Food delivery giant Meituan Q2 revenue rises 8.9%, beats estimates
CGTN
After three consecutive profitable quarters, the company said the loss for the first quarter ended March 31 was 1.58 billion yuan (221.27 million U.S. dollars). /Reuters

After three consecutive profitable quarters, the company said the loss for the first quarter ended March 31 was 1.58 billion yuan (221.27 million U.S. dollars). /Reuters

China's Meituan Dianping, whose on-demand service apps span grocery delivery and hotel booking, reported a steeper-than-expected rise in second-quarter revenue on Friday as eased lockdown measures saw more people venture out.

Revenue in the April-June quarter rose 8.9 percent to 24.72 billion yuan (4.89 billion U.S. dollars), topping the 23.48 billion yuan average of 16 analyst estimates, IBES data from Refinitiv showed.

After three consecutive profitable quarters, the company said the loss for the first quarter ended March 31 was 1.58 billion yuan (221.27 million U.S. dollars), compared with a 1.43 billion yuan loss for the year-earlier period, as a result of the social distancing and lockdown measures to fight the COVID-19 pandemic.

But in the second quarter, as the spread of the contagious disease is in the country's grip, lockdowns were gradually lifted. Affected by the novel coronavirus outbreak, restaurants saw fewer dine-in customers and had heavy rent, and payroll burdens revealed a survey conducted by the Meituan Research Institute.

Many restaurants turned to food delivery to increase their income and tide over difficulties. Some 55 percent of the businesses surveyed said they would develop their dine-in and delivery services equally in the future.

Beijing-based Meituan reported a profit for the period of 2.21 billion yuan, up from 875.8 million yuan a year earlier.

Meituan earns more than half of its revenue from food delivery, where it controlled 67 percent of the Chinese market in the first quarter, showed data from researcher Trustdata.

Its operations likely recovered to pre-pandemic levels in the second quarter in terms of traffic and revenue, China Merchants Securities analysts said in a research note prior to the results.

On Friday, Meituan said its second-quarter revenue for the segment grew 13.2 percent to 14.54 billion yuan.

On Thursday, Ele.me, one of China's leading online food delivery service backed by Alibaba Group, claimed the number of its registered merchants increased by 30 percent year over year of June 30, 2020.

Food delivery services are not new, but apps and smartphones are expanding the reach of delivery services. By the end of 2019, the number of food delivery consumers in China reached 460 million, roughly half of the country's internet users.

(With input from Reuters)