China’s ‘everything app’ aims to raise $4bn

in #china2 years ago

  • This profile of Meituan Dianping, China’s “everything app”, makes for an interesting read.

  • Meituan describes its offering as those of Yelp, Booking.com, Airbnb and several other consumer services companies combined on a single platform, and is seeking a valuation of USD45–55bn through an IPO in Hong Kong.

  • The company’s business model follows a classic tech strategy, namely that of building up big data and selling an ever increasing range goods to a wider range of customers.

  • Yet with the funds raised through its planned IPO, Meituan is also aiming to strengthen its business services activities by developing a system through which it can sell its software services to suppliers. Further to this, the company hopes to expand its mobile payments system.

  • However, the stiff competition that Meituan faces (namely, from Alibaba) raises major concerns about its future profitability. Meituan’s revenues rose by 161% to RMB33.9bn (cUSD5bn) in 2017 – but its costs rose even faster over the same period.

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