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Meituan, China’s eighth largest company by market value, has faced regulatory heat as authorities crack down on the country’s sprawling platform economy.
China’s State Administration of Market Regulation (SAMR) launched an antitrust probe into the company in April for forcing restaurants and other merchants to use its platform exclusively.
Meituan said in its earnings report that it was actively cooperating with SAMR on the ongoing investigation and that it could be required to “make changes to its business practices and/or be subject to a significant amount of fines”.
The Tencent-backed company reported a 2.21 billion yuan ($341.8 million) loss in the April-June period versus a profit of 2.72 billion yuan a year earlier.
It has been expanding aggressively into hotel booking and community group-buying, taking on such rivals as Alibaba (NYSE:BABA) and Pinduoduo (NASDAQ:PDD).
Meituan, whose services also include hotel booking and bike sharing, said total revenue rose 77% in the period from a year earlier to 43.76 billion yuan.
That compared with a 42.32 billion yuan average of 15 analyst estimates compiled by Refinitiv.
Revenue in Meituan’s core food delivery business rose 59% year-over-year to 23.13 billion yuan.
The new initiatives, including its community group-buying service Meituan Select, saw revenue growth of 113.6% to 12.03 billion yuan.
In July, a set of reforms announced by SAMR required food delivery platforms to guarantee their workers with insurance, causing investor concerns about the rising cost of employing riders.
Meituan will follow the government’s pilot programme for occupational injury insurance coverage for flexible workers as early as this third quarter, according to a recent report by China Merchants Securities.
($1 = 6.4656 Chinese yuan renminbi)
