US and China Food Delivery Analysis (Meituan Dianping 美团点评, GrubHub)

Tencent Confidential and Proprietary 1Tencent Confidential and Proprietary
US and China Food Delivery + Meituan, GrubHub
中国和美国的外卖市场 + 美团点评, GrubHub分析
April 2019

Contents 目录
• Fundamentals: Food Delivery
• Market: Food Delivery (US + China)
• Macro: US and China Food Delivery
• TAM Breakdown: US and China
• US Food Delivery + GrubHub, DoorDash, Uber Eats
• Market: Competitive Landscape
• GrubHub + Recommendation
• China Food Delivery + Meituan Waimai 美团外卖, ele.me 饿了么
• Meituan Waimai 美团外卖 + Recommendation

3Tencent Confidential and Proprietary
GrubHub Recommendation: PASS Meituan Dianping: HOLD; Invest if HKD ≤40 Per Share
Executive Summary 简介
1. Stronger competitors Uber Eats and DoorDash are
dramatically outperforming GrubHub.
• GRUB’s online 3PD platforms* market share declined
from 57% in 2015 à 46% in 2018 à 25% in Q1 2019.
• Competitors have strong inherent advantages: Uber
Eats’ massive customer and driver populations;
DoorDash’s restaurant coverage and capital advantage.
2. GRUB has key weaknesses that increase its vulnerability
in most of US (everywhere except its top 6-8 core cities):
• Consistent reliance on inorganic growth (acquiring
regional leaders) – now no longer viable vs. Uber Eats’,
DoorDash’s faster self-driven growth at large scale
• GRUB is replaceable: limited differentiation; service
quality disadvantage vs. 100% 1P; low switching costs.
3. Lower-than-ideal expected returns on current high price:
• Expecting 2-2.5x returns in 4-5 years, and then slower
* 3PD = online third party delivery platforms (e.g., in US, includes GrubHub, Uber Eats, DoorDash, etc., but excludes online restaurant direct like Domino’s, Pizza Hut)
1. Clear market leadership addressing a large TAM:
• Clear #1 or rising #2 in sectors addressing a RMB 500+
(US$70B+) 2023 aggregate revenue take TAM
• Total food delivery market share now 51%, addressing
2023 revenue take SAM of RMB 300B+ (US$40B+)
• Multiple levers to convert this into substantial profits
2. Powerful “one-destination” closed-loop ecosystem:
• #1 for nearly all major local services, with tremendous
ability to cross–promote, cross-sell à low CAC, higher
retention & frequency++, monetize across services
• 3-sided network effects & cost advantages of model
3. Exceptional, aggressive, ambitious team with strong
track record of winning in highly competitive sectors:
• Meituan won the “war of a thousand Groupons,”
Waimai outperformed first movers (ele.me, Dianping),
Hotels now > market “gorilla” Ctrip by room nights

Contents 目录

Fundamentals: Why Food Delivery Platforms?
Macro Reminder: Why Food Delivery? Highly attractive model + valuable consumer touchpoint, built
upon one of the 3 fundamental human needs + riding powerful market tailwinds
1. Food itself is a 刚需 (inelastic good): Everyone needs to eat multiple
times per day, and thus spend the time either (a) cooking/preparing
food or (b) going to a restaurant, ordering and waiting for the food.
2. Growing demand for convenient, time-saving services in both US
and China: White-collar Millennials in both the US and China feel
extremely busy (perceived time scarcity) due to multiple factors*,
leading to rising demand for convenience and saving time on food
prep. (*Factors include: always-at-work status due to WeChat, Slack,
mobile email; 996 work culture; time taken up by digital media feeds
like 抖音/快手 and frequent social notifications FOMO.)
3. à Convenience/time-driven Off-premise Restaurant Food is a
massive market: In the US, $250B in 2018 off-premise food spending
is now almost as much as all on-premise spending at restaurants,
with Drive-Thru now >$120B and Carry Out now up to nearly $100B.
In China, 57% of the consumers Nielsen surveyed were eating “meals
on-the-go” weekly+, higher than any other major country.
• This spend is now migrating to food delivery, due to its new
affordability and widespread access: Food delivery is the
apex of food convenience in most situations. As 1P models like
美团外卖 and DoorDash extend food delivery access across
China and the US at increasingly affordable prices, consumers
have begun adopting food delivery at a rapid pace.
Sources: Surveys by Nielsen, McKinsey, Pew, Gallup, Technomic (e.g., demand for convenience, meal kits & delivery to save time, ordering delivery more due to perceived lack of time)
4. Food delivery = attractive model and valuable consumer touchpoint:
• 3-sided network effects build competitive moat: restaurants <->
consumers <-> drivers
• Cost advantages of scale for 1P delivery model
• High retention and repeat orders among retained customers:
humans are “creatures of habit,” and customers tend to use one
service most actively vs. others (even if they have both)
• Food delivery is one of the highest frequency transactional use
cases à ideal as a first consumer 入口 from which to expand
into other services (like Meituan 外卖 à hotels).
• Attractive to restaurants too (in near term, at least): primarily
incremental revenue for restaurants, leveraging same fixed costs.

US and China Food Delivery Markets: Snapshot
USA 2018
Restaurant Food $555 bn
All Food Delivery $36 bn
Online Food Delivery $19 bn
% of All Food Delivery 53%
% of Restaurant Food 3.5%
Market Leaders, Online: % Share:
GrubHub 26%
Domino’s 18%
Pizza Hut 13%
Uber Eats 11%
DoorDash 10%
Papa John’s 9%
Postmates 7%
China 2018
Restaurant Food $633 bn
All Food Delivery $81 bn
Online Food Delivery $70 bn
% of All Food Delivery 86%
% of Restaurant Food 11%
Market Leaders, Online: % Share:
Meituan Waimai 美团外卖 59%
ele.me 饿了么 (BABA) 36%
Sources: Chris Huskey analysis (see databook); base data from Technomic, US BEA, US Census Bureau, Euromonitor, 国家统计局 Natl. Bureau of Statistics, iResearch, companies’ public info

Contents 目录

AAA CCC
Major Differences Between US & China Food Delivery: China much better suited to online food delivery
in near term, hence faster ramp-up. US growth to come, as consumer cost bottleneck opens up.
Key Difference Notes à What This Means for Food Delivery
1. Population density: China’s urban population is
highly concentrated, vs. US is much more spread
out in suburbia.
• Avg. urban population density (cities): 2,440
people per km2 in China, vs. 333 in US
• Cities with >1M people: >150 in China, 42 in US
Higher delivery efficiency & faster delivery times;
economic viability of delivery model in more areas
covering a much larger addressable population.
2. Cost to consumers: China’s food delivery leaders
built the market by offering ~free delivery for
consumers via large subsidies & incentives. vs. US
companies and investors have been much more
cautious about economics, constricting their TAM.
Consumer fees per order: Est. 33% of AoV in US,
vs. 6-8% of AoV in China in 2018 due to subsidies
(up from -1% in 2015 and ~0% in 2016-17!)
Online delivery uptake in China has been much
more rapid, vs. in the US, high consumer costs per
order are still a bottleneck.
3. Time: China’s widespread 996 in-office work
culture and long commute times (traffic *
distance) mean less time available to cook food.
Less time to cook + in office past dinnertime à
greater demand for food delivery and/or quick
food, at higher order frequencies.
4. Restaurant market consolidation: US market
share is highly consolidated by leading restaurant
chains (esp. in QSR). vs. China’s restaurant market
is still highly fragmented.
Chains’ aggregate food service market share: only
9-10% in China, vs. 50% in the US and Japan.
• Fragmented market à platforms have more
leverage vs. restaurants/chains in China.
• + Restaurants have greater need for customer
acquisition / marketing solutions in China.
5. Availability of alternatives: In the US, Drive-Thru
pickup-and-go food is widely available on the drive
to & from work: Drive-Thru is a >$120B market,
1/5 of restaurant food spending. In China, this
option is nonexistent (bad product-market fit).
In China, the relative lack of established non-
delivery options has been a catalyst to food
delivery’s growth. vs. in the US, easily available
Drive-Thru ($120B market) and Carry Out (>$90B)
have been an inhibitor to food delivery growth.
Sources: Chris Huskey analysis (see links, or databook for more info), Euromonitor, National Bureau of Statistics 中国统计局, US Census Bureau

TAM: à As a result, China’s online delivery (Meituan + ele.me) takeover is already well underway…
vs. US online delivery has been slower to penetrate, customer costs still a major bottleneck.
Sources: US Census Bureau, Euromonitor, eMarketer, iResearch
2.1% 2.4%
2.7% 3.5% 4.1% 4.9% 5.9% 6.9% 7.5%
10%
21%
36%
43%
2%
4%
8%
11%
14%
17%
20%
24%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E
Online % Penetration of Total Market:
China vs. US Food Delivery, Retail, Travel
US Online FoodDelivery US Online Retail
US Online Travel China Online Food Delivery
Source: MS AlphaWise survey data
US: Customer Costs as Greatest Bottleneck to TAM Expansion:

US Food Delivery: Similar topline ($555B); very different structure: China Food Delivery: Highly concentrated in online delivery top 2:
• Online delivery now up to 11% of total restaurants spending after rapid rise;
entire delivery market controlled by top 2, Meituan and ele.me.
Market Structure: US food delivery much more fragmented due to established Drive-Thru, Carry Out,
Offline Delivery, Pizza Delivery segments; China food delivery already consolidated into online top 2.
• Well-established offline takeaway, and online pizza direct delivery.
Opportunity for online delivery to capture share of $90B carry out mkt.
Offline (Phone to
Restaurant), $17.1 bn
Online, 3P Delivery
Platforms, $11.1 bn
Online, Rest. Direct
(~Pizza), $8.4 bn
GrubHub, $5.1
bn , 26%
UberEats,
$2.1 bn ,
11%
DoorDash,
$1.8 bn ,
10%
Postmates, $1.4
bn , 7%
Others, $0.7 bn
, 3%
Domino's,
$3.4 bn ,
18%
Pizza Hut, $2.6
bn , 13%
Papa
John's,
$1.9 bn ,
10%
Jimmy John's,
$0.5 bn , 2%
Restaurant
Direct
(~Pizza),
$8.4 bn ,
43%
Delivery,
$36.7 bn
Carry Out,
$93.1 bn
Drive-Thru,
$120.7 bn
Offline, 78.0
Online 3P Delivery
Platforms, 479.0
Meituan 美
团外卖
282.9
59%
饿了么
(incl. 百度
外卖)
190.6
40%
Others
5.5
1%
(in RMB bn) (10亿元)
Sources: Chris Huskey analysis (base data from Technomic, iResearch, Second Measure, company disclosures from Meituan, BABA, GRUB, Postmates, DoorDash)
Restaurants GTV,
4,358.0
All Delivery,
557.0 (13%)
Restaurants
GTV, $554.9 bn
Off-premise,
$250.5 bn (45%)

