Quhuo Limited (NASDAQ:QH) ("Quhuo" or the "Company"), a leading gig economy platform from China, continued to achieve fast growth and further solidified its leadership
Quhuo Limited (NASDAQ:QH) ("Quhuo" or the "Company"), a leading gig economy platform from China, continued to achieve fast growth and further solidified its leadership in China's flexible employment market. In the third quarter of 2021, its total revenues were RMB1,105.5 million (US$171.6 million), representing a 43.7% year-over-year increase.
"Facing the ongoing pandemic, we generated a strategic loss in the first quarter of 2021, aiming to first quickly expand market share and then focus on achieving profitable operations later in the year. Since the second quarter of this year, our operations have rapidly improved with net income reaching RMB24.9 million (US$3.9 million) in the third quarter, which we believe represents the effectiveness of our strategic planning and implementation," said Leslie Yu, the CEO of Quhuo.
The solid and robust growth was driven by booming market demand and Quhuo's unremitting business and geographical expansion. Quhuo has expanded its on-demand delivery services to the promising on-demand retail market. Meanwhile, its investment in R&D doubled in the third quarter compared to the same period last year, as the Company has been leveraging technological innovations to enhance its competitive advantages.
On-demand retail becoming the new growth engine
Due to the pandemic, people tend to spend more time at home, which has created more opportunities for the on-demand delivery industry. In the third quarter of this year, Quhuo's number of average monthly delivery orders rose to 53.1 million, representing 59.1% year-over-year growth. Revenues from on-demand delivery solutions were RMB1,047.0million (US$162.5 million), representing an increase of 38.0% from RMB758.8 million in the third quarter of 2020. The Company provided services in 1,231 business circles across 87 cities nationwide, compared with 1,067 business circles across 81 cities in the same period in 2020.
While on-demand delivery services are penetrating all aspects of people's daily lives, on-demand retail has become the new growth engine for the industry. According to iResearch, a leading market research firm, the on-demand retail market in China is expected to hit about RMB900 billion in 2024.
The explosive growth of this market reflects changing consumption trends in China. According to another report by Accenture on China's consumers born after 1995, the young generation of consumers are more concerned with delivery speed. More than 50% of consumers born after 1995 would like to receive their goods within the same day, and another 7% even hope to receive within two hours. They are also more willing to pay extra fees for speedy deliveries.
Expansion to serve communities and households
Housekeeping and accommodation solutions have become Quhuo's second largest business sector. In the third quarter of 2021, revenues from housekeeping and accommodation solutions were RMB21.9 million (US$3.4 million), representing a significant increase of 538.0% from RMB3.4 million in the third quarter of 2020.
Quhuo has expanded its housekeeping and accommodation services from hotels and B&Bs to cover communities and households. Earlier this year, Quhuo announced a strategic partnership with Gemeite Technology Co., Ltd., which marked a key step in the strategy transformation of the Company's business model from B2B to 2-Family (B2F). The two parties have jointly launched a new platform, Letfix, which will leverage Quhuo's extensive workforce platform, tech-driven employment management system and customized services to serve over 10 million households in China.