(Adds CEO comment, photo)
BEIJING, May 28 (Reuters) - Chinese food delivery giant Meituan reported a second consecutive quarterly loss on Friday, weighed down by its expansion into the community group-buying business that relies heavily on subsidies.
It reported a 4.85 billion yuan ($762.4 million) loss in the January-March period versus a loss of 1.58 billion yuan a year earlier, and a 2.24 billion yuan loss in the October-December quarter.
Tencent-backed Meituan, whose services also include restaurant reviews and bike sharing, said total revenue rose 120.9% in the period from a year earlier to 37.02 billion yuan.
That compared with a 35.16 billion yuan average of 13 analyst estimates polled by Refinitiv.
The 11-year-old Meituan has run into regulatory hurdles, as China’s market regulator launched an antitrust probe into the company in April, focussing on a practice whereby a company forces vendors to use its platform exclusively.
The company has set up a dedicated team to cooperate with the regulator’s investigation and the company has stopped use of exclusive partnerships, Meituan Chief Executive and Chairman Wang Xing said in a conference call on Friday.
“We believe that it [the probe] will not jeopardise our competitive advantage of the food delivery business,” Wang added.
Food delivery, the company’s core business, posted quarterly revenue growth of 116.8% to 20.58 billion yuan.
New initiatives, including its community group-buying service, Meituan Select, grew by 136.5% year-on-year to 9.86 billion yuan in revenue.
The operating loss from new initiatives, however, ballooned to 8.04 billion yuan over the quarter from 1.36 billion yuan a year earlier.
The company has in total posted five profitable quarters since it made its stock market debut in 2018.
Meituan also faces social media criticism for its treatment of delivery riders, most of whom are not covered for basic social and medical insurance.
The company is currently working with the government to purchase employment injury insurance for its delivery drivers, Wang said in the call.
$1 = 6.3612 Chinese yuan renminbi Reporting by Yingzhi Yang and Tony Munroe in Beijing; Editing by Jan Harvey and Steve Orlofsky