TAM: China’s online delivery (Meituan + ele.me) takeover already well underway…
vs. US online delivery has been slow to penetrate total spend, customer costs still a major bottleneck.
Sources: Chris Huskey analysis, iResearch, Meituan prospectus, Technomic
$20 $19 $18 $17 $16 $15 $14 $12 $11
$4 $5 $7 $11 $15
$21 $26
$32
$38
$6 $7 $7
$8
$9
$10
$10
$11
$12
$30 $31 $33
$37
$41
$46
$50
$55
$61
$0
$10
$20
$30
$40
$50
$60
$70
2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E
USDbn
US Food Delivery Spend, Online vs. Offline
Online,Restaurant Direct (mainlyPizza)
Online,3P DeliveryPlatforms
Offline (Phone to Restaurant)
190 237 158
78 67 72 98 107 118
49
126 305 479
669
879
1,091
1,329
1,560
239
363
463
557
736
951
1,189
1,436
1,678
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023ERmbbn
China Food Delivery 外卖 Spend, Online vs. Offline
Offline (Phone to Restaurant) Online Delivery

US TAM Growth: Driven Primarily by Increasing Order Frequency China TAM Growth: Driven by Frequency++ and New Users
While Meituan and ele.me will continue to acquire new users, much of 2019-23
growth will come from increasing order frequency, as urban users rely++ on 外卖.
In both US and China, continued aggressive new user acquisition to drive TAM growth in 2019-20,
followed by increasing order frequency from 2021-23 as US top 3 find further ways to reduce 2C fees.
After the influx from the top 3’s aggressive 2017-19 new user acquisitions,
retained users’ increasing order frequency will drive market growth.
Sources: Chris Huskey analysis (see databook), US Census Bureau, GrubHub
(in USD bn) 2018E 2023E
Urban & Suburban
Population
269 mn 279 mn
Addressable Population,
Food Delivery*
125 mn 130mn
Active Customers, Food
Delivery (est.)
(% of addressable)
68 mn
(54%)
99 mn
(76%)
Avg. Orders /
Customer / Year
x 9.0 14.1
AoV x $32 $36
Avg. Total Spend Per
Customer
$287 $506
TAM, Online Food Delivery
(incl. pizza / direct)
= $19.5 bn $50.0 bn
(in USD bn) 2018E 2023E
Urban Population 831 mn 940 mn
Addressable Population, Food
Delivery*
831 mn 940 mn
Active Customers, Food
Delivery (est.)
(% of addressable)
406 mn
(49%)
725 mn
(77%)
Avg. Orders /
Customer / Year
x 27 43
AoV x
43 RMB
($6)
50 RMB
($7)
Avg. Total Spend Per Customer 1180 RMB 2153 RMB
TAM, Online Food Delivery
(incl. pizza / direct)
=
¥479 bn
(US$44 bn)
¥1560 bn
(US$227 bn)
* US cities / urban areas with >50,000 people and population density of >1000 people per square mile.

Consumer Costs (Fees) are the Bottleneck to US TAM Expansion:
US Growth Bottleneck: High per order costs for consumers are the #1 factor prohibiting US TAM
expansion (new users and greater order frequency). BUT, US food delivery demand is highly elastic . .
.
• US customers often pay $10+ (an entire extra 1/3+ of order value) in
total fees on top of every order à this was prohibitive to greater
order frequency for most US customers in 2017-18.
• vs. in China, food delivery was essentially free for consumers from
2016-18 due to waived fees and discounts (subsidized by investors!)
Sources: Chris Huskey analysis (see databook), McKinsey survey in Boston, Morgan Stanley AlphaWise survey, company interviews
DoorDash Postmates
美团外卖,
2018
饿了么,
2018
AoV $33.00 $33.20 ¥44 ¥42
Service Fee $3.63 $3.25 ¥0 ¥0
% of AoV 11% 10% 0% 0%
Delivery Fee $4.49 $4.49 ¥5 ¥5
Discounts & Coupons ($0.45) ($0.22) ¥-2 ¥-2
Tip: Assume 10%
(Most Common)
$3.30 $3.32 ¥0 ¥0
Total Consumer Fees $10.97 $10.84 ¥3 ¥3
% of AoV 33% 33% 8% 6%
Sales Tax $2.31 $2.32 ¥0 ¥0
Total Paid by
Consumer
$46.28 $46.36 ¥48 ¥45
“We see 10 times as many people placing
orders when you have zero delivery fee
versus a typical $3 delivery fee.”
– Matt Maloney, GrubHub CEO
“Even a $1-2 reduction in the delivery fee
resulted in close to 10x more orders” in a
given area.
– Postmates Operations Manager, re
Postmates’ pricing experiments
Not willing to
pay any fee, 16%
$5 or less,
67%
$6-10, 17%
Maximum Fee US Consumers
Willing to Pay for Food Delivery
30%
70%
DeliveryFee DeliveryFee-$1
+1.33x
McKinsey study in Boston:
$1-2 reduction in delivery fees
à Customers ordering >1 order
per week up from 30% to 70%
Source: MS AlphaWise survey data

(1) Subscription Plans to Build Recurring User Habit: (2A) Sidewalk Robot Carts:
(2B) Full On-road Autonomous Vehicles (e.g., Nuro, Waymo):
. . . And there are major ongoing short term (subscription plans, subsidies), medium term and longer
term (on-road autonomous delivery) efforts that will reduce these costs, opening up a larger TAM.
Seeing very strong early adoption & results:
• Postmates Unlimited now accounts for 1/3 of all Postmates orders
• Subscribers’ annual spend at >2x vs. non-subscribers.
Sources: Chris Huskey analysis, DoorDash/Postmates disclosures
3P Delivery
Platforms
Autonomous
自动驾驶小
车, At Scale
Delivery Cost
Per Order:
Other Costs
Per Order:
Orders/
Hour:
$6-7
+ $3 tip
$10
$1.50
Operators /
supervisors
$1-2
Payment Fees,
Insurance, etc.
<$0.50
Maintenance,
Data, etc.
1.5-2
2
*Note: Above numbers are if subscribers only order from select partners. Actual avg. is higher because they don’t.
DoorDash DashPass Postmates Unlimited
Subscription Cost $9.99/month $9.99/month
Benefits
No delivery fees
if AoV >$15
No delivery or service fees
if AoV >$15 from partners
Subscriber Saves
Money at Above*:
2 orders/month,
23/year
1.1 order/month,
11/year

à Long term US Opportunity: As US consumer-side delivery fees are pushed toward $0, online 3P
delivery to capture increasingly large share of $90B+ US Carry Out market, + even part of Drive-Thru.
Sources: Technomic, Chris Huskey analysis
All Off-premise
Restaurant Food:
$251B
Carry Out:
$93B
All Delivery:
$37B
Online
Delivery:
$20B
3PD:
$11B
In 2018:

Contents 目录

Market: US Food Delivery Value Chain: 3P Delivery (3PD) platforms like DoorDash are expanding to
cover the end-to-end process: now largely control discovery, ordering/menu and logistics/delivery:
3P Delivery Platforms:
DoorDash
Uber Eats
GrubHub (1P own delivery*)
Postmates
Autonomous (Early Stage):
Nuro (B2B2C + B2B)
Starship (B2B2C + B2B) Users
Downstream:
Users
Upstream:
Merchants
Restaurant
Back-end:
Online, Restaurant 1P Direct:
Domino’s
Pizza Hut
Papa John’s
Panera
Restaurants
Payment
Logistics:
Delivery
Discovery:
Ordering /
Menu
Delivery Order
Management:
OrderMark
Olo
RMS+POS:
NCR Aloha
Toast
Breadcrumb /
Upserve
Lightspeed
Micros (Oracle)
Heartland
Dinerware
Square
Revel
Mastercard
Visa
Amex
Apple Pay
Venmo
PayPal
Discovery:
GrubHub
DoorDash
Uber Eats
Postmates
Yelp
TimeOut
Google
Eater
$$, purchase data Food *Note: Excludes GrubHub’s core marketplace model (2/3 of GMV), under which restaurants deliver the order themselves.

US Competitive Landscape (Snapshot): DoorDash and Uber Eats have rapidly taken market share
from once-dominant GrubHub, going from 57% GrubHub in 2015 to 25%/25%/25% in March 2019.
Sources: Company disclosures (GrubHub, DoorDash, Postmates), Second Measure, Chris Huskey analysis
GrubHub DoorDash Uber Eats Postmates
2015 2018 2018 2018 2018
Delivery Model
1. Marketplace (merchant delivers):
96% à 70% of GMV
2. 1P own delivery (Uber model半众包):
4% à 30% of GMV
100% 1P own
delivery (Uber model
半众包模式)
100% 1P own
半众包模式)
100% 1P own
半众包模式)
Market Share by GMV: 2015: 2018: 2015: 2018: 2015: 2018:
% of All Online Delivery 23% 26% 2% à 9% 0.2% à 11% 2% à 7%
% of Online 3P Delivery Platforms 57% 46% 5% à 17% 0.6% à 19% 6% à 13%
GMV $2.4 bn $5.1 bn $0.2 bn à $1.8 bn $0.03 à $2.1 bn $0.3 à $1.4 bn
% YoY Growth 32% 34% 138% 199% 61%
Orders Per Day (Avg.) 230k 440k 150k 230k 120k
Annual Active Customers 7 mn 18 mn 6 mn 6 mn 4 mn
Customer Retention: M1 / M12 (~= Long Term) 26% / 16% 27% / 19% 41% / 37% 25% / 18%
Orders Per Active Diner Per Year 12x 9x 10x 13x 12x
AoV $28 $32 $33 $25 $33
Take Rate 15% (39% for 1P) 20% (35% for 1P) 45% 46% 41%
Gross Margin 70% 55% 48% 33% 43%
Operating Margin 17% 8% N/A N/A N/A
Financing:
Raised in Past 24 Months $200M $1.2B $1.75B $400M
Latest Valuation Market cap.: $6.3B $7.1B $72B $1.85B
Major Investors/Shareholders Publicly listed Sequoia, Softbank Benchmark, Softbank Tiger, Founders Fund

US Competitive Landscape: Despite GrubHub’s earlier dominance, DoorDash and Uber Eats rapidly
stole market share in past 12 months: now DoorDash > GRUB by GMV; and both > GRUB by # orders.
Sources: (Left) Second Measure data – credit card transactions, nationally representative; (Right) Edison Trends consumer purchases data
Market Share by GMV: As of Q2 2019, now 25%/25%/25% between DoorDash, Uber Eats and GrubHub:

