HONG KONG, March 25, 2022 /PRNewswire/ -- Meituan (HKG: 3690) (the "Company"), China's leading e-commerce platform for services, today announced the audited consolidated results of the Company for the year ended December 31, 2021.
Company Financial Highlights
In 2021, we upgraded our corporate strategy from "Food + Platform" to "Retail + Technology", further expanding our product and service offerings to the broader retail, connecting with more market participants, and leveraging technology to facilitate advancement across industries. Our businesses growth remained strong, with total revenues increasing by 56.0% year over year to RMB179.1 billion in 2021. The aggregate operating profit for the food delivery and the in-store, hotel & travel segments reached RMB20.3 billion in 2021, up from RMB11.0 billion in 2020. Operating loss for the new initiatives and others segment expanded as we remained committed to business areas that would bring long-term value. Both adjusted EBITDA and adjusted net profit experienced year-over-year decrease and turned to negative RMB9.7 billion and adjusted net loss of RMB15.6 billion in 2021, respectively. Our net cash flows from operating activities turned to an outflow of RMB4.0 billion in 2021 from an inflow of RMB8.5 billion in 2020. We had cash and cash equivalents of RMB32.5 billion and short-term treasury investments of RMB84.3 billion as of December 31, 2021, compared to the balances of RMB17.1 billion and RMB44.0 billion as of December 31, 2020, respectively.
"For the full year of 2021, we continued to innovate and leverage technology to provide consumers with more diverse and higher-quality services. Meanwhile we were committed to assisting small- and medium-sized merchants accelerate their digital transformation. Following our upgraded corporate strategy 'Retail + Technology', we expanded our goods and services metrics and improved our service quality," said Meituan Founder and CEO Xing Wang.
"We believe that the fundamentals of China's long-term economic growth will not change. We will continue to invest in technology and unswervingly improve our businesses," said Wang. "In 2022, we will focus on high-quality growth, build fundamental capabilities for long-term development, support merchants to deal with difficult times, bring more convenience to people's lives, create new forms of digital life and employment opportunities, and better fulfill our social responsibilities based on the overall dual circulation economic development goals, truly creating more values for society," concluded Wang.
Meituan CFO Shaohui Chen said, "The local service industry underwent many challenges last year. Helping partners to overcome difficulties was our top priority, and it will continue to be so in 2022. The development of Meituan is empowered by China's economic environment, and is supported by our merchants, couriers and users. China has become the world's largest and most vibrant consumer market. We believe that digital and retail transformation will continue to boost China's economy. We remain confident in our ability to seize long-term opportunities and achieve sustainable growth, and will continue to create further value for all partners in our ecosystem."
Company Business Highlights
Food delivery
Despite challenges from the macro environment, natural disasters and sporadic COVID-19 outbreaks, our food delivery business achieved strong growth in 2021. Annual Transacting Users and average transaction frequency broke record highs. Our daily order volume exceeded 50 million in August and subsequently reached historic highs again in December 2021. GTV increased by 43.6% year over year to RMB702.1 billion, and revenue increased by 45.3% year over year to RMB96.3 billion in 2021. Operating profit increased to RMB6.2 billion in 2021 from RMB2.8 billion in 2020, while operating margin increased to 6.4% from 4.3%. Our solid business performance in 2021 was a testament to our resilient business model and competitive strength in consumer base, merchant base and delivery network.
For the fourth quarter of 2021, GTV of our food delivery business increased by 20.7% year over year to RMB188.6 billion, with daily average order volume increasing by 17.4% year over year to 42.5 million. Our revenues from food delivery business increased by 21.3% year over year to RMB26. 1 billion. Operating profit from our food delivery business increased to RMB1.7 billion for the fourth quarter of 2021 from RMB882.4 million for the fourth quarter of 2020, while operating margin increased to 6.6% from 4.1%, primarily attributable to higher portion of online marketing services revenue and lower seasonal courier incentives.
We are glad to see that food delivery has become an essential service for consumers. We have not only diversified selections for consumers, but also continued to identify the evolving consumption trend and to promote the growth of new consumption categories. Categories such as late-night snacks, milk tea, salads and light meals witnessed notable growth during the year. The increase in supply effectively incentivized higher order volume from the mid- and high-frequency users. As a result, food delivery annual Transacting Users increased by 13% year over year, and annual average transaction frequency increased by 25% year over year. The growth demonstrates consumers' ongoing trust in our platform and their recognition of food delivery as an indispensable service in daily life.
On the merchant side, we continued to help millions of restaurants digitize their business operations through comprehensive services and online marketing tools, bringing additional business volumes to help merchants generate income under this challenging environment. An increasing number of merchants used our online marketing products and stepped up in their online promotions given the effectiveness of boosting consumer demand. We make our utmost efforts to understand our merchants' pain points and address their issues, as it is crucial for us to provide support and create value for them. In May 2021, we rolled out a new fee structure that splits fee charged from merchants into a technology service fee, which is the commission revenue, and a food delivery services fee. The new fee structure promotes more transparent pricing and clearer cost structures, and benefits the majority of the small- and medium-sized merchants on our platform. Starting from the fourth quarter of 2021, we separately disclosed the food delivery services revenue to reflect this new fee structure in our financial results.
