Wang Xing Meituan Struggles: Wealth Declines

Wang Xing Meituan Struggles: Wealth Declines

Founder of the famous Chinese food delivery service Meituan, Wang Xing, who is 44 years old, has seen his wealth drop by an amazing $6.6 billion this year. Even with this loss, his net worth of $9.3 billion is still very high. But it’s hard to get investors who aren’t sure about the company’s future to change their minds.

Wang Xing Meituan Struggles: Poor Growth in Meituan

Wang Xing Meituan Struggles: Wealth Declines

At the moment, Meituan, which is based in Beijing, is dealing with slower growth, more intense competition, and changing customer habits. Shares of the Hong Kong-listed company have dropped about 50% since January, with a big drop of 12% after the third-quarter numbers were released. Some of the problems are that supply might go down and costs have to go up to stay competitive.

Wang Xing Meituan Struggles: Thoughts and Concerns

Investors are worried about the company’s growth prospects because of the state of the economy, more competition, and the end of the Covid shutdown benefits. Some analysts, like Tommy Wang from China Merchants Securities, compare this year to the fourth quarter of 2022, when China’s quarantine rules caused a big rise in food service orders.

Wang Xing Meituan Struggles: Things that affect Meituan’s performance

Meituan is having a hard time for a number of reasons. People are eating out more because it’s warmer, so they don’t need food service as much. Meituan also has to spend more on subsidies because of competition from platforms like Douyin, which is like TikTok in China. This cuts into their profit margins.

Wang Xing Meituan Struggles: A Look at the Money

The overall income for Meituan went up by 22.1% to 76.5 billion yuan ($10.8 billion), but the operating margin for its local commerce business went down from 20.1% to 17.5%. Meituan Select, the neighborhood group-buying unit, is losing a lot of money, which makes it less likely that it will soon be profitable.

Looking for New Ideas

Meituan is looking into new ways to deal with these problems, such as using AI, live streaming, and other niche goods to increase demand. Analysts are still not sure how well these steps will work in the short term, though.

Problems with International Growth

Wang Xing wants to lead Meituan’s growth outside of mainland China by launching Keeta, a new food service brand in Hong Kong. However, analysts don’t think the company will be able to repeat its success in China. Meituan may face problems in other areas where labor costs are higher and digital payments are used less often.

Talks about acquisitions and the future

Meituan is reportedly in talks to buy Delivery Hero’s business in Southeast Asia in order to expand its reach worldwide. On the other hand, experts warn that it might be hard to find good targets at a fair price.

To sum up, Wang Xing and Meituan are going through a tough time with a big drop in wealth and doubts about their future growth. Getting past these problems will take smart choices, new ideas, and maybe even buying other companies in other countries to grow internationally.