting more food delivery users into Meituan Flash Sales users."

The takeaway business is stabilizing, and the flash sales business is still in the growth stage. Together, they constitute the future of home delivery - "We maintain the vision and goal of achieving an average daily order volume of over 100 million for the on - demand delivery business," Wang Xing said.

The new protagonists emerging in new businesses

The shift of focus in new businesses has been quite obvious.

In 2024, Meituan Select, the former "big loss - reducer", successfully completed its mission. After a series of actions such as intensive warehouse closures, cleaning up inefficient groups, regional mergers, functional line changes, and product strength reconstruction, Meituan Select reshaped itself with the Guangdong region as a model.

In this Q4, the operating loss of Meituan's new business narrowed from 20.2 billion yuan in the same period last year to 7.3 billion yuan, and the operating loss rate improved by 20.6 percentage points.

As Wang Xing said, "Each new business is at a different stage and requires different levels of support from the company." As an area with high costs in the past, Meituan Select has not been abandoned. After focusing on key regions, eliminating white - label products, improving product capabilities, and differentiating from Duoduo Grocery, the management said that "Meituan Select is still one of our main models for exploring the grocery market. Compared with offline retail, Meituan Select aims to provide products of the same quality but at a lower price."

However, for a company, the narrative of reducing losses in star new businesses has become a bit dull. Going global has become a more attention - attracting investment direction. The significant increase in the losses of new businesses this quarter is a reflection of Meituan's accelerated global expansion.

From Hong Kong to the Middle East, Meituan's global expansion has really shaken the market.

Deliveroo, one of the three major takeaway platforms in Hong Kong, recently announced that it will officially leave the Hong Kong market on April 7, 2025. The platform had been operating in Hong Kong for 9 years, but after Keeta entered the market, its order market share continued to decline. In contrast, Keeta targeted the demand for single - person meals, penetrated from office areas, and offered heavy subsidies. In just one year, it became the number one in the local order market share.

In Q4 of 2024, Keeta was officially launched in Saudi Arabia and has now expanded to all major cities in Saudi Arabia. Morgan Stanley mentioned in "Seize the $30 - billion Middle East Opportunity" that "Keeta's expansion in Saudi Arabia is very rapid, and its order share is expected to reach 10%."

A user in Riyadh said, "Before Keeta came, the local takeaway delivery fee was high and the delivery time was long. Now there has been an improvement." When Keeta was launched, in addition to coupons, it also provided a timeliness guarantee mechanism of "compensating x Saudi riyals for every x minutes of delay". Driven by it, now when you open the local major takeaway platforms like HungerStation or Jahez, there are large - scale displays of discount offers and promotional subsidies on the main interface.

After Saudi Arabia, the next expansion is accompanied by greater uncertainty. The reason is that there are more obvious leading players in markets outside Saudi Arabia. In countries such as the United Arab Emirates, Kuwait, and Qatar, Talabat's market share is over 50%, and even exceeds 70%.

In the global expansion story, the protagonists are not just takeaway. Flash sales and Xiaoxiang Supermarket are also following up, but they are currently in a relatively less prominent position. Wang Xing said that at this stage, overseas business mainly focuses on takeaway. "For overseas business, although various businesses including Xiaoxiang Supermarket have long - term potential, we won't make hasty and aggressive investments in the short term."

Overall, going global is a new story with more "opportunity" attributes for Meituan, while AI has a bit of a "crisis" meaning.

Many Meituan employees said that currently, the whole company is focused on AI. There are various projects, open days, meetings, and learning groups emerging one after another. At the conference call, Wang Xing also elaborated on Meituan's three - tier AI strategy for the first time in detail - first, the application of AI in work, integrating AI into employees' daily work and business operations; second, product AI - enabled, in addition to integrating AI into existing B2B and B2C products, also launching brand - new AI - native products; third, building Meituan's own large - language model.

Currently, Meituan's internal large - language model "LongCat" has been put into use. Meituan's various businesses are also integrating with AI. The "Shenqiangshou" page is marked with "fully connected to the full - blooded version of DeepSeek R1 large - language model, with the large - language model selecting high - quality takeaway". Users on this interface will see some dishes with AI - commented labels, such as "excellent taste and large portion".

"All teams are working on it. Everyone is doing functions such as user interaction, AI summarization, and recommendation reasons, but actually they don't have much effect. Just do it first," the above - mentioned person said. "The most core purpose at this stage is to 'keep up with the times'."

"We are both excited and scared to see what's happening in front of us," Wang Xing said. For a large company that emerged in the mobile Internet era, in addition to doing well in current affairs, it is a more important proposition to get a seat at the next - generation table.