US Competitive Landscape: DoorDash and Uber Eats Gains by Active Users & Total Time in App:
Source: App Annie data (other third party sources show similar trends and relative positioning)
0
50
100
150
200
250
300
350
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
BillionHours
Total Time Spend in App Per Month
(More Indicative of Relative # of Orders)
Uber Eats
DoorDash
GrubHub
All Apps
Domino's
Postmates
Pizza Hut
0
2 mn
4 mn
6 mn
8 mn
10 mn
12 mn
Jul-16
Dec-16
M
ay-17
Oct-17
M
ar-18
Aug-18
Jan-19
MAUs: DoorDash's Rise
Uber Eats
DoorDash
GrubHub
All Apps
Domino's
Postmates
Pizza Hut

GrubHub’s Model: 2 key advantages: BUT outside its top 5-10 cities, GRUB has no substantial defensibility…
• Low switching costs for users: With commoditization of supply
(increasing overlap in restaurants covered + millennials seeing
delivered food as a commodity) and easy onboarding, users outside of
GRUB’s top 5 cities have limited loyalty to GrubHub vs. other apps.
• No pricing power on the consumer side: US food delivery demand is
highly elastic (as above), and if GrubHub increases its consumer-side
fees, consumers will quickly stop using GrubHub.
• Reliant on inorganic growth (acquisitions) à no longer has the
network effects lead in other cities: Outside of GrubHub’s top 5-10
cities, DoorDash and Uber Eats now cover more restaurants and have
more active customers than GrubHub in most cities/towns.
Why? GrubHub’s limited moat only covers its top 5-10 cities … all other cities are now “open season,”
and Uber Eats and DoorDash are using their structural advantages to overtake GrubHub.
Sources: GrubHub company data, Second Measure cities market share data
1. Cost advantages from dual model: GrubHub’s original marketplace-
only, no delivery model (70% of 2018 GMV) is highly profitable (GM
of 74%, $344M of GP in 2018) à GrubHub is investing this cash to
rapidly grow and subsidize its newer 1P delivery business.
2. Dominant market share in the big 5 eastern US cities à merchant-
side pricing power (higher 30% take rate) and barriers to competition
due to strong supply side advantage (restaurants onboarded).
4.2 mn
Population:
4.6 mn
8.6 mn
5.4 mn
18.4 mn
Uber Eats reversed GRUB’s market dominance in 3 top 30 US cities in <6 months:
GrubHub,
85%
59%
61%
34%
60%
New York
Chicago
Philadelphia
Washington, DC
Boston

Uber Eats Has Multiple Large Advantages from Uber Itself: DoorDash secretly built a strong lead in terms of restaurant supply:
• Restaurant supply advantage: DoorDash began with a strategy of
securing the most and best quality restaurant supply by:
1. First building a complete software chain for restaurants – CRM,
POS+RMS, customer analytics, fulfillment, marketing,
accounting, plus its B2B delivery service “Drive” – and offering
this to its restaurant partners.
2. à Used this to secure broader, higher quality restaurants
supply in hundreds of US cities, and onboard the most-liked
national chains* (à inspiring recurring txns.). DoorDash now
covers 3000+ US cities, and has 90 of the top 100 US
restaurant brands that offer delivery on its platform.
• 1P DoorDash delivery model only à best customer experience:
DoorDash avoided GrubHub’s marketplace model due to wide
variance in delivery quality, and instead focused solely on 1P delivery
to provide the best customer experience (e.g., deliver to actual door).
• Capital advantage: As DoorDash’s growth has accelerated, the big
check investors have begun piling into this designated ”winner”:
• Feb. 2018: $535M from Softbank Vision Fund
• August 2018: $250M from Coatue, DST
• Feb. 2019: $400M from Dragoneer, Temasek
Competitive Threat: Uber Eats and DoorDash have built considerable inherent advantages which,
combined with their “startup aggression” and capital, have enabled explosive growth.
Sources: Chris Huskey analysis, discussions with company employees, companies’ announcements
• Huge advantage in terms of delivery rider supply in every major city
and town – which is highly valuable given the high delivery rider labor
churn in food delivery + the costs incurred due to labor churn.
• Brand name à advantage in attracting restaurant supply: Uber’s
name gives Uber Eats immediate credibility with restaurants in any
new city, plus an advantage with major national chains (e.g., the major,
exclusive McDonald’s + Uber Eats nationwide partnership).
• Massive customer acquisition advantage thanks to Uber: Uber
already has one of the largest transacting customer bases throughout
the US, and has been able to cross-promote to Uber Eats, enabling
extremely rapid user acquisition at near 0 CAC (organic).
à So when Uber “turned on” Uber Eats
any new city in 2018 after securing
restaurant supply, results were rapid
and dramatic:
*i.e., Not McDonald’s, but better-liked chains like Chipotle, The Cheesecake Factory

The US is likely to be a 3-player market (GRUB, Uber Eats, DoorDash) over the next few years. Longer term market consolidation by Uber
Eats and/or DoorDash (not shown below) will come from either (a) rollout of autonomous delivery methods, or (b) a merger with #4 Postmates.
Due to these advantages, and multiplied by their more aggressive growth tactics, I expect Uber Eats
and DoorDash to continue taking market share from GRUB in the coming years.
$2.4 $5.1
$16.2
$1.8
$11.5
$2.1
$9.0
$6.3
$8.1
$10.9
$19.8
$17.1
$11.2
$30.2
$36.4
$64.3
0
$10 bn
$20 bn
$30 bn
$40 bn
$50 bn
$60 bn
$70 bn
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
US Food Delivery GMV Breakdown (USD bn)
Offline (Phone to
Restaurant)
TotalRestaurant Direct
Online (~=Pizza)
Others
Postmates
Uber Eats
DoorDash
GrubHub
Delivery,Total
Total3P OnlineDelivery
Platforms
TotalOnlineDelivery
8% 10% 12% 14% 17% 19% 21% 23% 25%
5%
8%
11%
13%
16%
18%
6%
8%
10%
11%
13%
14%
4%
8%
65% 61%
55%
47%
40%
34%
27%
22% 17%
14%
17%
22%
31%
39%
46%
53%
60%
66%
35%
39%
45%
53%
60%
66%
73%
78%
83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
US Food Delivery Market Share by %
Offline Delivery
Jimmy John's
Papa John's
Pizza Hut
Domino's
Others
Postmates
Uber Eats
DoorDash
GrubHub
Online 3P Delivery
Platforms
TotalOnlineDelivery
Sources: Chris Huskey analysis and forecasts (see databook); historical data from or derived from company disclosures (all), Technomic, Cowen, Second Measure data

Contents 目录
• Market: Food Delivery in the US and China

Dual Model: Original Marketplace Model & Newer Delivery Model:
• A
BBB
Clear #1 or equal contender in 12 of top 30 US cities (1/5 of population):
GrubHub Overview: What is GrubHub, and How Does it Work?
Leading Food Delivery Marketplace + Delivery Platform in Eastern US Big Cities
1. A
Sources: GrubHub company disclosures, Second Measure city-by-city market share data
$34
$3
$3
$40
$34
$3
$3
$40
Charged by Restaurant
0% 20% 40% 60% 80% 100%
New York
Los Angeles
Chicago
Philadelphia
Washington, DC
Boston
San Francisco
San Diego
Denver
Columbus
Austin
Jacksonville
GrubHub Market Share in Cities Where #1 or Equal 1/2
• Matt Maloney, CEO and founder: CEO since 2004 founding; previously
at U. Chicago Booth, where he did his MBA.
• Adam DeWitt, President and CFO: Previously CFO of Xpress Holdings
(public company), and at JPMorgan Chase. BA Economics, Dartmouth.
• Sam Hall, CPO: Previously CTO and CPO at ClassPass, a VP at Amazon
Management Team:

GrubHub’s Growth Has Been Highly Inorganic, Driven by 10 Acquisitions of Regional Leaders
vs. DoorDash’s Growth Has Been Self-driven (+ Fueled by Large Capital Infusions from Investors)
Sources: Company disclosures, Crunchbase, CB Insights
2004:
GrubHub
founded
Acquired
AllMenus and
Campusfood
Merger w/
Seamless
Acquired
DiningIn
Acquired
Foodler
Acquired Eat24
(for $290M)
and OrderUp
Acquired
LevelUp
for $390M
Acquired
Tapingo
IPO on
NYSE
Seamless
acquired
MenuPages
Acquired
Restaurants
on the Run
Acquired
Delivered Dish
& LAbite
Series A
and B
Series C: $11M, Benchmark
Series D: $20M, Benchmark
Series E: $50M, Lightspeed
$200M Strategic
Investment from
Yum! (KFC, etc.)
Acquired
Rickshaw (small)
2013:
DoorDash
founded
Series E: $250M, Coatue, DST
Series F: $400M, Dragoneer
Series D:
$535M,
Softbank
Series A: Sequoia
Series B: KPCB
Series C: Sequoia
Acquisitions:

GRUB ramped up customer & restaurant acquisition in new cities: … and continued to grow out its higher take rate 1P delivery business:
… thereby pulling up its overall blended take rate from 14% to 20%:
GrubHub Key Metrics & Financials: 2017-18 saw more aggressive GRUB expansion into new cities,
ramping up acquisition of new customers and restaurants; + ramp-up of higher take 1P delivery model.
Sources: Chris Huskey analysis, GrubHub financials and disclosures
21,300
28,800 33,900 40,000
50,000
80,000
105,000
3.4% 4.5% 5.4% 6.4%
8.1%
12.4%
15.9%
0%
5%
10%
15%
20%
25%
0
20,000
40,000
60,000
80,000
100,000
120,000
2012 2013 2014 2015 2016 2017 2018E
Restaurants and Cities Coverage
# of Restaurants % Penetration of allUS Restaurants
33
126
268
540
119 170 254
328
368
415
467
119
170
254
362
493
683
1,007
0%
10%
20%
30%
40%
0
$200 mn
$400 mn
$600 mn
$800 mn
$1,000 mn
$1,200 mn
2012 2013 2014 2015 2016 2017 2018E
Marketplace-only
Revenue
1P Delivery Revenue
Take Rate, Overall
(Blended)
Take Rate, 1P
2.3 3.4
5.0
6.7
8.2
14.5
17.7
94k
136k
183k
227k
276k
334k
436k
0
100k
200k
300k
400k
500k
0
5 mn
10 mn
15 mn
20 mn
25 mn
2012 2013 2014 2015 2016 2017 2018E
Annual Customers and Total Orders Per Day
Annual Active Customers (Left) Orders Per Day ('000s) (Right)
0.0 0.1 0.4 0.8
0
0.9 1.3 1.8 2.3
2.6
3.0
0
0.9
1.3
1.8
2.4
3.0
3.8
0
$25 $26 $27 $28 $30 $31
0
10
20
30
0
$2 bn
$4 bn
$6 bn
2012 2013 2014 2015 2016 2017
GMV and Rising AoV

