$Alibaba(BABA)$ $MEITUAN(MPNGY)$ $MEITUAN-W(03690)$ $BABA-W(09988)$
I went back to review respective earnings release. Both platforms were focused on same metrics, "order mix"/High value orders & platform scale because these are the two main thing that allows for economic scale & margins.
its now clear that Baba has back off its offences on Meituan allowing for China to preserve another tech platform existence & its jobs in an already poor domestic business environment.
The only problem is, latest earnings release, management has reported improving unit economics on Quick Commerce segment while reported a net -7% in CMR revenues due to business development cost for quick commerce. Meaning even after increasing MAU due to quick commerce, CMR rev. still contracted yoy. In addition, although quick commerce drew higher MAU (higher engagement), CMR rev. only managed to grow by 1% yoy if business development cost was omitted.
Quote, "due to weaker transactions activities" were the managements comments. Meaning, those investments into quick commerce wasn't enough to build sustained consumer habit to order via Taobao Instant commerce after pulling back subsidies. Users simply went back to Meituan.
Having said that, there're some positive development as well. Management reported a 64M 88VIP members # representing an increased by (+24%) roughly a quarter yoy which is of course a positive development for the business.
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