The sluggish Chinese consumer market under the influence of the epidemic has also put domestic platform network service giants in trouble. On March 25, Meituan released its fourth quarter and full-year financial reports for 2021. In the fourth quarter of 2021, Meituan's revenue was 49.52 billion yuan, an increase of 30.6% year-on-year. The loss in the fourth quarter reached 5.01 billion yuan, and the loss widened by 75.5% year-on-year. From the perspective of the whole year, Meituan's revenue in 2021 reached 179.1 billion yuan, an increase of 56% year-on-year. The net loss for the full year reached 23.1 billion yuan, and the adjusted net loss was 15.57 billion yuan. Compared with the net profit of 4.71 billion yuan in 2020, Meituan turned profit into loss.
Meituan currently has three major types of business: food and beverage takeaway, arrival, hotel and tourism, new business and other three major categories. (1) Catering takeaway achieved a net profit of 6.2 billion yuan in 2021, an increase of 117.9% year-on-year. (2) Net profit of the arrivals, hotels and tourism segment was RMB14.1 billion, an increase of 72.3% year-on-year. Among the three major businesses of Meituan, the most profitable contribution is still the hotel-based wine and tourism business. For the whole of 2021, the number of domestic hotel room nights in the hotel-based hotel business increased by 34.5%. (3) Losses from new businesses and other segments widened from $10.9 billion in 2020 to $38.4 billion in 2021, an increase of 253.7% year-on-year.
Users, merchants and riders are the core assets of Meituan's catering takeaway business. It is worth noting that Meituan's delivery service revenue cannot currently cover the cost of riders. Meituan's 2021 takeaway catering delivery service revenue was 54.2 billion yuan, while the delivery cost of takeaway riders reached about 68.2 billion yuan, an increase of 38.3% over the previous year, accounting for 71% of the takeaway revenue. In 2021, more than 5.27 million riders earned revenue through the Meituan platform. According to the financial report, the number of annual transaction users and per capita transaction frequency of Meituan catering takeaway in 2021 hit a record high. Among them, the number of annual transaction users of catering takeaway increased by 13% year-on-year, and the average transaction frequency of annual trading users increased by 25% year-on-year; the peak of single-day orders exceeded 50 million in August 2021, and reached a new high in December. However, as one of the core assets of Meituan's instant retail, the size of riders is shrinking. By the end of 2021, meituan's takeaway riders reached 5.27 million, a year-on-year decrease of 44.53%.
Meituan's 2021 annual performance shows the operating conditions of the leading domestic network platform life service enterprises. It can be seen that as a top enterprise in the domestic similar platform, the development of Meituan seems to have encountered a limit, not only making it difficult to break through the profit mark, but also difficult to maintain high growth in future traffic growth. In Q1-Q4 2019 before the new crown epidemic, Meituan's trading users were 410 million, 420 million, 430 million and 450 million, respectively, with a year-on-year increase from 26.4% to 12.5%, while the month-on-month increase was 0, 1.72%, 0 and 5.08%, which was basically stagnant. The epidemic has increased consumers' dependence on online shopping, and by the end of 2021, Meituan's annual trading users reached 690 million, an increase of 35.2% year-on-year; the number of annual active merchants reached 8.8 million, an increase of 29.2% year-on-year. However, will the number of transaction users continue to grow after the outbreak? There is a lot of uncertainty.
In the development of China's Internet industry, the traffic economy is a popular "paradigm". As long as it can attract enough traffic, capital will race to chase the traffic platform. As long as the traffic can maintain growth, the network platform can still get the capital chase without making money, and the myth of "wool out of the pig" can be realized in business operations. However, the traffic economic model of the domestic Internet industry is facing many unfavorable factors.
First, the development of the domestic Internet industry is slowing down from the stage of high-speed growth. In the past ten years, relying on the huge domestic market scale, the Internet industry has completed rapid expansion in various fields, from e-commerce, social software, game entertainment, browsers, online education, eating, drinking and having fun life services, online car-hailing, etc., the Chinese market has rapidly grown a number of Internet giants that can stably occupy traffic. At present, the market pattern is basically demarcated, the heat of capital has begun to cool down, and the rapid growth has begun to slow down. This change of large stage means that the flow economy has reached a stage of transformation.
The second is the change in the policy environment. In the past, the Internet field was a new thing, there were no restrictions, there was no norm, and in fact, I didn't know how to regulate. Therefore, the pursuit of various innovations, the pursuit of various innovations, the capture of the land, and the seizure of the market under the impetus of capital are the common paradigms of the development of the industry. At this stage, national laws and regulations did not take shape, and there were not many policy constraints, which achieved the barbaric growth of the network industry. Now it is different, the domestic laws, regulations and policy supervision for the development of the network industry have begun to increase, and the network industry has begun to change from a "kingless" field to a "king-managed" market. In particular, various policy supervision systems in the name of anti-monopoly have laid down many rules for the Internet industry that is far-reaching. In the past two years, both Ant Group and Meituan have been regulated by regulatory authorities and imposed huge fines. The regulatory environment of the future will be more inclined to "managed competition".
The third is the change in the consumption environment and consumer mentality under the macroeconomic slowdown. No matter how different the traffic economy model is in form, it must ultimately be reflected in the consumer's consumption activities, whether it is physical consumption or service consumption, the story of the traffic economy ultimately needs to be pulled by consumption. In the domestic market, the COVID-19 pandemic has exacerbated the slowdown in China's economy, and while the impact of the pandemic has stimulated the development of online consumption, it has also reduced the resilience of future economic recovery. It is very important that the growth of domestic consumption in the past two years has been sluggish, which is related to the slowdown in overall economic growth, the weakening of residents' income expectations, and the poor operation of micro-market entities.
For the above trends and changes, capital will look at it and remember it. In the future, although the situation of excess capital still exists, whether it is venture capital (VC), equity investment capital (PE) or industrial capital, they will look at the flow economy model in a different way and will not chase this field as crazy as in the past.
The final analysis concludes that the future development environment of domestic platform network giants will be different from the past. The internet platform is highly dependent on the model of traffic development, and may come to an end - the network platform will still exist, there will still be a large market, but its growth will not be as high as in the past. Their valuations in the eyes of capital will also change in the future. The venture capital trend of Internet giants will become a thing of the past, relying on financial advantages to invest in expansion, and this trend has begun to end.