On 28 May, Meituan made two seemingly unrelated moves, but both are escalations to the current “war” in the “instant retail” and food delivery field. The first was that the food delivery platform released its Q1 financial report. The disclosure shows that Meituan earned 86.6 billion RMB (12.2 billion USD), an 18% year-on-year (YoY) increase.
Meituan’s net profit was 10.1 billion RMB (1.39 billion USD), up 87.3% from last year, and the adjusted net profit was up 46.2% at 10.9 billion RMB (1.5 billion USD). Its core “local commerce”, including food delivery, hotel and travel, its “flash buy” instant delivery, etc., also grew 18% in Q1 to 64.3 billion RMB (8.93 billion USD).
The “flash buy” (闪购) service was Meituan’s entrance into the “instant delivery” business. By the end of March, it had already amassed over 500 million users nationwide, mostly young consumers of the post-90 and post-95 generations. Meituan announced earlier that the “flash buy” service would be available during the 618 Shopping Festival this year by giving away 618 RMB (85.78 USD) worth of vouchers to every user, with members eligible for more vouchers.
With the competition between platforms heating up since JD.com entered the food delivery market earlier this year, Meituan vs JD vs Alibaba has also moved into instant delivery and “local life” services. Meituan is expanding the presence of its Xiaoxiang supermarket, including offline. Meanwhile, Alibaba is strengthening its Ele.me food delivery and “flash buy” instant deliveries. This 618 sees a “battle of ecosystems” surrounding the broader “local life” sector. With groceries “delivered under 30 minutes” and online integration between “seeding” and transaction, it certainly looks like this is the trend.