Scan the QR code in the image to register This is the interaction between Meituan management and investors at a recent shareholder meeting: Question 1 : I have two business-related questions for the leaders present. First, what is the latest development status of Meituan Select? And what is the future profit model? Answer (Wang Xing) : In the first quarter, Meituan Select further expanded its geographical coverage. Because we want to serve more people, we expanded to over 2,600 counties and cities nationwide in Q1, basically completing the goal of nationwide coverage. Annual transacting users increased to 570 million by the end of Q1. This is not just for Meituan Select but for all of Meituan's services, with Meituan Select accounting for a large portion. Our quarterly growth exceeded 58 million, setting a new company record. In the past two quarters, we achieved a net increase of nearly 100 million annual transacting users, with Meituan Select contributing nearly half of the new user growth and also attracting back some old users. We believe the user quality of Meituan Select is continuously improving, with higher user retention and transaction frequency, reflecting our improvements in supply chain and logistics capabilities over the past few quarters. In Q1, we continued to enhance our long-term core competitiveness by increasing the supply of products, i.e., SKU count. We also increased investment in warehousing and logistics to improve consumer experience and achieve a better unit economic model. Overall, we are full of confidence in the long-term development of community e-commerce, as it has significant market space and is a great opportunity to truly help us enter product e-commerce and the broader consumer retail market. More importantly, I believe community e-commerce creates more value for consumers and suppliers across the entire value chain, and it will also help create more employment opportunities in lower-tier markets. Overall, through this new e-commerce infrastructure of community e-commerce, we can help industrial goods go to the countryside and agricultural products enter cities, creating a lot of value in the entire market, not only consumer value but also employment opportunities. Therefore, we will continue to invest with a long-term mindset, especially in building core capabilities, while striving to continuously improve operational efficiency and unit operational efficiency, aiming to create greater value for our consumers and partners across the entire chain. Question 2 : What is the outlook for per-capita labor costs over a 3-5 year horizon? How do you view this? As the per-capita cost of delivery riders continues to rise, how will the company respond? Answer : Last year, our total delivery commissions were over 50 billion yuan, of which more than 40 billion was rider wages, accounting for about 80% of our commissions. So indeed, rider labor costs are a very important cost for us. Without reducing rider income, we have continuously reduced labor costs through operational efficiency improvements, and we have made significant progress in the past few years. As a result, our delivery business has gone from a large loss in the early days to basically breaking even, or even a slight profit. However, looking at the trend, we believe there will be challenges in labor supply and competition. You may have also noticed that society is paying more attention to social security, and we are actively communicating with various departments to provide better protection for riders. Of course, beyond cost considerations, this is more importantly about helping riders in this industry to pursue this profession more stably and address career development issues. We are also actively researching unmanned delivery and other automated delivery technologies in the long term. Of course, the future is not about fully replacing riders' work, but in specific scenarios suitable for robots, I believe 5-10 years from now, some work will be replaced. So overall, we are cautiously optimistic. Answer : Let me add a supplement. Thank you for the shareholder's question. This is indeed a very important issue for our business, and we take it seriously. In the long run, we believe this is a complex and challenging issue, but we are confident in continuously optimizing and solving it. This confidence comes from three aspects. First, the most important thing we see is the industry development opportunity: merchants and consumers are embracing onlineization, willing to pay for more and better services, and organizing large-scale delivery capacity through brands . This proves that such services truly create value for users and merchants, which is the foundation of our entire issue. We believe the onlineization rate in this industry is still very low. Although we have experienced rapid development over the years, compared to the industry space, we think the onlineization space for food delivery and other local retail services is huge. This is the most important foundation for providing employment and protection for riders. We are confident in the industry's development. Second, we believe in the power of technology . In fact, if you look at our financial reports over the past few years, you can see that although our employment and the number of riders have grown rapidly, our per-order delivery cost has been continuously optimized. This optimization does not come from paying riders less; in fact, riders on our platform have seen their income grow continuously. The most important thing is the continuous improvement in order density and matching efficiency . For each rider, the distance and time per order are now shorter. Although we pay less per order, riders' daily income is higher overall. So the most important thing is to continuously use technology and the advantage of order scale density to ensure riders get good income protection, while consumers and merchants see continuous cost optimization. Third, from a longer-term perspective, we ultimately hope to combine cutting-edge technology, such as unmanned delivery, with our riders . We see many areas for efficiency improvement, such as rider waiting time. Sometimes riders wait a long time for an order. We can use pickup cabinets, designated pickup points in parks, and future unmanned delivery technology to reduce wasted time, improving rider efficiency and ultimately lowering consumer costs. So we highly value and thank technology for making the entire ecosystem more efficient, allowing us to create greater value. In the long run, we are very confident, and we believe this is a problem we must solve to continuously strengthen our core competitiveness. Question 3 : I just heard you talk about the technology field. I'd like to know about our future investment and plans in technology. Also, which areas of technology are we focusing on? Answer (Wang Xing) : I think everything should go back to Meituan's mission: to help people eat better and live better. To achieve this