New customers have pulled down avg. order frequency by >1/3
(presumably due to both higher churn and lower avg. order freq.):
And the shift toward 1P delivery naturally comes with lower margins:
… BUT these next tier customers have pulled down GRUB’s avg. order frequency to 9 orders/year,
which pales in comparison to Uber Eats’ ~13 in the US, or Meituan’s 21 orders/year in China.
2.3
3.4
5.0
6.7
8.2
14.5
17.7
14.8x
12.3x
9.0x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
0
5 mn
10 mn
15 mn
20 mn
25 mn
2012 2013 2014 2015 2016 2017 2018E
Annual Customers and Orders/Customer/Year
Annual Active Customers (Left) Orders Per Active Customer
(in 2018) Take Rate Gross Margin
Overall (Blended) 20% 55%
1P GRUB Delivery 35% 39%
Marketplace Only
(No GRUB Delivery)
13% 74%
85%
80%
75%
70%
65%
61%
55%
12% 13%
18%
25% 24% 21% 17%
11% 9% 10% 10% 10%
14%
8%
2012 2013 2014 2015 2016 2017 2018E
GrubHub Profit Margins:
Gross Margin EBITDA Margin Net Margin

AoV continues to rise steadily: And revenue per order from shift to 1P delivery is rising faster than costs:
A
GrubHub Unit Economics: Except for the sharp fall in avg. order frequency, GRUB’s UE are steadily
improving across the board, primarily driven by GRUB’s shift toward the 1P delivery model.
1. A
Sources: Chris Huskey analysis, GrubHub financials, company public disclosures (GrubHub, Postmates, DoorDash)
$25 $26 $27 $28 $30 $31 $32
$3.47 $3.44 $3.80 $4.37 $4.91 $5.60 $6.33
14% 13% 14% 15% 16%
18%
20%
0%
5%
10%
15%
20%
25%
$0
$5
$10
$15
$20
$25
$30
$35
2012 2013 2014 2015 2016 2017 2018E
AoV and Blended Take (Due to 1P Mix) are Rising
AoV (Right)
Revenue Per Order,
Overall (Blended)
Take Rate, Overall
(Blended)
$3.47
$6.33
$0.53
$2.86$2.94
$3.48
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2012 2013 2014 2015 2016 2017 2018E
Overall (Blended) Unit Economics
Other Costs of Revenue
(est.)
Delivery Costs
Revenue Per Order, Overall
(Blended)
Cost of Revenue Per Order,
Overall (Blended)
Gross Profit Per Order,
Overall (Blended)
GRUB Marketplace-only
Steady State, 2018
GRUB 1P Delivery
2018
GRUB 1P Delivery
2023 Steady State
Uber Eats
2018
DoorDash
2018
AOV $32 $32 $35 $25 $33
Commission Rate from Restaurants 13% 29% 31% 20% 25%
Commission from Restaurants $4 $9 $11 $5 $8
Avg. Delivery Fee Paid by Consumers - $2 - $9 $7
Avg. Discount - ($0.15) - ($0.25) ($0.45)
Revenue Per Order $4.21 $11.07 $11.04 $13.81 $14.95
% Effective Take Rate (all-inclusive) 13% 35% 31% 55% 45%
Delivery Driver Costs - $6 $6 $7 $7
Other Costs of Revenue (Payment Fees, etc.) $1 $1 $1 $1 $1
Cost of Revenue $1.11 $6.88 $7.11 $7.78 $7.78
Gross Profit Per Order $3.10 $4.20 $3.93 $6.04 $7.17
% GM Per Order 74% 38% 36% 44% 48%

Key Drivers: I expect GrubHub to grow to nearly $4B in revenue
and $600M in net profit by 2023E, primarily driven by:
GrubHub Valuation Analysis: No matter how you cut it (e.g, 2.4x by DCF; 2.1x gross MOIC by comps.
P/E in H1 2023), GRUB’s upside from this price not compelling enough to invest, given downside risk.
• Rising online delivery penetration from 3.5% à 7.5% of US restaurant
food spending, or 53% à 81% of all US food delivery; driven by
greater demand from millennials and decreasing consumer side fees.
• Continued GRUB expansion into smaller cities and higher customer
acquisition spending to keep up with competitors.
• Orders per active diner to gradually return to their 2012-13 levels of
14x per customer per year, as returning users pull up the average.
• Continued ramp up of higher-take 1P delivery model, from 4% of
orders in 2015 à 30% in 2018 à 58% in 2023E, improving overall take.
(in USD bn)
2019E 2021E 2023E
TAM: US Food Delivery GTV $40.0 $49.2 $60.0
GrubHub Market Share 17% 22% 27%
GTV $6.7 $10.8 $16.2
Revenue $1.5 $2.7 $3.9
Take Rate, Overall (Blended) 23% 25% 24%
EBIT $251 mn $537 mn $840 mn
% EBIT Margin 16% 20% 22%
Net Profit (NOPAT) $144 mn $340 mn $571 mn
% NOPAT Margin 9% 12% 15%
EBITDA, Adjusted $333 mn $649 mn $1,000 mn
% EBITDA Margin (Adj.) 22% 24% 26%
(in USD mn)
2018 2019E 2020E 2021E 2022E 2023E
Revenue 1,007 1,530 2,058 2,726 3,335 3,885
Net Income 78 144 218 340 468 571
Unlevered FCF 101 115 174 260 380 481
Base: Terminal:
Present Value of Cash Flows 101 106 147 201 269 312
DCF Value:
Terminal Value 21,750 WACC 9.0%
Implied TY EBITDA Multiple 25x Perpetuity Growth Rate 6.6%
Discount Factor 65%
NPV of Terminal Value 14,132
Cumulative NPV of UFCF 1,035
EV 15,167
Minus: Debt 256
Equity Value 14,912
Equity Value Per Share $163.73
Current Share Price $69.40
vs. Current Price
(i.e., Potential MOIC)
2.4x-
DCF Valuation (Given Solid Positive Cash Flows): Visibility to 2.4x:
Entry Valuation: (in USD bn)
Current Market Cap. $6.3
Debt $0.3
Cash & Equivalents $0.2
Non-controlling interests $0.0
EV $6.4

Investment Recommendation: PASS.
1. Strong competitors Uber Eats and DoorDash have rapidly
stolen market share from GrubHub... and they have substantial
inherent advantages that position them to continue gaining
market share and capture a majority of US cities except for
GrubHub’s 6-8 stronghold cities.
• GRUB’s declining market share: Uber Eats’ and
DoorDash’s aggressive expansion has pushed GRUB’s
market share down from 57% of US 3P online delivery in
2015 to 46% in 2018, a trend that is accelerating and
looks likely to continue.
Rationale for Passing:
GrubHub Investment Recommendation and Rationale: GRUB’s long term market leadership now
under serious threat from well-positioned competitors; recommend to avoid at current price. PASS.
1. PASS on GrubHub: Rationale below.
2. Revisit Uber Eats, DoorDash: Look further into (i) Uber + Uber
Eats ahead of IPO, and (ii) DoorDash post-inflection. The key at
DoorDash’s high US$7B valuation is: Will its autonomous
delivery efforts (internal 小车 and/or GM Cruise partnership)
be viable in a portion of high density areas w/ short avg.
delivery distances in the medium term?
• Uber Eats has huge inherent advantages on 2 out of 3 sides of
the food delivery marketplace: (i) one of the largest transacting
user populations in the US, to cross-promote, and (ii) a large
supply of “ready to go” delivery drivers in every major city, to
power its higher service quality 100% 1P delivery model.
DoorDash is well known to have the best restaurant supply
coverage, and now has a fresh $1.2B capital advantage too.
2. Key weaknesses of GRUB’s model expose it to greater risk from Uber
Eats/DoorDash outside of its top 6-8 stronghold cities:
• GrubHub has consistently relied heavily on inorganic growth
(acquiring regional leaders). Uber Eats’ and DoorDash’s wholly
self-driven growth is now much too rapid, and their scale much
too large, for GrubHub to compete with via acquisitions.
• Relatively replaceable: GRUB’s limited differentiation, service
quality disadvantage vs. 1P-only delivery, and low switching
costs in a high price elasticity market put it at risk of being
overtaken by Uber Eats/DoorDash in the majority of US cities.
3. Lower-than-ideal returns from current high price: Expected 2-2.5x 5-
year returns on GRUB’s current price are not compelling enough to
justify investing, especially given the threat of Uber Eats and
DoorDash taking market share faster than expected.

Devil’s Advocate / The Other Side: GRUB Highlights:
GrubHub Highlights: Where Could I Be Wrong?: If GRUB leverages its dual 3P + 1P model, drives up
avg. order frequency and maintains market share, it could be a decent investment at its current price.
1. Substantial market tailwinds: GRUB leads (led) an
inflecting US online food delivery market that is set to
grow from $19B in 2018 to $49B in 2023E, as online
penetration rises from 53% à 83%. This rise will offset
GRUB’s rapidly declining share of 3P online delivery*,
taking GRUB from 14% of total food delivery ($5B GMV)
in 2018 to 25% ($16B GTV) in 2023E. If GRUB were to
regain dominance and reach 40%+ of 2023 online delivery,
it could turn out to be a decent investment at this price.
2. Limited downside due to GRUB’s dominant, defensible
market leadership in 6 of the US’s largest cities: GRUB’s
>60% market share + strong 3-sided network effects +
merchant-side pricing power (take rate) in NYC, Boston,
Philadelphia, Chicago, etc. make GRUB highly likely to
“win” those cities long term. Even if GrubHub fails to win
everywhere else, capturing 50% of the population in its
top 8 stronghold cities would enable it to reach a $10-12B
2023E GTV and >$400M in net profit, supporting a 1-2x
gross return on its current price from these 8 cities alone.
3. Advantages from GrubHub’s dual model (3P Marketplace + 1P):
• Model economics advantage: Unlike its competitors,
GRUB can use the profits from its 3P Marketplace model
(74% GM, $344M GP in 2018) to subsidize its 1P delivery
model ramp-up, lower fees and expansion into new cities.
• Expansion advantage: GRUB’s Marketplace model
enables it to enter new cities faster than DoorDash, in an
extremely asset-light manner (start with restaurant self-
delivery only), and then add 1P capacity as it sees fit.
Because of this, GrubHub has a headstart over DoorDash
in any smaller cities where Uber does not to operate Eats.
* GRUB’s share of 3P online delivery GMV has fallen from 57% in 2015 à 46% in 2018 à 25% in Feb. 2019 per multiple sources, due to fierce competition from Uber Eats and DoorDash.

