Meituan.com (美團網), a Chinese group-discount Web site backed by Alibaba Group Holding Ltd (阿里巴巴), raised US$700 million from unidentified investors, with chief executive Wang Xing (王興) saying the firm is now worth US$7 billion.
Transaction volumes are expected to increase to 100 billion yuan (US$16.1 billion) this year, and rise to 1 trillion yuan in 2020, Wang said on Sunday at a news conference in Beijing. At the end of last year, the figure was 46 billion yuan, he said.
“We will focus on developing business areas that many people use frequently,” Wang said, listing hotels, food delivery and movie tickets.
While Wang reaffirmed Meituan’s plan to undertake an initial public offering some day, he said the company was not focused on one in the next two years.
Meituan, which has about 20 million active daily mobile users and is part-owned by Alibaba, is tapping China’s surging middle class consumers, who are seeking deals for entertainment and restaurants.
About 90 percent of the platform’s transactions are done through Meituan’s mobile applications. The company competes against Dianping.com (大眾點評網), a Yelp Inc-like Web site backed by Tencent Holdings Ltd (騰訊), Asia’s No. 2 Internet company.
Meituan has operations in about 1,000 cities, up from from 300 a year ago, Wang said on Sunday. Sales reached 1.9 billion yuan last year, he said.
The company, which began offering its services in March 2010, attracted US$12 million from Sequoia Capital Operations that same year, and a further US$50 million in an investment led by Alibaba and Sequoia in July 2011.
Chicago-based Groupon has a market value of about US$4.9 billion, according to data compiled by Bloomberg.
E-commerce spending by Chinese consumers will reach 3.3 trillion yuan by this year, according to a Bain & Co report from August 2013.
China had more than 630 million Web users as of June last year. Beijing-based Meituan offers local business-search services that include consumer-generated reviews. Users can also buy coupons and get group discounts.
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