Meituan files for IPO in HK
ONLINE lifestyle services website Meituan Dianping filed for a Hong Kong IPO yesterday as competition intensifies between the Tencent-backed platform and other online-to-offline service providers such as Didi Chuxing and Ele.me.
Meituan began as a groupbuying site and, after its merger with smaller rival Dianping in a US$15 billion deal in 2015, it has grown into a platform which connects consumers and various kinds of offline merchants such as food and beverage providers, movie theaters, hotels and entertainment venues.
The filing did not disclose which day it will list or the amount of cash it aims to raise, but Reuters reported the firm is targeting over US$4 billion fundraising and will list in October this year, citing anonymous sources.
The market size of on-demand food delivery from restaurants is set to grow at an average annual pace of 31 percent in the next five years, according to a recent report by domestic Internet consultancy iResearch.
Meituan Dianping’s total transaction volumes jumped 51 percent to 357 billion yuan (US$54.9 billion) last year, and it boasts 310 million consumers as well as connections with 4.4 million merchants in over 2,800 domestic cities, according to its prospectus.
The booming e-commerce sector has been boosted by the prevalence of smartphones and the popularity of online payment infrastructure. Meituan Dianping is also helping merchants with its technological capabilities such as online marketing tools, an on-demand delivery network, plus supply chain and financial solutions to lure and keep consumers.
Its revenue rose from 12.99 billion yuan in 2016 to 33.9 billion yuan last year.
Meituan Dianping remains loss-making, with pre-tax net losses more than tripling from 5.8 billion yuan in 2016 to 19 billion yuan last year, as it subsidizes its operations in the online ticketing, hotel booking and car hailing sectors to compete with Alibaba-backed food delivery platform Ele.me.
Its latest foray into online and offline service includes its newly launched car-hailing service in Shanghai in March this year which aims to take on leader Didi Chuxing. It has also bought public rental bike operator Mobike for US$2.7 billion and seeks to offer a one-stop online-to-offline service on one integrated platform.