Contents 目录

Market: China Food Delivery Value Chain: Online top 2 now capture almost the entire value chain,
including Meituan’s back-end software; SMB use of third party RMS/ERP software not as ubiquitous.
3P Delivery Platforms:
Meituan Waimai 美团外卖
ele.me 饿了么 (incl. 百度外卖)
(点我打)
Long term: Autonomous:
Meituan 美团 (MAD)
AutoX (B2B模式先)
Users
用户
Downstream:
Users
Online, Restaurant 1P Direct:
海底捞外送 Haidilao
麦当劳 McDonald’s
肯德基 KFC
Pizza Hut 必胜客宅急送
Restaurants
餐馆
Upstream:
Merchants
Restaurant
Back-end:
Payment
Logistics:
Delivery
Discovery:
Ordering /
Menu
RMS+POS:
屏芯科技 (美团)
美团管家/收银
二维火
客如云
天财商龙
思迅
美味不用等
微智全景
Wiseasy (旺系列)
科脉
零距互联/360
餐道
天子星 (奥琦玮)
哗啦啦
微信支付
支付宝
QQ钱包
银联
UnionPay
美团支付
Discovery:
美团本身
点评
有赞
领趣
钱, purchase data Food

China Competitive Landscape (Snapshot): Explosive Meituan and ele.me growth has made all food
delivery into a two-player battle. Meituan has overtaken ele.me to become the clear leader at 59%.
Sources: Company disclosures (Meituan, ele.me/BABA), Chris Huskey analysis
Meituan 美团外卖 ele.me 饿了么
2015 2018 2015 2018
Delivery Model 1P (专送); 3P众包模式 (快送) 1P own delivery; 3P众包模式
Market Share by GMV:
% of Online Delivery 32% 59% 53% 40%
% of All Delivery (Online + Offline) 7% 51% 11% 34%
GMV 15.6 bn 282.9 bn 26.2 bn 190.6 bn
% YoY Growth 65% 53%
GMV Split: 1P / 3P 8% / 92% 64% / 36% 18% / 82% 54% / 46%
Orders Per Day 2 mn 18 mn 3 mn 12 mn
Orders Per Active Diner Per Year 15x 21x 15x 20x
Annual Active Customers 43 mn 303 mn 71 mn 229 mn
Avg. Annual Spend Per Active Diner ¥367 ¥934 ¥367 ¥832
AoV ¥24 ¥44 ¥24 ¥42
Revenue ¥0.2 bn ¥38 bn ¥0.3 bn ¥18 bn
% YoY Growth 81% 70%
Take Rate, Overall 1% 13% 1% 9%
Take Rate, 1P Delivery 13% 18% Unclear Unclear
Gross Margin (124%) 14% (596%) (22%)
Operating Margin (1,485%) (13%) N/A (72%)
Financing:
Raised in Past 24 Months $8.4B (incl. IPO) Unclear (>$1.5B), well-funded by BABA
Major Investors/Shareholders Tencent, Sequoia, Hillhouse Alibaba
Last Round IPO Acquisition
Latest Valuation $44B $9.5B

• A
BBB
China Competitive Landscape: Meituan has pulled ahead of ele.me by MAUs despite the Baidu
Waimai merger, and now has a strong lead in terms of monthly aggregate time spend (à orders):
Source: Questmobile data
43% 41% 40% 39% 37%
29%
43% 40% 39% 38% 36%
31%
0%
10%
20%
30%
40%
50%
60%
70%
次日 2日 3日 7日 14日 30日
App User Retention: D1-D30
美团外卖
饿了么
口碑
必胜客
麦当劳Pro
Meituan
Delivery
ele.me
Koubei
star.ele
(百度外卖)
ele.me
Koubei
star.ele
(百度外卖)
Alibaba Local Consumer Services Group
Meituan Delivery vs. ele.me: MAUs: (in 10,000’s) Monthly Aggregate Time Spend in App: (in 10,000 mins.)

Although many users downloaded both Meituan and ele.me at some point, these apps appear to still
have largely separate user groups à indicates users tend to use one more actively than the other:
Source: Questmobile data
Overlap in Active Users: Only Approx. 14% of Meituan Delivery MAUs Are Also ele.me MAUs:
Koubei (BABA)
Meituan Waimai ele.me (BABA)

Meituan’s core food delivery advantages: BUT 美团外卖’s moat is still relatively weak on consumer side because:
Why has Meituan Food Delivery 美团外卖 been able to gain market share so rapidly, and will it
maintain its market leadership?: Yes, due to “super app” usage feedback loop + supply side lock-in.
1. ”Super app” ecosystem: Meituan owns China’s major go-to consumer
platforms (Meituan, Dianping, x2 WeChat Pay 入口) and high frequency
txns touchpoints (高频 “hooks” like Mobike, Maoyan) for local services.
2. à Customer acquisition, retention & transaction frequency advantage:
Can continuously channel, re-channel and cross-promote users into
Meituan food delivery, hotels and travel, enabling (i) low-CAC customer
acquisition for additional services (e.g., 外卖) and (ii) usage feedback
loops to boost retention and txn frequency (e.g., Mobike à 美团外卖).
3. Supply side soft lock-in, via Meituan’s comprehensive merchant
offerings, including (i) software for merchants (ERP, RMS+POS, analytics);
(ii) Meituan and Dianping themselves, on which most merchants are
already registered; (iii) marketing and customer acquisition channels
across all Meituan apps and (iv) services for delivery, supply chain, etc.
4. Cost advantages of Meituan’s model: Meituan’s multiple services
enable it to better monetize each customer overall, by cross-promoting
users from Mobike/Dianping/Maoyan/外卖 à to its main profit engine,
hotels/travel/in-store. They also allow Meituan to re-direct its profits to
support 美团外卖’s growth until cash flow breakeven.
5. Cost advantages of scale: As 美团外卖 has built massive nationwide
scale, both its variable costs (deliver rider costs per order) and non-
variable costs (non-CoGS operating expenses per order) have come down
due to improving resource utilization efficiencies.
1. Low switching costs + relatively low consumer loyalty: Food delivery
demand in China is still quite elastic, and Meituan’s consumers also have
easy access to ele.me à any noticeable Meituan price increase for
consumers would simply send them to ele.me instead.
2. Limited differentiation vs. ele.me à no strong consumer lock-in: vs.
Other companies, both Meituan Delivery and ele.me have similarly
strong 3-sided network effects (consumers <-> merchants <-> delivery
riders). But vs. each other, they are not sufficiently differentiated in
consumers’ eyes. The existence of two largely equivalent networks, with
similar merchant coverage and delivery service, means consumers can
easily switch between Meituan and ele.me for the same experience.
3. No pricing power on the consumer side: Because consumer food
delivery demand is still quite elastic in China, and switching costs
between 美团外卖 and ele.me are minimal, neither Meituan nor ele.me
has any substantive pricing power on the consumer side.
1. à Given ele.me plans to increase subsidies+incentives in 2019 to
gain market share, 美团外卖 will most likely need to increase its
subsidies+incentives too in order to keep its market share.

I expect Meituan to largely maintain its 2018 market lead of >50% of all China food delivery. However, given Alibaba’s strong support and planned
continued investment in ele.me to gain market share, I expect ele.me will continue to compete as a strong #2 in the coming years.
Competitive Landscape: Considering Meituan’s strong soft advantages + clear lead over ele.me in
most top cities & Tier 2-4 cities, I expect Meituan to continue leading the market going forward:
Despite ele.me’s greater losses (-22% GM, -72% OPM in 2018) vs. Meituan 外卖 (14% GM, -13% OPM), Alibaba’s strong support gives ele.me a slight capital advantage.
Sources: Chris Huskey analysis and forecasts (see databook); historical data from or derived from company public data (Meituan, ele.me/BABA); iResearch
190 237 158 78 118
171 283
860
125
191
684
239
363
463
557
736
951
1,189
1,436
1,678
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
China Food Delivery GMV Breakdown (RMB bn)
Others
ele.me (BABA)
(incl. 百度外卖)
Meituan Dianping
美团点评
Offline (Phone to
Restaurant)
Delivery, Total
79%
65%
34%
14% 9% 8% 8% 7% 7%
7%
16%
37%
51%
54% 54% 52% 51% 51%
11% 16%
27% 34% 36% 38% 39% 40% 41%
3% 3% 2% 1% 1% 1% 1% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
China Food Delivery GMV by % Market Share
Others
ele.me (BABA) (incl.
百度外卖)
Meituan Dianping 美
团点评
Offline
Total Online Delivery
(% Penetration of All
Food Delivery)

Contents 目录
• Market: Food Delivery in the US and China

Meituan provides every local service a consumer could want,
as well as a full suite of software and services for merchants:
You could easily go an entire day using only Meituan apps (+ WeChat):
DDD
• a
Meituan Dianping Company Overview: What Does Meituan Dianping Do?
The comprehensive ecosystem for all consumer services txns, and for the merchants who provide them.
Sources: Graphics from Meituan Dianping 2018 IPO prospectus (left), Goldman Sachs (right)
To finalize

Food delivery large GMV share + higher take à 59% of revenue: But Meituan then cross-sells* food delivery customers to much higher
margin (89% GM) Hotels & Travel to bring in the bulk of its profits:
Meituan Dianping Company Overview: Business Segments Breakdown
Food Delivery is core business @ 59% of revenue, but Hotels & Travel contributes majority of profits
Sources: Meituan company data
Food
Delivery,
283 bn,
55%
Hotel,
Travel &
In-store,
177 bn,
34%
New
Initiatives
& Others,
56 bn, 11%
GMV
Food
Delivery,
38 bn, 59%
Hotel,
Travel &
In-store,
16 bn,
24%
New
Initiatives
& Others,
11 bn, 17%
Revenue
5.3
14.1
(4.3)
15.1
Food Delivery
Hotels, Travel
& In-store New Initiatives
& Others
Total
0.0
5.0
10.0
15.0
20.0
25.0
Gross Profit Contribution by Segment
Take Rate
Food Delivery 13%
In-store, hotel & travel 9%
New initatives and others 20%
Overall (Blended) 13%
Gross Margin GM
Food Delivery 14%
In-store, Hotel & Travel 89%
New Initiatives & Others (38%)
Overall (Blended) 23%
(in RMB bn) (in RMB bn) (in RMB bn)

