Meituan serves cold warning on Chinese consumers

2 minute read

A Meituan delivery worker wearing a face mask is seen on a street following an outbreak of the coronavirus disease (COVID-19) in Shanghai, China January 13, 2021. REUTERS/Aly Song

Register now for FREE unlimited access to Reuters.com

HONG KONG, Nov 29 (Reuters Breakingviews) - Investors searching for clues about Chinese consumers should track their snack habits. Food-delivery company Meituan (3690.HK)reported a solid 38% year-on-year jump in revenue for the three months to September, and even nodded to the popularity of spicy crayfish as late-night fare on its app over the summer. Even more impressive was the 12 million orders of milk tea received in a single day - a new record for the $200 billion outfit.

Those afternoon teas and midnight snack parties may be coming to an end. Boss Wang Xing flagged that strict Covid-19 lockdowns and slowing consumer demand will have a "meaningful negative impact" on delivery volumes over the next few quarters. Jittery shareholders promptly wiped out over $14 billion in market value on Monday morning.

Meituan's gloomy outlook on China's economy follows similar warnings read more from e-commerce giants Alibaba (9988.HK) and Pinduoduo (PDD.O). The latter's third-quarter revenue missed read more analysts' expectations by nearly a fifth, per Refinitiv. Meituan’s insights into Chinese eating habits may be the most unsavory so far. (By Robyn Mak)

Register now for FREE unlimited access to Reuters.com

Follow @Breakingviews on Twitter

Capital Calls - More concise insights on global finance:

Software AG can log onto buyout boom read more

India’s cryptocurrency reckoning is overdue read more

Battery maker tests SPAC-like hype on wrong grid read more

Vitol makes cheeky move on London fuel laggard read more

Remy Cointreau will see M&A pressure building read more

Register now for FREE unlimited access to Reuters.com
Editing by Antony Currie and Katrina Hamlin

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.