Thank you for standing by, and welcome to the Meituan Third Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, please press star then one on your telephone keypad. I would now like to hand the conference over to Scarlett Xu, VP and Head of Capital Markets. Please go ahead.
Thank you, operator. Good evening and good morning, everyone. Welcome to our Third Quarter 2023 Earnings Conference Call. Joining us today are Mr. Wang Xing, Chairman and CEO, and Mr. Shaohui Chen, Senior Vice President and CFO of Meituan. For today's call, management will first provide a review of our third quarter 2023 results and then conduct a Q&A session. Before we start, we would like to remind you that our presentation contains forward-looking statements which include a number of risks and uncertainties and may differ from actual results in the future. This presentation also contains unaudited non-IFRS financial measures that should be considered in addition to, and not as a substitute for, measures of the company's financial performance prepared in accordance with IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to the disclosure documents in the IR section of our website.
Now, I will turn the call over to Xing. Please go ahead.
Thank you. Good evening, everyone. In the first quarter, our total revenue increased by 22.1% year-over-year to CNY 65.5 billion , and our adjusted net profit increased to CNY 5.7 billion , representing 62.4% year-over-year growth. Meanwhile, our annual transacting users and annual active merchants both experienced accelerated growth and achieved record highs. Furthermore, user purchase frequency also reached a new great peak. We continue to innovate by introducing the Everything Now lifestyle to consumers and further facilitated industry digital transformation. We have expanded the service scope that a consumer can enjoy on our platform and further diversified our product formats.
Through years of business operations, we have reached a point where we are helping over 10 million merchants generate more income while also creating job opportunities for millions of couriers. Going forward, we will continue to implement our retail plus technology strategy and provide more diverse local services to Chinese consumers, fulfilling our mission that we help people eat better and live better. During the quarter, our food delivery business maintained its robust growth and momentum, especially the peak, the peak daily order volume, which hit a new record high to 78 million in the summer. Double that, that level of three years ago. To capture more opportunities from the consumption recovery and further unlock consumption potential, we further enhanced our understanding of consumer needs across different income levels and different consumption scenarios by empowering merchants to digitize their operations.
The scale of our medium and high-frequency user base, along with their purchase frequency, continued to grow rapidly, and user stickiness also improved. We iterated our membership program, offering coupon packages of different sizes, which effectively boosted user transaction frequency. In addition, we continue to enhance consumer mindshare for a high growth consumption scenario. For instance, during this year's milk tea marketing campaign, [Foreign language] on the first day of autumn, over 21 million milk tea orders were made in a single day, showing a large potential of the afternoon tea category. Order growth for late-night snacks was also particularly strong in the summer, thanks to our effective marketing subsidy strategy. During the National Day holiday, we also witnessed strong growth from travel scenarios, such as hotels, airports, and train stations.
In addition, the value of Pinhao Fan has become increasingly evident as more and more high-quality selections at affordable prices emerge. Pin Hao Fan allowed us to effectively cater to the food delivery needs at a low price band. Moreover, campaigns and events that promote mega-hit products such as Shenqiangshou help cultivate consumer behavior in viewing live streaming and shopping on Meituan and further enhance their transaction frequency. At the same time, they also help merchants accumulate customers, improve operation efficiencies, and enhance brand image. In September, Shenqiangshou launched a special live streaming session for time-honored brands as Laozihao, to celebrate Mid-Autumn Festival in Beijing, Shanghai, Shenzhen, and Xi'an. The session was intended to both facilitate the digital transformation for time-honored brands and find new growth opportunities in food delivery for them.
We also offered merchants new tools for customer management, which will help them grow their customer base and revenue. Through these efforts, we further expanded the diversity and improved the quality of our platform supply. Meituan Instashopping, once again, grew strongly in the third quarter, with transaction volume, merchant base, and user base all increasing notably. We further promoted the integration of online and offline retail, and facilitated the rapid growth of on-demand retail. To better adapt to the evolving consumption trends, the retail industry is actively embracing the new on-demand model, which meets the needs of live now, business now, and service now. ibili 生 活 , 立 即 经 营 , and 立 即 服 务 . In fact, the everything now shopping style has emerged as a new norm among younger generations.