Meituan Food Delivery has continued to rapidly acquire new users: And has aggressively scaled up 1P delivery from 8% à 64% of GMV:
…Which has dramatically improved its overall food delivery take rate:
Meituan Food Delivery 美团外卖 Key Metrics & Financials: Below Top-level Rising Order Frequency
and Spend Per Customer, Meituan’s Rollout of 1P 专送 Model Has Markedly Improved its % Take.
Sources: Chris Huskey analysis (see databook), Meituan Dianping financials and disclosures
42
106
229
303
1.7 4.3
11.2
17.5
0
5 mn
10 mn
15 mn
20 mn
25 mn
0
100 mn
200 mn
300 mn
400 mn
2015 2016 2017 2018E
Annual Customers & Total Orders Per Day
Annual Active Customers (Left) (mn) Orders Per Day (Right) (mn)
367
556
747
934
15x 15x 18x 21x24
37
42 44
0
20
40
60
80
100
0
200
400
600
800
1,000
2015 2016 2017 2018E
...While Growing Per Customer Order Freq. & Spend
Annual Spend Per
Customer (Left)
Orders Per Active
Customer
AoV (RMB)
1 26
104
181
14
33
67
102
16
59
171
283
8%
44%
61% 64%
0%
10%
20%
30%
40%
50%
60%
70%
0
50
100
150
200
250
300
2015 2016 2017 2018E
Meituan Waimai GMV, and 1P as Rising % of Total (in RMB bn)
3P GMV
1P GMV
% 1P GMV / TotalGMV
0 4
18
32
1
2
4
0
5
21
38
1%
9%
12%
13%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
10 mn
20 mn
30 mn
40 mn
50 mn
2015 2016 2017 2018E
Revenue Breakdown: Almost All from 1P (in RMB mn)
Other Revenue
Marketing Revenuefrom
Merchants
3P Revenue, Commissions
Only
1P Revenue, Commissions
Only
Net Revenue, Total
Take Rate, Total

Meituan Food Delivery 美团外卖 1P vs. 3P Model: The shift toward 1P )negative GM) weighs down GM
Meituan Food Delivery 外卖 Model: Meituan’s scaling up of its 1P delivery model (higher 18% take
rate, but lower GM w/ delivery) has increased rev. take enough to improve OpM, despite lower GM.
Sources: Chris Huskey analysis, Meituan financials and disclosures
(in 2018)
Take
Rate
Gross
Margin
Operating
Margin
Overall
(Blended)
All, both 1P and 3P 13%* 14%* (13%)*
1P
Delivery
专送
All delivery riders
employed full-time
under the Meituan
name; strict standards
and supervision.
18% (0.5%) (19%)
3P
Delivery
快送,
众包模式
Delivery riders
contracted part-time
through crowdsourced
delivery platform run
by Meituan.
4% 76% (30%)
(87%)
(22%)
(13%)
(83%)
(25%)
(19%)
(116%)
(42%)
(30%)
(120%)
(100%)
(80%)
(60%)
(40%)
(20%)
0
2016 2017 2018E
Operating Margins
% Operating Margin
% 1P Operating
Margin
% 3P Operating
Margin
(8%)
8%
14%
(34%)
(3%) (0%)
71%
78% 76%
(40%)
(20%)
0
20%
40%
60%
80%
100%
2016 2017 2018E
Gross Margins
% Gross Margin
% 1P Gross Margin
% 3P Gross Margin
*Note: Overall (blended) margins include marketing revenues and other revenues, whereas 1P and 3P above do not.

AoV is rising + take rate is increasing due to 1P Mix++:
Incentives and subsidies growth tempering, now lower % of GMV:
…And unit economics are finally moving into positive territory:
Meituan Food Delivery 外卖 Unit Economics: With 1P delivery hitting GM breakeven last year, UE are
now into stable GM-positive territory, set to improve enough to offset 美团外卖 OpEx by 2021.
Sources: Chris Huskey analysis (see databook), Meituan Dianping financials and disclosures
24
37
42 44
0.3
3.3 5.0 5.61.1%
9.0%
12.3%
13.5%
0%
5%
10%
15%
20%
0
20
40
60
2015 2016 2017 2018E
AoV (RMB) Blended Revenue Per Order, Commissions Take Rate, Total
10%
4%
3% 3%
0%
5%
10%
2015 2016 2017 2018E
Reduction in Revenue
% of 1P GTV (1P Only)
Customer Incentives %
of GTV (part of Selling
& Marketing costs)
TotalIncentives and
Subsidies % of GTV
(4.8) (0.4)
0.4
(1.6) (1.1)
5.6
Net Revenue
Per Order
Delivery Costs
Other Costs of
Revenue
Gross Profit Per
Order Operating
Expenses Per
Order
Operating
Income Per
Order
2018 Current UE: Overall (1P & 3P) Unit Economics (in RMB)
8.1
(5.3) (0.4)
2.4
(1.4)
1.0
Net Revenue
Per Order
Delivery Costs
Other Costs of
Revenue
Gross Profit Per
Order Operating
Expenses Per
Order
Operating
Income Per
Order
2023 Steady State UE: Overall (Blended 1P and 3P) (in RMB)

I expect Meituan Food Delivery 外卖 to grow to RMB 160 bn in
revenue and RMB 30 bn in bottom line by FY2023:
• Increasing online penetration: online food delivery rising from 11% in
of China restaurants food GMV (GTV) in 2018 to 24% in 2023
• Meituan Food Delivery 美团外卖 to maintain market share vs. ele.me,
despite ele.me’s planned aggressive 2019 spending on user acquisition
• Higher retention to improve avg. orders per customer from 21 per
year now to 29 in 2023E à avg. annual spend from 934 to 1500 RMB
• Continue to grow higher-take 1P model from 60% to 70% of deliveries
• OpEx per order to decrease further due to efficiencies of scale
Key drivers: Driven by rising penetration, 1P and scale benefits:
Based on global P/E comps, Meituan’s Food 外卖 business would be
valued in 2023 at RMB 900 bn, 3.5x Meituan Dianping’s current mkt cap.:
DDD
• a
Meituan Food Delivery 美团外卖 Only: Forecasts and Valuation Analysis
Sources: Chris Huskey analysis; Meituan financial reports; Capital IQ (market cap. data as of 20190411, EV using 20181231 financials)
Entry Valuation: (in HKD bn) (in RMB bn)
Current Market Cap. (3690.HK) 308.3 264.2
Debt, Short and Long Term 2.3
Cash and Equivalents 58.9
Non-controlling interests 0.0
EV 242.3 207.6
(in RMB bn)
2019E 2021E 2023E
Exit Valuation and Returns:
NTM EV/Rev., Comps Avg. 4.3x 4.3x 4.3x
NTM P/E, Comps Avg. 30.6x 30.6x 30.6x
Exit EV (by EV/S, for Q1 Exit) 250.5 448.7 679.4
Exit Market Cap. (by P/E, for Q1 Exit) 335.9 915.0
Gross MOIC by EV/Rev. 1.2x 2.2x 3.3x
Gross MOIC by P/E 1.3x 3.5x
IRR by EV/Rev. 49% 35%
IRR by P/E 13% 37%
(in RMB bn)
2019E 2021E 2023E
TAM: China Food Delivery GTV 736.0 1,189.0 1,678.0
Meituan 美团外卖 Market Share 54% 52% 51%
美团外卖 GTV 397.7 617.9 860.4
Take Rate, Overall (Blended) 15% 17% 18%
Revenue 57.8 103.6 156.9
% EBIT Margin (1%) 13% 24%
EBIT (0.8) 13.7 37.4
% NOPAT Margin (1%) 11% 19%
Profit (NOPAT) (0.8) 11.0 29.9

From a private growth stage 角度: Meituan Dianping (3690.HK): SOTP Valuation:
Meituan Dianping Whole Company Valuation: Combining our 外卖 forecasts with Meituan’s other
businesses brings us to a RMB 1.1 trillion (1.1万亿元) Q1 2023 equity value by SOTP, a 4x nominal return.
(in RMB bn)
Business/Segment:
Revenue,
2023E
NOPAT,
2023E
Multiple, Comps Avg.
Equity Value,
Q1 2023
Food Delivery 美团外卖 156.9 29.9 30.6x P/E, NTM 915.0
Hotels, Travel & In-store 49.2 13.9 19.8x P/E, NTM 274.5
New Initatives & Other 48.2 0.6 24.1x P/E, NTM 13.5
Mobike 4.2 1.1
Other 2C Businesses (跑腿, 闪购, 打车) 26.2 (2.1)
2B Merchant Services & Software 17.8 1.7
Value of Interest in Associates 2.7
Maoyan 10.7 1.7 20.0x P/E, NTM 2.7
Net Cash 29.3
Total (NAV) 254.3 44.4 27.8x 1,235.1
Minus: Conglomerate Discount 15% 185.3
Equity Value, SOTP 23.7x 1,049.8
Entry Valuation:
Entry Market Cap. (as of 20190411) 264.2
Entry EV 207.6
Exit Valuation and Gross Return:
Exit Market Cap. (at Q1 2023 Exit), SOTP 1,049.8
Gross MOIC 4.0x
IRR 43%
Sources: Chris Huskey analysis for Meituan 外卖 (see databook) and Maoyan. For other businesses not part of this case (e.g., hotels & travel), simply used GS forecasts as best available proxy.
At current price: Recommend to HOLD
– not buy, but not sell. Probable 5-year
returns (4x gross MOIC in 4-5 years; 7x
in 8-9 years) not quite high enough to
prioritize over other opportunities, if
limited capital (opportunity cost vs.
potential >10x Series C/D investments).
But are enough to justify continuing to
hold already-owned shares.
• Target: For a Series C/D growth
investment, I look for clear visibility
to 10x+ gross MOIC within 6-8 years.
Buy IF: If falls to ≤ HKD 40 per share,
then I recommend investing, given: (i)
Meituan’s core strengths, discussed on
next slide; (ii) potential >5x returns in 4-
5 years (3.5x discounted), with visibility
to 8x+ over 8-9 years and potential
further upside from new businesses
(e.g., ERP, RMS SaaS); and (iii) lower
risk than above-mentioned Series C/D,
given clear market leadership and
strength across multiple business lines.

