ChinaTravelNews, Ritesh Gupta – Meituan’s in-store, hotel and travel business has benefited from the expansion of the company’s Shen Hui Yuan membership program.
In its third quarter (Q3) earnings call, the tech-driven retail company shared that its in-store, hotel and travel division posted a strong growth, with order volume rising by over 50% year over year. Both annual transacting users and annual active merchants reached “new highs”, according to the company.
By partnering with numerous merchants, Meituan Shen Hui Yuan initiative provides members with exclusive discounts, promotions, and other services. Plans to leverage the Shen Hui Yuan initiative for its travel business began in Q2 of this year. The membership program started to include more categories in the in-store, hotel, and travel sectors, initially launching in pilot cities before being rolled out nationwide in July. This strategy allowed Meituan to reach consumers in lower-tier cities as part of its effort to stimulate local consumption, capitalising on its offerings in the local commerce segment.
Over the past few months, the validation for this expansion has been supported by Meituan’s initial evaluations of new categories in pilot cities, which indicated that Shen Hui Yuan enhanced consumer awareness of its value-for-money offerings. The inaugural monthly scheme around Shen Hui Yuan for integrating Meituan’s marketing efforts in core local commerce demonstrated initial success, driving frequency increase of its core users for in-store, hotel and travel services. In terms of impact on business, the company shared that for low-star hotels, the team has leveraged Shen Hui Yuan to cross-sell hotel room nights and expanded its user base for its hotel business.
By implementing this initiative, Meituan strengthened its partnerships with a larger network of merchants through the expanded Shen Hui Yuan program, enabling members to enjoy a wider array of value-for-money products and services. Additionally, the “Hotel + X” packaged deals not only provided consumers with value-for-money options but also assisted merchants in cross-selling other services.
Meituan’s CFO, Shaohui Chen, said, “In July, we expanded the Shen Hui Yuan program to our core performance categories, rolling it out nationwide.” Chen added that since then the company has achieved significant progress in product development, merchant partnerships, and consumer engagement. “For hotels and travel, over 50% of merchants are now participating, and an increasing number of orders are being placed through Shen Hui Yuan. Our integrated marketing team has effectively raised consumer awareness of the program's value and benefits. We aim to transition over 100 million Shen Hui Yuan delivery users to hotel and travel services. By continuously improving the user experience, Shen Hui Yuan is driving increased traffic and acquiring new users for our hotel and travel business,” explained Shaohui.
Chen further added, “Looking ahead, we will continue to expand our category offerings and geographic reach.” The goal is to accelerate product development, focus on customisation. “This will help merchants efficiently acquire traffic, increase transactions, and improve user engagement with the platform,” said Chen. “We are confident in our long-term competitive advantage in the hotel and travel sector.”
Hotels
The company shared that domestic hotel room nights “continued to grow steadily” in Q3. As consumer preferences evolve towards diverse experiences and cultural immersion, Meituan collaborated with suppliers to offer a range of options catering to various needs.
For high-star hotels, the company incentivized consumer demand through new marketing initiatives and strengthened partnerships with hotel chains through membership initiative, marketing campaigns, and the "Hotel+X" offerings. For low-star hotels, Meituan capitalised on the rising demand for local accommodations and short-distance trips, leveraging its position in lower-tier markets and also among younger demographics. Overall, merchants enhanced their operational capabilities in areas like traffic acquisition, business growth, and room renovations.
“Our upgraded Shen Hui Yuan program emerged as a significant growth driver. In the high-star segment, partnerships with global brands enabled us to offer diverse "Hotel+X" packages. For low-star hotels, Shen Hui Yuan facilitated cross-selling of room nights to our high-quality user base, expanding our customer reach,” stated the company.
Financial highlights
During Q3, Meituan’s revenues increased by 22.4% to RMB93.6 billion from RMB76.5 billion for the same period of 2023.
Its core local commerce segment achieved an operating profit of RMB14.6 billion for Q3 of 2024, up by 44.4% from for the same period last year. Meanwhile, the operating loss for its new initiatives segment narrowed to RMB1.0 billion from RMB5.1 billion for the same period of 2023.