Even against the backdrop of last year's high base, Meituan Instashopping's order volume continued to achieve strong growth, reaching a peak of over 13 million daily orders on Chinese Valentine's Day in August. We further expanded our user base across cities. The consumers from lower-tier cities growing at a faster rate than average. Users transaction frequency has further accelerated, particularly among users aged 18- 25. Young people have emerged as the primary consumer force of Meituan Instashopping. Moreover, people have started to use Meituan Instashopping in a wider variety of time frames and consumption scenarios. For example, order mix from late-night snacks has further increased. Notably, during the third quarter, our annual active merchants grew by 30% year-over-year. We have not only empowered the digital transformation of small brick-and-mortar retailers, but have also established partnerships with nearly 400 brands.
In addition, the number of our Meituan Instamart, 闪电仓, now exceeded 5,000, complementing traditional offline supply. Evolving consumer demands are also driving changes from the supply side. We see retailers and brands constantly diversifying their SKU offerings to align with the on-demand retail channel. During the third quarter, non-food categories such as electronics, home appliances, and beauty products remained as key growth drivers. Categories such as freshly cut fruit, 果切, and iced beer, 冰啤酒, have also emerged, catering to consumers' diverse demands for quality products. We believe that on-demand retail will continue to drive consumption expansion and transform the offline retail in the future. And we are very confident that Meituan Instashopping will remain its robust growth as a leading on-demand retail platform.
Our in-store hotel and travel business maintained its strong growth momentum since the beginning of this year, with the GDV increasing by over 90% year-over-year in the third quarter. Quarterly active merchants grew by over 50% compared to the same period of last year, and quarterly transacting users also increased substantially. Throughout this period, we further solidified our competitive advantages in a shelf-based model, and leveraged short-form videos and live streaming to promote the mega-hit products. Our efforts have effectively revitalized the growth for our offline merchants, facilitated transactions on our platform, and provided consumers with better quality, more cost-effective products and services. Our in-store business grew robustly during this summer, achieving a new record in monthly GDV in August. Throughout the third quarter, we continued to iterate and refine our live streaming and special deals, 特价团购.
Then we introduced the Must Eat Festival, 吃吃节, for the first time, offering consumers cost-effective products and engaging content. By leveraging our in-depth understanding of consumer behavior and LBS features, coupled with improvement in our product capabilities, our live streaming session can effectively bring in nearby consumers with specific consumption needs. We also seized opportunities during the Mid-Autumn Festival and National Day holiday peak seasons, optimizing our Meituan platform live streaming, as well as Fanzibo , to showcase special events such as the beauty expert, Meibohui , and the wedding expert, the Hun Bohui , and more. With the Meituan platform live streaming now covering more than 200 cities, the number of live streaming sessions has increased 10x sequentially, and their GTV contribution has grown substantially.
We also enhanced our service offerings and boosted our AI capabilities to reduce the entry barrier for merchants to engage in live streaming on Meituan. Furthermore, we refined our operations and optimized the user traffic allocation for special deals, [Foreign language] , reinforcing consumer mindshare as the go-to platform for value for money and purchases. These initiatives also motivated more merchants to offer high quality, cost-effective products, resulting in increased transaction volumes on our platform. During the summer holidays and the National Day Golden Week, we proactively launched a number of marketing events and theme-based promotions to drive growth. For example, we jointly launched the first online beauty expert, Shenqiangshou Mei Bohui, in collaboration with over 30 brands. We introduced over 150 mega hits products, covering a broader range of services including facial treatment, hair salons, manicures, dental cares, and medical aesthetics.
These initiatives sparked significant consumer interest in target consumption. During the quarter, we collaborated with 20,000 merchants and launched the first ever Must Eat Festival, [Foreign language] . During the festival, we encouraged merchants to offer consumers Must Eat set meals, [Foreign language] , at affordable prices. In addition, we introduced the Must Eat Festival markets, [Foreign language] an offline event that allows consumers to sample dishes from various restaurants featured on our Must Eat list. This initiative helped boost in-store dining consumption and nearby shopping centers. Our hotels and travel business continued its strong growth trajectory in the third quarter, with both GDP and room nights growing rapidly compared to both the third quarter of 2022 and 2019.
