Competition from Douyin is limited 

We previously pointed out that Douyin was actively promoting in-store dining/entertainment videos and achieve substantial GTV starting 4Q21. Recent channel check shows that the growth momentum may slow this year: 1) Higher requirements for merchants. Merchants either have to continuously upload videos onto Douyin, or hire third-party service providers to create such content. 2) Higher marketing cost. If hiring third-party service providers, merchants could pay up to 15% of revenue as advertising budget, which is relatively high compared to Dianping’s 5-8%. 3) Douyin may start to charge 2-8% commission fee starting 2Q22, which further increases merchants’ spending. We estimate that Douyin’s GMV of in-store dining/entertainment will reach RMB 15bn/20bn in 2022, vs. Meitaun’s 130bn /140bn.

 

Lockdowns lead to flattish local service growth

Our house view believes is that the lockdowns will continue to prevent most Shanghai citizens to access Meituan’s service until May. Other major cities, like Beijing, are also impacted. Channel check data also shows that two weeks lockdown in March dragged FD order growth from 19% YoY to 10% YoY. Since Shanghai/Beijing each contributes about 15%/10% of Meituan’s orders, we cut 2Q22 revenue growth estimate of FD/in-store from 20%/20% YoY to 5%/3% YoY. On the other hand, we see that Meituan Maicai (美团买菜) has (TBC)