Study on Financial Flexibility and Profit Model of Internet Platform Enterprises

A Case Study of Meituan

Abstract

With the in-depth penetration of the digital economy, Internet platform enterprises have become a core driving force behind the transformation of China’s economic structure and social lifestyle. Compared with traditional enterprises, Internet platform enterprises exhibit unique financial characteristics: "high growth relies on user scale and network effects, while profitability and financial flexibility are constrained by multiple factors". As a leading local life service platform in China, Meituan’s financial statements not only reflect the profit advantages of its core businesses (such as food delivery and in-store & hotel services) but also expose the practical pressures of new business losses and cash flow fluctuations. This study takes Meituan’s financial data from 2018 to 2023 as the research sample, combines a three-dimensional analysis of the income statement, balance sheet, and cash flow statement, and uses DuPont Analysis to decompose the driving factors of Return on Equity (ROE) to systematically explore Meituan’s financial flexibility level and profit model characteristics. The research findings show that Meituan’s profit model presents a "dual-drive + strategic reserve" structure: the food delivery business contributes stable cash flow, the in-store & hotel business provides core profit support, but the continuous investment in new businesses (such as community group buying, mobility services, and retail) significantly drags down overall profitability. In terms of financial flexibility, Meituan mainly relies on capital market financing (equity + debt) to maintain expansion rather than the accumulation of internal operating cash flow, forming a short-term cycle of "financing - investment - loss - refinancing". In the long run, although new businesses suppress profits in the short term, they still have strategic value to become important growth drivers in the future under the combined influence of market competition and policy environment. This study not only fills the research gap in the theory of financial flexibility and profit model interaction of Internet platform enterprises but also provides practical references for platform enterprises to optimize their financial structure and for policymakers to improve the regulatory framework.