Meituan operates at great losses while the bike sharing business gets the blame
“Active users” was once a key point being emphasized over and over again when it comes to mobile application development and maintenance, which always related to a high-cost of user acquisition and a decrease in profit. Facing the heavy financial burden combined with broader macroeconomic pressure, the over-pursuit of which can easily become a disaster. This is exactly what happened to Meituan. After redesigning the business blueprint by adding a transportation section, namely a ride-hailing service Meituan Dache and bike-sharing Mobike, Meituan’s in-app annual active users reached more than 400 million in 2018, 29.3% up from the previous year, unfortunately, combined with an RMB 4.6 billion loss solely attributed to the purchasing and subsidizing of Mobike. Some researcher is doubtful about the prospects for the company’s continuous expansion, saying “someone at Meituan will have to make the call as to whether or not the company should persist with its transportation play”.