6 months ago • 2 mins
What’s going on here?
Chinese delivery giant Meituan was raking it in last quarter.
What does this mean?
Meituan runs a kind of web-based shopping platform for consumer products of all stripes – plus a bunch of services like dining, delivery, and entertainment. And while the Chinese economy is looking pretty pale right now, that weakness is actually playing into Meituan’s hands. See, the slump in China’s vast and all-important property sector means that consumers are steering clear of big-ticket purchases, and splurging on experiences instead – from movies and dining to trips. And that shift, tapped into by Meituan’s masterful marketing, gave its meals and travel services a tidy boost last quarter, with transaction numbers jumping across its businesses. All in all, then, sales took their biggest leap in two years – up an impressive 33% from the same time last year.
Why should I care?
Zooming in: Robot wars.
Meituan’s not resting on its laurels. While the firm’s confident its service businesses will remain strong, it’s also dipping its toes into AI – which could help shape its long-term prospects. The firm bought generative AI business Light Year back in June, after all, which it’s hoping can spur growth. But mind you, Meituan has its work cut out for it: in the race for AI dominance, it’s lagging behind plenty of its peers.
The bigger picture: Hoping hesitantly.
Consumer spending is a key driver of China’s economy, and its underperformance is a big reason the country’s in hot water. But there might be some relief soon: two separate surveys showed that consumer sentiment ticked up in August – a welcome turnaround after several months on the slide – spurring hopes that domestic demand could be poised to improve. Still, it’s one thing to feel good and another to actually open your wallet. So it’s probably best to wait for some hard data before you take this news as gospel.
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