Meituan Dianping closes offline supermarkets as it continues to scale back its business

Meituan Dianping will close five offline supermarket stores as the company continues to scale back its business.

The Tencent-backed company, best known for its Chinese food delivery business, will shutter its Ella Supermarket stores, just one year after launching them.

The brand announced it will close five stores in Wuxi and Changzhou citing mismanagement, however, its two Beijing stores will continue to operate.

The stores, which are similar to Alibaba’s Hema supermarkets, focus on fresh produce and feature online ordering and 30-minute delivery service for local customers.

It is the latest in a widespread scaling back of businesses by Meituan, which recently shuttered the Asia Pacific operations of its bike-sharing business Mobike.

The company laid off staff across its offices in Singapore, Malaysia, Thailand, India and Australia. The move came less than one year after Meituan acquired the global Mobike business in 2018 for $2.7bn, with the cutbacks first announced in November last year.

The move followed a plunge in shares after announcing operating losses of RMB 3.45bn ($497m) for the June to September quarter in 2018.

Meituan also backtracked on growth plans for its car-hailing service announcing it would not attempt to expand beyond Shanghai and Nanjing as previously planned.

It is the lastest company to pull out of offline fresh produce category, SF Express, China’s courier and delivery service, also closed its SF Best high-end grocery stores this year.