To The Moon

Looking at Meituan's$MEITUAN-W(03690)$  financial report, “new business” growth in the third quarter was not as high as last year's growth rate (over 20% last year and 15% this year), and the new business was the most expensive in recent years. It also lost more than 5 billion dollars this quarter, and growth expectations outside of core business were hit.

In fact, whether it was $TENCENT(00700)$ Tencent or Meituan, the great period of 15 to 18 was either too comfortable, or busy with other domestic manufacturers. Looking back (soon afterward), expanding overseas during this period was the right choice. Byte has fully opened up space overseas, and other domestic manufacturers don't know how it feels.$Alibaba(BABA)$ 

Tencent's overseas games were gaining momentum for the first two years, but I don't think they are strong enough. In addition, other businesses can also consider getting involved overseas, such as cloud and some ToB businesses. If they have to travel overseas, they will not have market share forever.

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Over the past few years, Meituan has wasted time on developing new domestic businesses. Even the Hong Kong takeaway market only tested the waters this year, and the pace of overseas expansion is too slow.

The advantage of Meituan is that the takeout business provides stable traffic (takeout has low gross profit, but this kind of traffic is stable), and then it can lead the traffic to monetization of high-margin businesses, such as the current hotel business. Takeout traffic is second only to social software stickiness as stable traffic. Meituan has been relentless about getting involved in new businesses over the past few years, but these new businesses have a low threshold, high competition, and big companies are watching. Low gross profit and high costs have led to losses, but even under this kind of investment, the growth rate is still not very pleasing.

Personally, I think Meituan can change its thinking, change its focus, consider expanding overseas markets, obtain more stable traffic (through takeout), and then use some of that traffic to monetize high-margin businesses rather than struggling to roll in new domestic low-margin businesses.

@TigerStars @Daily_Discussion