Thematic Spotlight: Meituan Delivers Growth with AI at its Core

Meituan, a leading player in China’s food delivery and technology ecosystem, has emerged as a quiet powerhouse in AI innovation. Its Q3 results highlight the company’s ability to blend operational scale with cutting-edge technology, delivering a standout performance amidst a challenging macro environment. Total revenue rose 22% YoY to RMB93.6 billion, driven by strong growth in food delivery and quick commerce, both supported by AI advancements.1

Core Local Commerce: Strong Results from AI-Driven Efficiency

Meituan’s core local commerce segment reported a 20% revenue increase to RMB69.4 billion, with operating profits rising 44% YoY. The number of daily average delivery orders rose 15% YoY, reaching 19.4 million.2 This growth reflects the company’s ability to optimise delivery times, improve unit economics, and enhance customer experience through AI-driven route planning and dynamic pricing models. As food delivery becomes increasingly competitive, Meituan’s AI leadership has positioned it as a key innovator in the sector.

New Initiatives: Resilience and Strategic Investment

Revenue from new initiatives, including quick commerce and Instashopping, grew 29% YoY, while operating losses narrowed significantly.3 Meituan continues to expand its AI-powered platforms to address consumer demand for rapid delivery and convenience. Its quick commerce segment, a major growth driver, leverages AI for inventory management and predictive demand forecasting. Management’s commitment to innovation has enabled the company to explore synergies between its traditional food delivery and new retail initiatives.

AI-Driven Transformation in Food Delivery

Meituan’s investments in AI extend beyond logistics to include consumer insights and merchant support. These technologies help merchants optimise operations, target customers more effectively, and scale efficiently. As the company builds out its AI ecosystem, Meituan aims to strengthen its competitive moat and capture a larger share of the growing digital economy in China.

In Summary

Meituan’s Q3 performance underscores its strategic use of AI to drive growth and innovation across its business segments. From food delivery to quick commerce, the company is capitalising on AI-powered efficiencies to stay ahead in an evolving market. As China’s digital economy expands, Meituan is well-positioned to maintain its leadership and explore new opportunities in AI-driven commerce.

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Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at  03/12/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.