Meituan to Invest RMB11 Billion to Support Merchant Development


Meituan (HKG: 3690) (the “Company”), China’s leading e-commerce platform for services, announced at the 2019 On-demand Delivery Industry Conference that it will invest RMB11 billion (US$1.65 billion) this year to support merchants to upgrade their operations and drive the robust growth of China’s “Delivery Economy”.

Meituan will make the investment to support merchants in their marketing efforts, digital upgrades, and supply chain services, as well as to provide awards and incentives for innovation. Meituan will also leverage its platform advantages to provide comprehensive services for merchants, including marketing, delivery, IT, supply chain, operations, and finance, to meet merchants’ business upgrading needs, and to help improve the efficiency of its delivery ecosystem.

The “Delivery Economy” has been booming in China. The daily on-demand delivery orders at Meituan exceeded 24 million in 2018 with more than 300 million consumers enjoying food delivery services. Meituan was working with over 3.6 million merchants on food delivery and its delivery riders earned more than RMB30 billion in 2018.

“In the new ‘Delivery Economy’, consumers, merchants, our platform and delivery riders have formed a close ecosystem,” said Wang Puzhong, Senior Vice President of Meituan and President of its At-Home Business Group. “Ecosystem development is more important than market competition. As a delivery service platform, Meituan is willing to invest more resources to support the ecosystem growth, especially the merchants.”

The on-demand delivery industry has shifted its growth from population-driven to efficiency-driven, added Wang. The continuous growth of the industry will rely on improving efficiencies of merchants, which can be achieved through technology innovation, digital operations and business upgrades.

There are some new trends in the “Delivery Economy”, which were discussed at the 2019 On-demand Delivery Industry Conference. The on-demand delivery service has gone beyond food deliveries in China to cover apparel, flowers, fruit and many other products.

The demand for delivery services has been growing fast in second-tier and third-tier cities. Small towns have become a new engine to drive the market growth. With the upgrade of consumption, there are also more diversified needs for deliveries. Orders for breakfast, dessert and late-night snacks have surged over the past year. For example, orders for late-night snacks jumped by 40% on the opening night of 2018 World Cup.

“Meituan is a valuable platform for merchants in terms of traffic acquisition, big data support and delivery services,” said Han Jian, General Manager of the On-demand Delivery Service group at Meituan. “Meituan will focus on providing digitalized, intelligent and personalized services for merchants to help improve efficiency on the supply side.”

More than 300 representatives from leading restaurants in China attended the 2019 On-demand Delivery Industry Conference, including Grandma’s Diet, Xibei Oat Noodle Village, Meizhou Dongpo Restaurant, Hehegu, and Luckin Coffee.

“On-demand delivery services have transformed the catering business in China,” Wu Guoping, founder of Grandma’s Diet, said at the conference. “Restaurants can now increase revenue without much additional investment in rent and labor. With Meituan’s digital technologies, we can achieve better growth through optimized menu and improved efficiency.”

About Meituan
Meituan (HKG: 3690) (the “Company”) is China’s leading e-commerce platform for services. With the mission of “We help people eat better, live better,” the Company’s platform uses technology to connect consumers and merchants. Service offerings on the platform address people’s daily needs for food, and extend further to broad lifestyle and travel services. According to the iResearch Report, Meituan is the world’s largest on-demand food delivery service provider and China’s largest e-commerce platform for in-store dining services in 2017. It currently operates the world’s largest on-demand delivery network in terms of the number of deliveries in 2017. 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 by GTV in 2017, Dianping, China’s leading online destination for discovering lifestyle services by MAU in 2017, Meituan Waimai for on-demand delivery services, and Mobike for bike-sharing services. Meituan had 382.3 million Annual Transacting Users and 5.5 million Annual Active Merchants by the end of third quarter 2018. The Company operates in over 2,800 cities and counties in China.

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