For the twelve months ended December 31, 2021, around 5.27 million food delivery couriers earned income through our Meituan platform. We continued to promote our "Tongzhou Project" to ensure proper rights and interests of food delivery couriers, and prioritized enhancing courier experience and creating a positive ecosystem. To better understand the couriers' needs, we held 136 courier feedback sessions in 2021. We continued to optimize our algorithms and rules taking into account the couriers' feedback. For example, we changed the display of estimated delivery time of each order from a point of time to an extended period of time, alleviating pressure of couriers during delivery. In some regions, we launched various pilot programs, such as only scheduling courier pickup after meals are ready to reduce the wait time and reassigning orders to other couriers in unexpected situations. These measures help dispatch orders to couriers in a more thoughtful manner while ensuring their safety, and enable couriers to earn relatively higher income with more reasonable workload. We also worked with our delivery partners to launch a pilot scheme to optimize the service quality assessment mechanism, which changes the practice of income reduction due to consumer bad reviews or late delivery into point reduction for the couriers, so that they can make up for the loss of points through other performance and activities. The couriers' monthly rewards are linked to the accumulated points of the month. This optimized scheme effectively mitigates financial impacts on couriers due to occasional, unexpected situations, while ensuring consumer experience simultaneously. In the adverse weather conditions in the fourth quarter, we increased courier incentives and distributed one million pieces of cold protection apparel to couriers in affected markets. We also provided free accommodations and quarantine subsidies for couriers who were affected by the COVID control measures. Furthermore, we continued to implement various charity programs that offer support for thousands of couriers' families. We provided couriers with full scholarships, allowing them to undertake further education and receive a higher degree without financial burden. In the meantime, we are actively cooperating with the arrangements of the pilot program that provides couriers with occupational injury insurance, under the guidance of the relevant authorities. We will fulfill our corporate responsibilities, ensure that the pilot program meets the planned timeline, and cover all expenses for participating couriers. Going forward, we plan to provide couriers with a more comprehensive welfare scheme and worker benefits, along with continued improvement on their sense of fulfillment and well-being.
In-store, hotel & travel
Despite the negative impacts from sporadic COVID-19 outbreaks and macro environment, our in-store, hotel & travel segment still achieved solid growth. During the year, we continued to bring broader consumption categories to cope with the ever-evolving demands from consumers, while onboarding more merchants and introducing diverse online solutions to the merchants. As a result, revenues from the in-store, hotel & travel businesses increased by 53.1% year over year to RMB32.5 billion in 2021. Operating profit from the in-store, hotel & travel businesses increased to RMB14.1 billion in 2021 from RMB8.2 billion in 2020, while operating margin increased to 43.3% from 38.5%.
For the fourth quarter of 2021, revenues from our in-store, hotel & travel businesses increased by 22.2% year over year to RMB8.7 billion. Operating profit for the segment increased to RMB3.9 billion from RMB2.8 billion for the fourth quarter of 2020, while operating margin increased to 44.7% from 39.5%, due to change in revenue mix.
For in-store, our transaction volume, GTV, and annual active merchants all reached record highs. We deepened penetration into lower-tier cities in China with broader coverage scope, and helped accelerate the digitization process in these under-served markets. Categories such as leisure and entertainment, sports, elderly care, medical care, and pet care demonstrated strong growth momentum, while categories such as handicraft activities, music recording, interactive light shows, and stress relief emerged as a new consumption trend. Moreover, we continued to introduce tailored products and services for merchants from different categories, helping them improve online operations. On the consumer side, we not only offered increasingly convenient and diverse products, but also effectively stimulated consumption through various marketing and promotional campaigns during holiday seasons, which further strengthened consumer mindshare of Meituan as the "go-to destination for local services".
For hotel & travel, although regional COVID-19 outbreaks and strict travel restrictions brought negative impact, we still withstood the challenges and helped hotel merchants recover. In 2021, our domestic hotel room nights grew 34.5%, thanks to the industry recovery and our strategic focus on the domestic travel market, local accommodations, and short-haul travel scenarios. In addition, we solidified our competitive advantage in the low-star domain, bringing offline users to our online platform, and helping more hotel merchants digitize operations. For high-star hotels, room nights contribution exceeded 16.5% in 2021, thanks to our continued improvement in high-star supply and consumer service quality.
New initiatives and others
We continued to expand investments in new initiatives, especially in goods retail, as we upgraded to the "Retail + Technology" strategy. Revenues from the new initiatives and others segment increased by 84.4% year over year to RMB50.3 billion in 2021. Operating loss from new initiatives and others segment expanded to RMB38.4 billion in 2021 from RMB10.9 billion in 2020, while operating margin decreased 36.6 percentage points year over year.
For the fourth quarter of 2021, revenues from the new initiatives and others segment increased by 58.7% year over year to RMB14.7 billion. Operating loss for the segment increased year over year to RMB10.2 billion for the fourth quarter of 2021, while the operating margin improved to negative 69.5% sequentially.
