Looking at the financial reports of Internet companies, we will often be confused about why these platform giants who lie down to make money always say that they have made huge losses. Netizens often joke that it is not a real loss, but this year wants to make 30 billion, in fact, only 10 billion, so it is said that the loss is 20 billion.
It should be said that except for a few Internet companies that are still burning money to prove their business models, those platform giants that we are familiar with have long been able to make profits on a large scale.
Meituan is such a company, and the strength of Meituan can definitely rank in the top few in China's Internet companies. However, in the latest 2021 financial report, Meituan said that it lost 15.57 billion yuan. So how did me lose money?
First, Meituan's revenue was 179.1 billion yuan, an increase of 56% year-on-year
On March 25, Meituan released its fourth quarter and full-year financial reports for 2021. In 2021, Meituan's annual revenue was 179.1 billion yuan, an increase of 56% over 2020. Meituan's net loss in 2021 was 15.57 billion yuan, compared with Meituan's net profit in 2020 was 3.12 billion yuan.
Regardless of the loss figures, the performance growth of the US group is still very eye-catching.
Meituan's two main businesses are catering takeaway business and in-store business.
In the catering takeaway business, the transaction amount increased by 43.6% year-on-year to 702.1 billion yuan, and the revenue increased by 45.3% year-on-year to 96.3 billion yuan. Operating profit increased by 121% year-on-year to RMB6.2 billion, and operating margin increased from 4.3% to 6.4%.
In the arrivals, hotels and tourism business, revenue increased by 53.1% year-on-year to MOP32.5 billion, operating profit increased by 72% year-on-year to RMB14.1 billion, and operating margin increased from 38.5% to 43.3%.
In 2021, Meituan's revenue from new business and other segments also surged 84.4% year-on-year to RMB50.3 billion.
Second, where did me's huge losses come from?
Since Meituan's operating income and main business operating profit margin have risen a lot in 2021, how did Meituan lose money?
1. The operating loss of new business was 38.4 billion
Most Internet companies are in the anxiety of scale expansion and are constantly expanding business boundaries.
Although Meituan's core business takeaway and in-store business operating profits were 6.2 billion yuan and 14.1 billion yuan respectively, Meituan's new business experienced an operating loss of 38.4 billion yuan in 2021.
This makes me a net loss of 15.57 billion yuan. The operating loss of Meituan's new business in the same period of 2020 was 10.9 billion yuan, compared with 2020, Meituan lost 27.5 billion yuan more in new business in 2021.
Meituan's new business includes Meituan Preferred, Meituan Flash, Meituan Grocery, B2B Catering Supply Chain and Bike Sharing Business.
With the blessing of huge investment, the revenue of Meituan's new business and other segments in 2021 increased by 84.4% year-on-year to 50.3 billion yuan.
Meituan explained that the loss of new business mainly comes from investment in infrastructure such as warehousing and logistics. The biggest investment in the new business is undoubtedly the head enterprise of Meituan's preferred community group purchase.
In 2020, community group buying has sprung up and become an outlet industry. Even if the People's Daily criticizes "don't just worry about the flow of a few bundles of cabbage and a few pounds of fruit" and "the sea of stars of scientific and technological innovation is more exciting", giants still flock to the community group buying market. In the end, Meituan and Pinduoduo won the community group buying war.
For Meituan, the 38.4 billion operating loss of new business in 2021 has greatly increased the number of users of Meituan and also gained a foothold in the e-commerce market.
2. The anti-monopoly fine of the State Administration for Market Regulation was 3.442 billion yuan
On October 8, 2021, the State Administration for Market Regulation imposed an administrative penalty on Meituan's "two alternatives" monopoly in the field of takeaway in accordance with the law. Ordered Meituan to stop the illegal acts, fully refund the exclusive cooperation deposit of 1.289 billion yuan, and imposed a fine of 3% of its sales of 114.748 billion yuan in China in 2020, totaling 3.442 billion yuan.
3. R&D expenditure of 16.7 billion yuan
Meituan's R&D expenditure in 2021 reached 16.7 billion yuan, an increase of 53.1% year-on-year, making it the company with the largest growth among Internet manufacturers.