Investment Recommendation 投资建议：
投资理由 Investment Rationale @ ≤ RMB 40 Per Share:
Meituan Dianping Investment Recommendation and Rationale: Highly compelling company with
strong positioning. HOLD at current price due to upside targets; BUY if falls below RMB ~40 per share.
a) At current HKD 55 share price: “HOLD”: upside from this
price not quite compelling enough to prioritize allocation.
But given upside to 4x by 2023-24, 建议也不要卖掉.
b) If at HKD 40 or below within next year: BUY, given
Meituan’s core strengths discussed below, expected gross
returns of >5x in 4-5 years and visibility to 8x+ in 8-9 years.
*TAM as per iResearch includes online food delivery (RMB 1.6T GMV, RMB 300B+ revenue pool), hotel booking, travel booking, local transportation – only Meituan’s main businesses
2. Powerful “one destination” model: Comprehensive, closed-
loop local services ecosystem enables Meituan to better attract,
retain and monetize both customers and merchants:
i. Comprehensive coverage of all major local services, from
high frequency/low margin to lower freq./high margin
ii. à Tremendous ability to cross-promote between services,
enabling Meituan to: acquire new customers at low CAC
(e.g., 美团 à 外卖); drive retention higher by using high
frequency “hooks” (e.g. Mobike) to re-channel users back
into other Meituan offerings (engagement feedback loop);
and cross-sell customers to high margin hotels and travel.
iii. 3-sided network effects + cost advantages of model and
scale (discussed further on an earlier slide)
iv. Merchant lock-in (soft) via comprehensive offerings for
merchants, including software (ERP, RMS, payments/POS),
Meituan & Dianping themselves, user acquisition channels,
and other merchant services (delivery, supply chain).
3. Exceptional, aggressive team, with ambitious vision and a
strong track record of winning in highly competitive sectors
1. Clear market leadership addressing an aggregate RMB
500B+ (US$70B+) 2023E revenue take TAM*, with clear
levers to improve margins and turn this into profits, by:
• leveraging ecosystem engagement loops to drive
greater order frequency (e.g., Dianping à 外卖);
• cross-selling customers to higher margin hotels &
travel for incremental profits per customer;
• ramping up merchant marketing/ads monetization,
which is currently under-monetized;
• rising AoV from consumer spending macro tailwinds.

Key Risks and Concerns 投资风险和关键的顾虑：
Meituan Dianping Key Risks/Concerns: Substantial risk from formidable competitors in each of
Meituan’s key sectors, exacerbated by the lack of strong customer loyalty to either.
1. Formidable competition in core sectors from Alibaba-
owned ele.me + Koubei in food delivery and local services,
paired with Ctrip’s renewed aggression in hotels and
travel. Supported by Alibaba and Softbank, ele.me plans
to keep spending aggressively on user acquisition to gain
market share. Given the high price elasticity and low
switching costs in this industry, this could pull away
customers and impact 美团外卖’s market share.
2. Limited customer loyalty, medium risk of replacement:
1. High price elasticity of food delivery in China +
previous reliance on incentives+subsidies + minimal
Meituan consumer-side pricing power;
2. Low switching costs for consumers;
3. Limited product/service differentiation between
Meituan+外卖 and ele.me+Koubei
4. à Medium risk of replacement for 美团外卖
(further discussed on an earlier slide).
3. Concentrated profits in two highly competitive, highly
fluid sectors expose Meituan to substantial risk:
Meituan’s financial health is highly concentrated in two
extremely competitive, uncertain and constantly-evolving
market sectors: Food Delivery + In-store, Hotels & Travel
account for 83% of 2018 revenues and 100% of gross
profits (>2/3 from the latter, the primary profit engine).
Both of these segments will be extremely competitive in
the coming years, with a non-negligible possibility that
top competitors (BABA, Ctrip) could overtake Meituan for
market leadership in either or both markets.
4. Widening operating losses (2018 losses were 3x of 2017)
due to New Initiatives, primarily from ride hailing 美团打
车, Mobike and other (unspecified) 2B services.

Thank you 谢谢

Appendix 附录

Win-win: Most 3PD orders are incremental orders for restaurants: BUT the margin on these incremental orders is naturally lower for 3PD:
3PD platforms take a share of the AoV that is:
• Marketplace model (GRUB): 15% take, restaurant self-delivers
• 1P full delivery model (Uber Eats, DoorDash, GRUB): 25-30% take rate
Appendix 1: 3PD Platforms Value Prop. & UE for Restaurants: Bring incremental orders & profits
across a larger delivery radius, at lower margins BUT better utilizing your already-sunk fixed costs.
Sources: BCG, KeyBanc Capital Markets, MS AlphaWise survey data
MARKETPLACE MODEL 1P FULL DELIVERY

Appendix 2(a): Autonomous Delivery Landscape: Many major delivery platforms now testing own
sidewalk carts; but only 3-4 players capable of full on-road vehicles, all others must partner w/ them.
Source: Chris Huskey research, public media coverage
On-road Autonomous Delivery Vehicles (路上⼤车) Small Autonomous Sidewalk Carts (⼈⾏道小车)
Platform Owner
(B2C)
Logistics Provider
(B2B2C)
Deliverypartnershipforon-road
Zippy.ai

Appendix 2(b): Autonomous Delivery Formats: Greatest long term potential for on-road (e.g., Nuro),
with autonomous sidewalk carts as support (carts being built in-house by Meituan, DoorDash, Amazon)
Autonomous Delivery
Cars/Vans & AGV
Package Carriers
Sidewalk Carts Drones 配送⽆⼈机 1P Own Delivery Fleet
3PL Delivery Platforms
and/or Crowdsourced
Startups
创业公司
• Nuro
• [AutoX]
• DoorDash
• Postmates
• Starship
• Marble
• Robby
• Zippy, Kiwi
• Matternet
• Flirtey
• Individual restaurants own
delivery (takeout model,
GrubHub Marketplace
model)
• DoorDash
• Postmates
• Instacart (商超)
Big Cos.
巨头
• Google (patent)
• Daimler (Mercedes
Robovan)
• Ford
• UPS
• Amazon (patent)
• 美团点评 Meituan
• Amazon Prime Air
• Google
• DHL
• UPS+Workhorse
• 外卖：Domino’s, Pizza
Hut, Papa John’s
• 快递：UPS, DHL, FedEx
• 商超：Amazon Fresh
• Uber Eats
• 美团外卖
• GrubHub Delivery
• 达达-JD到家
• Amazon Prime Now
Sources: Chris Huskey analysis

Appendix 2(c): Autonomous Delivery: Which approach will capture the most value?
Hypothesis: More versatile on-road model w/ high technology barriers to win most delivery types.
Density of Area (People, Restaurants 密集度)
DeliveryUrgency
City Centers (⼤城市) Regular Cities Suburbs & Towns Rural
Immediate 30-90 min.
(e.g., 外卖，便利店)
1PL human delivery
(e.g., on motorcycle, bike)
[Some areas: 自动小车]
No economically viable option
(Premium选择: Drones, <3 kg)
Same day
High reliability
(比如Amazon Fresh
的具体的时间窗⼝） (Premium选择：Drones, <3 kg)
Regular Packages,
>1-2 days
or
or
Hub-and-spoke (结合大车+小车） Nuro 形式
or
Nuro 形式
Sources: Chris Huskey analysis (也参考了McKinsey, Starship, Postmates的预测)

Appendix 3: Global Comps, Valuation/Multiples
Sources: Capital IQ (market cap. data as of 2019/04/26, all converted to USD at 2019/04/26 spot rates)
Trading Multiples: (in USD mn) Margins: YoY Growth:
Averages
Market Cap. EV EV/GMV EV/Revenue EV/EBITDA P/E Effective Take
Rate, LTM
GM %
EBITDA
Margin %
Revenue % YoY
GrowthApr-26-2019 LTM LTM NTM LTM NTM LTM NTM
All Comps (33 Companies), Median 0.8x 5x 4x 31x 21x 42x 25x 22% 54% 13% 24%
GrubHub Comps Only, Median 1.1x 4x 4x 25x 21x 34x 23x 25% 52% 5% 18%
美团外卖 Comps Only, Median 1.2x 6x 4x 30x 22x 43x 31x 25% 44% 18% 30%
Comps for Meituan Dianping Overall, Median 0.6x 5x 4x 30x 21x 49x 24x 20% 61% 12% 23%
Specific Companies by Sector
Food Delivery & Marketplaces:
Grubhub Inc. (NYSE:GRUB) 5,981 6,211 1.2x 6x 4x 44x 22x 112x 40x 27% 44% 13% 45%
Just Eat 6,217 6,124 1.1x 6x 5x 30x 25x 59x 87x 25% 72% 21% 43%
Meituan Dianping 美团点评 (SEHK:3690) 41,538 33,299 0.8x 4x 2x 32% 23% (11%) 92%
Delivery Hero 8,440 8,033 1.6x 11x 6x 25% 52% (25%) 47%
Takeaway.com 4,891 4,958 2.5x 19x 11x 162x 23% 81% (11%) 42%
Mean 13,413 11,725 1.4x 9x 6x 37x 70x 86x 63x 27% 55% (2%) 54%
Median 6,217 6,211 1.2x 6x 5x 37x 25x 86x 63x 25% 52% (11%) 45%
(See databook for others)
Other Food: Meal Delivery, Grocery Delivery: Local Services Marketplaces: China Interent Leaders Comps: US Internet Comps:
HelloFresh Yelp! Alibaba Group 阿里巴巴 (BABA) Amazon.com
Blue Apron Groupon Tencent 腾讯 Alphabet (Google)
Ocado Group 58.com Xiaomi 小米 Etsy
Domino‘s Pizza USA Baidu 百度 Facebook
Domino's Pizza Group UK OTAs & Travel Marketplaces: JD.com 京东 Twitter
Jubilant FoodWorks Limited (India) Ctrip.com 携程 Pinduoduo 拼多多 (PDD) eBay
Domino's Pizza Australia Tongcheng-Elong 同程艺龙 Zillow
Booking Holdings
Expedia