mission, we need to rely on technology. Although our mission of eating better and living better does not directly include the word technology, continuous improvement is the capability of technology. So I believe Meituan has always been a technology company from the beginning, because our mission inherently contains the meaning of technology. On the other hand, no matter how exciting a technology is, technology is always a means, not an end; serving people is the end itself. Our purpose is to achieve our mission, to help people eat better and live better. So how we use and view technology is the most critical thing. Simply put, we can divide information-related technology into software and hardware. Meituan started with an app based on the internet and mobile internet, allowing more users to use it and providing services to merchants. On this basis, we have built what is now possibly the largest order delivery and dispatch system in China and the world, as our business foundation, which is basically achieved through management and software. In this process, we now have one of the largest software engineering teams in China, with over 10,000 R&D engineers . This is the software part, but another very important part is hardware. As a large e-commerce service platform, Meituan's services require strong offline fulfillment support. So we need both software and hardware. This is why we have been investing in automated delivery since 2016. For example, in 2020, to actively respond to the pandemic, we began piloting unmanned delivery services in Shunyi, Beijing, using Meituan's self-developed vehicles. Currently, they cover over 20 residential communities, with cumulative deliveries exceeding 35,000 orders and autonomous driving mileage reaching 300,000 kilometers. During the recent pandemic in Guangdong, we also sent unmanned vehicles to Guangzhou to cooperate with the government in providing services to residents in communities. Recently, in Shenzhen, our drones also conducted support activities, providing contactless delivery services to isolated communities, helping solve the problem of ensuring daily necessities for residents. This is something we are proud of. Although Meituan's self-developed unmanned vehicles and drones have not been widely used on a large scale, they have gradually shown their potential in small-scale pilots and emergency scenarios. Overall, robotics-related technology, which combines software and hardware, has always been a key focus area for us. In frontier fields, whether through self-development or investment cooperation with related companies, it is a very important part. So in 2020, in addition to increasing our internal R&D, we also invested in some robotics-related industry chain investments. We believe robots are a great representative of intelligent hardware and combine well with our business. We believe that with the continuous advancement of autonomous driving and intelligent robot technology, there is huge potential to further improve efficiency, reduce costs, and create better experiences. So Meituan will continue to increase investment in these directions. Question 4 : I'd like to ask about local life services. We see that Kuaishou and Douyin are now vigorously developing local life service content. How do we view this competitive landscape, and how do we build our competitive advantage? Answer : Indeed, we see more traffic participating in the life services industry. First, we view this positively. It shows that the industry's potential and opportunities are large, and more participants may join. We believe the industry is still in its early stages with low onlineization penetration. In fact, the participation of these large traffic platforms is helping educate merchants and users that they can obtain more information and services online. So we think it's very normal, and we are not particularly worried about it. The core is that we are confident in our core advantages and capabilities. We have been cultivating the local life services field for many years. Our financial reports show that Meituan now has over 500 million annual transacting users and over 7 million active merchants. We have formed a positive cycle: many merchants provide quality services to attract new and old customers, and more users continue to attract more merchants. Today, whether in scale or brand, we have an absolute leading position in the market, and we are a comprehensive transaction platform. We believe our core advantage is that we not only simply connect merchants and users online, but through years of construction and accumulation, we provide diverse products and services. For users, there is not only information and content, but also many direct booking, ordering, purchasing discounts, and delivery services—a full suite of services. For merchants, we also provide diverse services, including online marketing, customer acquisition, and value-added services such as helping merchants digitize their content, providing membership services integrated with our platform, digital products for merchant operations, and supply chain services for industries like catering. So I think this one-stop transaction platform is a unique advantage built by Meituan over many years, with strong entry barriers. Many of these traffic platforms are more focused on online traffic generation, which is significantly different from our core positioning. We believe that as the market grows, when more users learn about online information through cloud platforms, they will ultimately choose a one-stop transaction platform like Meituan or Dianping, which they are more familiar with and which offers richer products, when they need to place orders or transact. At the same time, more importantly, we are not stopping here. We believe this industry has huge development space. We are persisting in continuous investment in the areas we just mentioned, constantly improving user experience, increasing product and service categories, and increasing investment on the merchant side, providing richer products for merchant digitalization and informatization, and further enhancing merchant stickiness on our platform. We are also continuously exploring quality content to meet the younger generation's demand for richer online content presentation, and continuously consolidating our core advantages in the in-store scenario. So overall, we are very confident in our business. We also look forward to seeing more participants join to make the ecosystem more prosperous. Thank you. Question 5 : I'd like to ask about the delivery business. We saw that per-order delivery costs have been declining and efficiency improving in previous years. But there is a concern: is there a bottleneck to efficiency improvement? Because in recent quarters, per-order delivery costs have not declined as fast as before. In the future, as density increases, will there be limited room for efficiency improvement? Answer : First, your observation is accurate. In recent