Obviously, for Internet giants like Meituan, profitability has long been not a problem. As long as new business investment and R&D expenditure are reduced, at least tens of billions of profits a year are not a problem at all.
The same is a loss, some Internet companies have not yet found a profit model, and Internet giants such as Meituan are not in a hurry to make a profit.
Third, the US group posted 14 billion takeaways a year?
Regarding the loss of the US group, many media reports said that the US group posted 14 billion yuan a year to deliver takeaways, sending a single loss of 1 yuan. This statement is actually not true.
As mentioned above, Meituan's catering takeaway business revenue in 2021 increased by 45.3% year-on-year to 96.3 billion yuan, and operating profit increased by 121% year-on-year to 6.2 billion yuan. That is to say, Meituan's takeaway business made a net profit of 6.2 billion yuan.
So why is there a saying that meituan posted 14 billion takeaways?
This is because Meituan divided the commission income of the previous takeaway into two parts in the latest financial report, the delivery service revenue and the platform technology service fee.
In the third quarter of 2021, the commission income of the Meituan catering takeaway part was 23.2 billion yuan, accounting for 87.68% of the total revenue of the catering takeaway.
However, in the fourth quarter and annual financial report of 2021, Meituan split the commission income into catering takeaway delivery service revenue and platform technology service fee income. Food & Beverage Takeaway Revenue includes Food & Beverage Delivery Services, Commissions, Online Marketing Services and others. Among them, the revenue of catering takeaway delivery service was 54.2 billion yuan, accounting for 56%; the commission income was 28.5 billion yuan, accounting for 29.6%.
After splitting the commission, the cost of Meituan riders is higher than the revenue of the delivery service.
In 2021, Meituan has more than 5.27 million riders, and the cost of Meituan's catering takeaway delivery is 68.2 billion yuan, an increase of 38.3% over 2020, and the rider cost accounts for 71% of the catering takeaway revenue.
The annual revenue of catering delivery services was 54.2 billion, which led to the saying that Meituan posted 14 billion yuan to deliver takeaways.
Fourth, what is the trouble with the US group?
Despite its beautiful performance, Meituan has also become the boss in the community group buying market. But there are also many troubles in the US group.
Meituan's stock price has fallen and fallen since last year, and although it has rebounded in recent days, its stock price is now only 159.1 Hong Kong dollars per share, with a market value of 976.4 billion Hong Kong dollars. Since 2022, Meituan's share price has reached a low of HK$103.5, down more than 40% and more than 70% at its all-time high in February 2021.
The loss on the financial report is not a big deal, in order to transform the "retail + technology" company, Wang Xing will not hesitate to lose money for a few more years. The biggest trouble of the US group lies in the policy, in fact, including Tencent, Alibaba and other domestic Internet giants are also facing the anti-monopoly pressure of the State Administration of Market Regulation.
Catering takeaway has contributed the largest revenue to Meituan and is the basic plate of Meituan's important business. However, since 2021, regulatory policies on the merchant side and the distribution end have been introduced, and Meituan is facing increasing cost pressure.
On July 26, 2021, the State Administration for Market Regulation and seven other departments jointly issued the Guiding Opinions on Implementing the Responsibilities of Online Catering Platforms to Effectively Safeguard the Rights and Interests of Takeaway Delivery Workers, which put forward all-round requirements for protecting the legitimate rights and interests of takeaway food delivery workers. Meituan has also been tested in issues such as rider welfare protection and distribution safety.
On February 18, 2022, the National Development and Reform Commission and 14 other departments issued relevant policies, mentioned in the "Catering Industry Relief Support Measures", to guide Internet platform enterprises such as takeaway to further reduce the service fee standards of merchants in the catering industry and reduce the operating costs of relevant catering enterprises. On the day of the release of the policy, meituan's stock price fell 14.86% in response. Under this policy, the cost pressure faced by meituan will further expand.
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Shanglin Academy: Yang Fei, Doctor of Economics, University Teacher, In-depth Observation of Industrial Economics and Financial Events.