Report unveils Meituan’s dilemma in being a leader of the food delivery service
The acquisition of Mobike last year by the food delivery provider Meituan-Dianping is becoming a heavy financial burden. The acquired bike rental platform, which was worth RMB 18.1 billion at the time, will continue to be a loss-maker through to 2021 and continue to act as a drag on Meituan’s profitability. The increasingly fierce competition from its rival, ele.me, which is aiming at market share expansion by instigating a money-bumping war, is also pressuring Meituan to find a way out of the subsidy strategy since the cost overruns will worsen the already tightening margins. A survey conducted by consultancy ZPartners showed that around 85% of food delivery users compare prices on different platforms before placing an order.