quarters, our overall per-order delivery cost is still optimizing, but the room for optimization is definitely less than in previous years. It's easy to understand: the initial optimization is easier and faster, but as we go deeper, it becomes more difficult. At the same time, our optimization is not a single-point optimization; it's not simply about minimizing costs at a single point. We need to balance experience and cost, and consider all parties in the industry chain: consumers, merchants, riders, and our platform itself. So it's more complex. To answer your question, we are confident about long-term cost optimization, but we should have reasonable expectations that the marginal efficiency of further optimization will gradually diminish. Overall, we hope to continue optimization through several actions. First, we recently made a fee breakdown. I don't know if you noticed, but for merchants, we split our original platform service fee into two parts: a technology service fee and a fulfillment service fee. The main purpose of the split is to make the charging logic more transparent for merchants, as the nature of the two services is quite different, and a large part of the original fulfillment service fee was not refined enough. Through the split, we also refined the fulfillment service fee based on factors such as distance, time period, and busyness, allowing merchants to more proactively understand the cost differences and adjust their business decisions, giving them better motivation to optimize operational efficiency and costs. So we see the fee split as a way to further optimize costs. At the same time, we hope to keep overall fees relatively stable, but through the split, the composition of revenue will change. For example, we expect that the proportion of marketing and advertising fees that merchants invest autonomously will increase. On one hand, this gives merchants more freedom—those who actively promote can get more business and invest more. On the other hand, merchants with limited service capacity may invest less. For our platform, this will increase our gross margin without raising overall fee levels, thereby improving our per-order profit level. Because advertising profits are higher, even though the improvement in per-order cost is slowing, through optimizing the revenue structure, we are confident that our per-order efficiency and ultimately per-order profit level still have room for continuous optimization. Question 6 : Regarding the fee issue, I'd like to discuss with management. I noticed that Ele.me has imitated us in fee transparency, but after a while, they seemed to think that low fees are more important than transparent fees. How do you view this? They have increased subsidies by about 1 billion yuan in fees. I'd like to know if we will also increase subsidies in this area, and what are your views on low fees and fee transparency? Answer : First, our ultimate goal with merchants, consumers, and the entire ecosystem is the same: we hope for higher efficiency and ultimately gradually optimize fee levels. We have no incentive to continuously raise fees. In fact, from our numbers over the past few years, our overall fee rate has been relatively stable, with some seasonal fluctuations, but overall relatively flat. Our profit improvement comes more from efficiency optimization than from fee increases. Regarding what other competitors say, the most important thing is how we achieve continuous fee optimization, not simply subsidizing or shouting slogans. Because we know the biggest cost is labor, simply pursuing lower numbers is not sustainable. The most important thing is to continuously integrate our order scale advantage with our technology advantages to improve. In formulating the fee transparency process, we are more driven by a responsible attitude toward merchants and consumers. We don't pay much attention to what competitors think, which is always our company's core operating principle. We can continue to optimize the fee structure and ultimately achieve the goal of continuously reducing costs, but this requires continuous technology investment and scale growth. So we have long-term patience to achieve this goal. In this process, we will respect merchants' autonomous operating rights, fulfill our platform responsibilities based on voluntary and fair principles, and ultimately hope that consumers, merchants, riders, and the entire ecosystem benefit, promoting healthy development. Thank you. Answer (Wang Wenhui) : Let me add to this. Looking at global delivery platforms, we are actually implementing low fees. China's delivery platform fees are much lower than those in other countries, which is why China's delivery business has developed well. But under a low-fee strategy, what is an appropriate low level? Everyone has their own views, but everyone hopes to make the ecosystem more reasonable. For merchants, the overall benefit is greater; fees are only part of it. If we can increase their revenue and income, it will have a good effect. So what is a reasonable low level? Each platform may have its own view. Question 7 : I'd like to know about the current trend in personnel recruitment. From the news, we see that this year we plan to hire about 60,000 new employees. Against the current macroeconomic backdrop, what is the reason behind such large-scale recruitment? And what is the latest progress? Answer : In this regard, we are actually followers of Professor Yang Guoan's Yang Triangle. I believe ultimately, success equals strategy times capability, but internally, organization, talent, and culture are very important parts of daily management. Indeed, we plan to hire 60,000 employees this year, partly due to business development and partly due to our long-term planning for building our talent pipeline and continuous self-renewal. This recruitment has several characteristics. First, this may be the first time we require all departments and positions to recruit graduates. In the past, we recruited more graduates for headquarters product R&D and back-office work, but now we require all departments to recruit. So the coverage of cities and schools is unprecedented. Not only first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen, but also provincial capitals like Wuhan, Chengdu, and Shijiazhuang, and third-tier cities like Huanggang and Huludao. So our coverage is very broad. The positions are, as mentioned, across all departments. Specifically for graduates, we have already recruited 3,000-4,000 this year and last year. This year, we plan to increase by 100%, possibly close to 10,000. So to some extent, we are contributing to student employment. Finally, we place great emphasis on recruiting scientific research talent. In addition to outstanding domestic graduates, we will continue to increase our attraction of overseas talent. Many outstanding Chinese students and scholars, we hope to attract them back to China to use their talents. Source: Ability Circle (ID: AbilityCircle) -END-