In a recent announcement, Meituan's CEO Wang Xing revealed that the company's delivery workers earned approximately 80 billion yuan (around US$11.3 billion) in 2023. This figure highlights the significant role that gig workers play in China's economy, where around 200 million individuals are part of the gig workforce, accounting for 23% of the total labor force in the country. Meituan, alongside its competitor Ele.me, employs around 11 million delivery riders, reflecting the scale of the demand for delivery services in China. [2ebe3624]
The earnings of Meituan's delivery workers come at a time when competition in the delivery sector has intensified, leading to reduced per-delivery commissions. Despite this, Meituan has managed to report a 21.2% revenue increase, reaching 82.3 billion yuan in Q2 2023. The company has also taken steps to enhance worker welfare, with 4.5 million delivery workers now covered by occupational injury insurance, a program that was initiated in a pilot phase in 2022. [2ebe3624]
Looking ahead, Meituan plans to hire 6,000 graduates from the class of 2025, indicating a commitment to integrating fresh talent into its workforce. Additionally, the company has expanded its international services, launching operations in Saudi Arabia in 2023, which marks a significant step in its global outreach strategy. [2ebe3624]
Meanwhile, UBS has raised the target price for MEITUAN-W to $146, maintaining a bullish outlook on the stock due to its high earnings visibility and growth potential. The rebound of China's internet sector has been attributed to improved market sentiment and the anticipation of strong 1Q24 results. UBS believes that much of the management guidance should already be reflected in the forecasts, and they highlight the importance of quality stocks with lagging valuations. [716a5036]
In addition to this, MEITUAN-W reported better-than-expected 1Q24 results, with revenues exceeding estimates by 6.8% and net profits surpassing expectations by 18.6%. The company has adapted quickly to changing consumer behaviors and market dynamics, which has contributed to its solid financial performance despite macroeconomic challenges. [2b875988]