Meituan Dianping, the Tencent-backed Chinese food delivery giant, is scaling back its bike-sharing and ride-hailing services after announcing operating losses of RMB 3.45bn ($497m) for the June to September quarter.
Meituan entered the bike-sharing business this year when it acquired Mobike for $2.7bn. However, the bike-sharing market has faltered in China and the company is now downsizing to avoid oversupply, according to TechCrunch.
Meituan has also said it does not plan to expand its car-hailing service beyond Shanghai and Nanjing. The company had planned to take on dominant market leader Didi Chuxing. However, this market has also changed with stricter regulations introduced following a spate of passenger attacks.
Meituan posted revenues of RMB 19.1 billion ($2.75bn) which was driven by strong growth in its core food delivery business. It boasts a 59% share of the food delivery market, according to iResearch data, and competes with Alibaba’s Ele.me in this category.
The results are the first since the company’s $4.2bn IPO in September. Following the announcement, Meituan shares plunged nearly 12%, with shares of its main backer Tencent also dropping.
Meituan Dianping claims to be the world’s largest e-commerce platform for local services and is often described as a combination of Deliveroo, Yelp, and Groupon.