China’s food delivery giant Meituan hits $100B valuation amid pandemic

While nationwide lockdowns might have increased the need for food delivery, Chinese consumers have been tightening their belt amid a worsening economy triggered by COVID-19. Overall food delivery transactions slid as a result. Meituan also had to pay incentives to delivery riders who work during the pandemic and subsidies to merchants to keep their heads above the water.

There’s one silver lining: While Meituan’s daily average number of transactions dropped by 18.2% to 15.1 million, the average value per order jumped by 14.4% as delivered meals, which were conventionally seen as a habit for office workers, became normalized among families that stayed at home. In the first quarter, a large number of premium restaurants joined Meituan’s food delivery services, and they could continue to attract bigger ticket purchases in the post-pandemic era.

All in all, though, Meituan executives warned of the uncertainties brought by COVID-19. “Moving on to the remaining of 2020, we expect that factors including the ongoing pandemic precautions, consumers’ insufficient confidence in offline consumption activities and the risk of merchants’ closure would continue to have a potential impact on our business performance.”