Appendix 4: GrubHub Model
Units 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2015-18 CAGR 2019-23 CAGR
US Food Delivery GTV (TAM) USD bn 30.2 31.1 32.5 36.4 40.0 45.0 49.2 54.1 60.0 6% 11%
% GRUB / Total Delivery Market % 8% 10% 12% 14% 17% 19% 22% 25% 27%
US Online Food Delivery GTV (TAM) USD bn 10.4 12.3 14.5 19.2 23.7 29.7 35.5 41.7 48.8 23% 20%
% GRUB / Online Delivery Market % 23% 24% 26% 26% 28% 29% 30% 32% 33%
GrubHub Active Diners (FY) Mn 6.7 8.2 14.5 17.7 21.2 24.4 27.3 30.1 32.5 38% 13%
Penetration of Addressable Population % 6% 7% 12% 14% 17% 19% 21% 23% 25%
Orders per active diner Orders 12.3 12.3 8.4 9.0 9.7 10.7 11.7 12.9 14.2 (10%) 10%
Avg. Annual Spend Per Active Diner USD $348.89 $366.78 $261.63 $285.89 $315.68 $352.63 $394.82 $442.61 $497.59 (6%) 12%
Orders Mn 82.9 100.6 121.9 159.1 206.7 260.3 320.0 386.9 460.6 24% 24%
% 1P Delivery % 4% 12% 20% 30% 41% 49% 55% 57% 58% 102% 14%
% Marketplace-only (Restaurant Self-delivers) % 96% 88% 80% 70% 59% 51% 45% 43% 42% (10%) (9%)
Daily Average Orders Mn 0.2 0.3 0.3 0.4 0.6 0.7 0.9 1.1 1.3 24% 24%
AoV USD $28.41 $29.81 $31.04 $31.78 $32.42 $33.06 $33.73 $34.40 $35.09 4% 2%
GTV USD bn 2.4 3.0 3.8 5.1 6.7 8.6 10.8 13.3 16.2 29% 26%
1P GRUB delivery USD bn 0.1 0.4 0.8 1.5 2.7 4.2 6.0 7.6 9.3 161% 44%
Marketplace only (3P, restaurants self-deliver) USD bn 2.3 2.6 3.0 3.5 4.0 4.4 4.8 5.7 6.9 16% 14%
Take Rate, Overall Blended % 15.4% 16.5% 18.1% 19.9% 22.8% 23.9% 25.3% 25.1% 24.0%
1P GRUB delivery % 38.6% 35.7% 35.5% 35.3% 36.1% 34.5% 34.4% 33.4% 31.5%
Marketplace only (3P, restaurants deliver) % 14.5% 13.9% 13.7% 13.2% 13.7% 14.0% 14.0% 14.0% 14.0%
Net Revenue, Total USD mn 361.8 493.3 683.1 1,007.3 1,530.3 2,058.1 2,726.2 3,335.2 3,884.5 41% 31%
1P GRUB delivery USD mn 33.4 125.5 268.4 539.9 986.2 1,439.0 2,051.4 2,537.8 2,926.9 153% 40%
Marketplace only (3P, restaurants deliver) USD mn 328.5 367.8 414.7 467.3 544.1 619.0 674.8 797.3 957.6 12% 15%
Cost of Revenue, Total USD mn 107.4 171.8 269.5 454.3 726.8 1,047.4 1,431.5 1,782.4 2,146.1 62% 36%
Delivery Costs (1P only) USD mn 25.1 66.9 137.1 277.5 485.6 728.4 1,019.7 1,274.6 1,529.6 123% 41%
Other Costs of Revenue USD mn 82.3 104.8 132.3 176.8 241.2 319.0 411.8 507.8 616.5 29% 28%
Gross Profit USD mn 254.4 321.6 413.6 552.9 803.4 1,010.7 1,294.7 1,552.7 1,738.4 30% 26%
% Gross Margin % 70% 65% 61% 55% 53% 49% 47% 47% 45%
Operating Expenses, Total USD mn 193.0 238.5 323.9 468.0 626.1 741.9 875.7 975.7 1,034.6 34% 17%
Sales and Marketing USDmn 91.2 110.3 150.7 214.3 293.7 317.2 335.6 328.9 289.5 33% 6%
Technology (excluding amortization) USDmn 32.8 42.5 56.3 82.3 122.5 161.5 209.6 251.3 286.8 36% 28%
G&A USDmn 41.0 50.5 65.0 85.5 127.2 167.7 217.7 261.0 297.9 28% 28%
Depreciation & Amortization USDmn 28.0 35.2 51.8 85.9 82.7 95.5 112.7 134.5 160.4 45% 13%
Operating Income, GAAP USD mn 61.4 83.1 89.7 85.0 177.3 268.8 419.1 577.0 703.8 11% 53%
% Operating Margin % 17% 17% 13% 8% 12% 13% 15% 17% 18%
Other Income 0.0 0.0 (1.0) (3.5) 0.0 0.0 0.0 0.0 0.0 (100%)
Taxes 23.9 34.3 (9.3) 3.0 33.5 50.8 79.2 109.1 133.0 (50%) 114%
Tax Rate % 39% 41% (11%) 4% 19% 19% 19% 19% 19%
Net Income USD mn 37.6 48.8 98.1 78.5 143.8 218.0 339.9 468.0 570.8 28% 49%
% Net Margin % 10% 10% 14% 7.8% 9.4% 10.6% 12.5% 14.0% 14.7%
EBITDA USD mn 89.5 118.3 141.6 170.9 260.0 364.3 531.8 711.5 864.2
% EBITDA Margin % 25% 24% 21% 17% 17% 18% 20% 21% 22%
UFCF (Unlevered Free Cash Flow) 27.3 40.8 139.7 100.8 115.5 174.5 260.4 379.6 480.6 55% 37%
Sources: Chris Huskey analysis (see databook for full model); GrubHub financials and disclosures (historical data)

Appendix 5: Meituan Waimai 美团外卖 (Food Delivery) Only Model
Units 2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E 2015-18 CAGR 2019-23 CAGR
China Total Food Delivery GTV (TAM) Rmb bn 239.1 363.4 462.7 557.0 736.0 951.0 1,189.0 1,436.2 1,678.0 33% 25%
Meituan Market Share (Incl. Offline) % 7% 16% 37% 51% 54% 54% 52% 51% 51%
Meituan Transacting Users, All Meituan Apps Mn 206.0 259.0 310.0 400.0 25%
Meituan Waimai 美团外卖 Active Diners (LTM) Mn 42.5 105.7 229.0 303.0 378.8 435.6 487.8 536.6 579.5 92% 14%
Penetration of Addressable Population % 6% 13% 28% 36% 44% 50% 54% 58% 62%
Orders per active diner Orders 15.0 15.0 17.9 21.1 23.0 24.8 26.2 27.7 29.2 12% 7%
Annual Spend Per Active Diner RMB 367.2 555.6 747.2 933.7 1,050.1 1,168.2 1,266.7 1,370.5 1,484.7 36% 10%
Orders Mn 637.2 1,584.9 4,089.7 6,393.4 8,711.3 10,794.4 12,789.2 14,849.9 16,950.3 116% 22%
% 1P Orders Mn 30.8 593.0 2,319.0 3,862.8 5,662.3 7,556.1 8,952.4 10,394.9 11,865.2 401% 25%
% 3P Orders Mn 606.4 991.9 1,770.7 2,530.6 3,048.9 3,238.3 3,836.8 4,455.0 5,085.1 61% 15%
Daily Average Orders Mn 1.7 4.3 11.2 17.5 23.9 29.6 35.0 40.7 46.4 116% 22%
AoV Rmb 24.5 37.0 41.8 44.2 45.7 47.1 48.3 49.5 50.8 22% 3%
GTV, Food Delivery Rmb bn 15.6 58.7 171.1 282.9 397.7 508.8 617.9 735.4 860.4 163% 25%
1P GTV Rmb mn 1.2 25.9 103.9 180.8 271.6 371.5 451.2 537.0 628.3 428% 28%
3P GTV Rmb mn 14.4 32.8 67.2 102.1 126.1 137.3 166.7 198.4 232.2 92% 18%
Gross Revenue (Pre-Subsidies) Rmb mn 272.9 5,845.8 23,196.4 41,743.1 63,256.4 87,914.1 110,899.6 137,004.6 165,103.9 435% 32%
Reduction in Revenue from Subsidies/Incentives
(for 1P orders only) Rmb mn 98.1 544.8 2,164.4 3,600.0 5,409.0 6,658.7 7,277.8 7,795.5 8,208.6 232% 18%
% of 1P-only GTV % 8.0% 2.1% 2.1% 2.0% 2.0% 1.8% 1.6% 1.5% 1.3%
% of Gross Revenue % 36% 9% 9% 9% 9% 8% 7% 6% 5%
Take Rate: % 1.1% 9.0% 12.3% 13.5% 14.5% 16.0% 16.8% 17.6% 18.2%
Commission, Deliveries % 1.1% 8.9% 11.9% 12.6% 13.4% 14.5% 15.0% 15.5% 15.9%
Marketing Revenue, Merchants % 0.0% 0.1% 0.4% 0.8% 1.1% 1.4% 1.7% 2.0% 2.3%
Other Revenue % 0.00% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03%
Net Revenue, Total Rmb mn 174.8 5,301.0 21,031.9 38,143.1 57,847.4 81,255.4 103,621.8 129,209.1 156,895.4 502% 33%
Commissions for Deliveries Rmb mn 174.8 5,209.0 20,284.0 35,719.2 53,246.4 73,842.9 92,766.1 114,082.9 136,616.7 489% 31%
Marketing Revenue from Merchants Rmb mn 0.0 83.0 710.2 2,335.0 4,476.0 7,252.6 10,661.6 14,895.1 20,008.4 54%
Other Revenue Rmb mn 0.0 9.0 37.8 88.9 125.0 159.9 194.1 231.0 270.3 25%
Cost of Revenue, Food Delivery Total Rmb mn 391.0 5,706.5 19,332.5 32,874.9 45,761.7 60,854.6 72,224.7 84,009.3 96,064.9 338% 24%
Food Delivery Riders (1PL only) Rmb mn 276.8 5,134.8 18,324.1 30,516.1 42,467.3 56,670.5 67,143.3 77,961.7 88,989.3 380% 24%
Other Costs of Revenue Rmb mn 114.2 571.7 1,008.4 2,358.8 3,294.3 4,184.2 5,081.4 6,047.6 7,075.6 174% 25%
Gross Profit Rmb mn (216.3) (405.6) 1,699.4 5,268.2 12,085.7 20,400.8 31,397.1 45,199.8 60,830.5 (390%) 63%
% Gross Margin % (124%) (8%) 8% 14% 21% 25% 30% 35% 39% (148%) 23%
Operating Expenses (美团外卖), Non-GAAP 2,378.7 4,222.4 6,298.4 10,162.8 12,865.4 15,120.5 17,658.4 20,503.6 23,403.9 62% 18%
Customer Incentives (part of S&M) Rmb mn 1,474.2 1,966.8 3,128.7 4,080.0 5,736.2 6,604.4 7,218.5 8,161.6 9,071.5 11% 17%
Customer Incentives % of GTV (1P + 3P) % 9.5% 3.4% 1.8% 1.4% 1.4% 1.3% 1.2% 1.1% 1.1%
Customer Incentives % of Net Revenue % 843.6% 37.1% 14.9% 10.7% 9.9% 8.1% 7.0% 6.3% 5.8%
Operating Income, Non-GAAP (2,595.0) (4,628.0) (4,599.0) (4,894.6) (779.7) 5,280.2 13,738.7 24,696.2 37,426.6 24% (250%)
% Operating Margin % (1485%) (87%) (22%) (13%) (1%) 6% 13% 19% 24%
Taxes Rmb mn 0.0 0.0 0.0 0.0 0.0 0.0 2,747.7 4,939.2 7,485.3
% Tax rate % 0% 0% 0% 0% 0% 0% 20% 20% 20%
Post-tax Operating Income (NOPAT) (2,595.0) (4,628.0) (4,599.0) (4,894.6) (779.7) 5,280.2 10,991.0 19,756.9 29,941.3 24% (244%)
% Margin % (1485%) (87%) (22%) (13%) (1%) 6% 11% 15% 19%
Sources: Chris Huskey analysis (see databook for full model); Meituan Dianping financials and disclosures (historical data)

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