For Meituan Select, thanks to clear regulatory guidance and positive market environment, we achieved healthy growth as a major market player. We continually iterated our business model and actively built up various aspects of our long-term capabilities. By continually optimizing our operations at different nodes, we improved operating efficiency and unit economics throughout 2021. The three-level logistics network system established by Meituan Select, which fulfills next-day pick-up orders, now covers the majority of neighborhoods and villages in 30 provinces across China. We continued to provide larger and more diverse SKU offerings while improving delivery efficiency and reliability. The launch of our fresh produce direct sourcing program allowed us to effectively match production and demand through both centralized and demand-based procurement process, in turn generating additional revenues for farmers. Residents in rural areas also have more convenient access to abundant and value-for-money daily necessities that previously only urban residents could obtain, eliminating the urban-rural consumption gap and further empowering modern agriculture. We launched a growth scheme for new agricultural merchants to help them continually improve cultivation techniques and provide vocational training in rural areas, focusing on e-commerce skills and operations. Meituan Select also provides a large number of flexible jobs for pick-up station managers, and creates an increasing number of job opportunities in logistics, warehousing, and processing. Thanks to our rapidly built supply chain and logistics system, the Meituan Select team actively responded to the government's call for assistance in Zhengzhou, Xi'an, and other cities affected by COVID-19 and natural disasters, providing a reliable supply of necessities to people in need. Looking forward, strictly adhering to regulatory requirements is our top priority, as we continue to strive for balanced, high-quality growth. We will focus on developing our own capabilities, while enhancing consumer experiences.
Meituan Instashopping delivered another stellar growth in 2021, with highest daily order volume exceeding 6.3 million in December 2021. Leveraging our location-based e-commerce platform and on-demand delivery network, we offered consumers diverse selections of retail goods and convenient on-demand delivery services, and successfully converted a large number of high-quality food delivery users into Meituan Instashopping users. On the supply side, we expanded product categories and collaborated with more high-quality local stores. We provided local retailers with comprehensive suites of online solutions and tools, effectively helping the store owners digitize operations and improve efficiency. As a result, categories such as flowers, supermarkets and convenience stores maintained high growth momentum. Earlier this year, we rolled out the 24/7 medicine delivery services and received positive feedbacks from consumers, as it addressed consumers' urgent needs for medicine. We firmly believe that the endgame of the retail industry is "Everything Now", and we will continue to leverage our strengths and capabilities to facilitate such transformation.
For Meituan Grocery, we continued to grow our user base and GTV in 2021. After completing coverage in four existing tier-one cities, we provided more diverse SKU selections and better experience for consumers. We also optimized our product structure, enhanced warehousing and logistics capabilities, and refined operations at front-end distribution centers, which altogether led to continued improvement in efficiency and unit economies.
Company Outlook and Strategy for 2022
As we entered 2022, we still face challenges from COVID control measures and weakening consumption environment. Nevertheless, we are confident that we will be able to navigate through hard times and obstacles and achieve healthy growth, as we continue to strengthen our fundamental capabilities for the long term. With regard to our food delivery and in-store, hotel & travel segments, we will focus on high-quality growth, enhance user experience for both consumers and merchants, solidify our competitive advantage, and constantly improve operating efficiency. Meanwhile, we remain committed to facilitating the digital transformation process across industries, and will place additional emphasis on the long-term value creation and social responsibility fulfillment along the journey. Furthermore, we will continue to implement the upgraded "Retail + Technology" strategy, better help small and micro merchants to cope with difficult times, bring more convenience to people's lives, and in particular, provide reliable supply of daily necessities for people in the affected areas by the pandemic. As our goods retail business grows, we expand our network of partners, from mainly urban- and county-based merchants to rural-based "new farmers". We will commit our support in promoting "rural revitalization", and will bring high quality products and services to tens of thousands of villages in China. In addition, we will continue to create a wide range of job opportunities while placing particular emphasis on the welfare and needs of flexible workers. Particularly, for our food delivery couriers, we will always take their rights and interests as top priority, and make our best efforts in improving their welfare and benefits. Last but not least, we will continue to leverage technology and innovations to bring more value for all the market participants, and contribute to the high quality development of digital economy.
For the full announcement of Meituan for 2021, please visit:
http://media-meituan.todayir.com/20220325165602561510172324_en.pdf
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. Meituan is the world's leading on-demand food delivery service provider and China's leading e-commerce platform for in-store dining services. 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, Dianping, China's leading online destination for discovering local services, Meituan Waimai for on-demand delivery services, and Meituan Bikes for bike-sharing services. Meituan has 690.5 million Annual Transacting Users and 8.8 million Annual Active Merchants as of December 31, 2021. The Company operates in over 2,800 cities and counties in China.
Forward-Looking Statements
This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.
For media inquiries, please contact:
Meituan
pr.global@meituan.com
ir@meituan.com
Edmond Lococo
ICR Inc.
Email: Edmond.Lococo@icrinc.com
Tel: +86 138-1079-1408
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