We successfully captured the summer peak season, closely tracked the evolving consumption trends, and further diversified our products offering. For example, we introduced a greater number of deep discounted deals, [Tao Zi Tang Gong], and increased the frequency of live streaming sessions on our platform. We also expanded the quality supply and optimized the price competitiveness to meet the increasing need, diverse needs from consumers. After launching the Stay for More brands, the [Zhu De Wan] last quarter, we further enriched our Hotel Plus X package deals and enhanced our consumer mindshare through promotions, marketing campaigns, and live streaming events. In August, we unveiled the last Must Stay list for 2023, running as an [Yi Zhu Bang], featuring a selection of over 900 hotels.
We expanded our promotional efforts through live streaming and joined the marketing collaborations with the high star hotels. For small and medium-sized hotel merchants, we made our best effort to understand their different operational needs and pain points. We helped them improve traffic acquisition, provide the room renovation solutions, and broaden promotional channel, all aimed at boosting their earnings. Room nights for alternative accommodation also continued to grow rapidly during the third quarter. We enhanced our platform's self-service capabilities, help consumers make more efficient and better informed choices, and enhance the host's operational efficiency. We're now turning to our new initiative segment. At first, Meituan Select maintained its market position in the third quarter with enhanced operating efficiency. We reinforced our product pricing capabilities to provide more value for money selections.
We also continually refined our logistics network and increased the density of high quality pickup stations, elevating the overall fulfillment experience for consumers. We continue to expand Meituan Select user base and have accumulated 490 million transacting users by the end of September. Meanwhile, we have been helping farmers increase income, facilitating the circulation of agricultural products, and boosting the earnings for small business owners. Meituan Grocery, that's Meituan Maicai, delivered a further strong growth, with the GTV growing rapidly in the third quarter. We are pleased to see that Meituan Grocery has increasingly become the preferred choice for consumers, with the user base, purchase frequency, and average order value all increasing steadily. During the quarter, we solidified our pricing advantage, optimized our logistics network, and improved the operational efficiency across the entire supply chain.
In addition, we enhanced the breadth and depth of our product offerings and leveraged the holiday promotions to satisfy consumers' diverse needs and strengthen consumer mindshare. For example, sales of mooncakes and seafood experienced high growth during the holiday season. Moreover, our continuous improvement of private label products ensure that our consumers can access a wider range of high-quality items with a guaranteed supply. Since the beginning of the year, the number of macro policies aimed to promote economic growth and consumption have been unveiled, and we believe consumer demand will gradually recover next year. We will adapt to the evolving consumption trends and iterate our products and operational strategies, and provide consumers with a more cost-effective, goods and services. We intend to play an active role in enhancing the industry ecosystem and create more job opportunities and help stimulate, consumption.
Looking ahead, we will continue to focus on our retail plus technology strategy to help people eat better, live better. With that, I will turn the call over to Shaohui for an update on our latest financial results.
Thank you, Xing. Hello, everyone. I will now go through our third quarter financial results. During this quarter, our businesses delivered resilient growth, with our total revenue increasing by 22.1% year-over-year to CNY 76.5 billion. Cost of revenue ratio decreased 5.7 percentage points year-over-year to 64.7%, primarily due to the improved gross margin of our food delivery, Meituan Instashopping , and goods retail businesses, as well as the increased contribution of online marketing service revenue. Selling and marketing expenses ratio increased 4.7 percentage points year-over-year to 22.1%, mainly due to our increased promotions, advertising, user incentives, and employee benefits to stimulate consumption and solidify our competitive advantage.
R&D expenses ratio and G&A expenses ratio both decreased year-over-year to 7% and 3.3% respectively, primarily benefiting from improved operating leverage. Our focus on stimulating high quality growth and improving operating efficiency drove substantial year-over-year growth in total segment operating profit and operating margin. Total segment operating profit increased from CNY 2.5 billion to CNY 5 billion, and operating margin increased from 4.1% to 6.5%. On a consolidated basis, our adjusted net profit increased significantly year-over-year, reaching CNY 5.7 billion this quarter. Turning to our cash position. As of September 30, 2023, we maintained our strong net cash position with our cash and cash equivalents and short-term treasury investments totaling CNY 133.6 billion.
In the third quarter, cash generated from operating activities improved significantly year-over-year to CNY 11.2 billion. Now, let's look at our segment results. Starting with the Core Local Commerce. Our Core Local Commerce segment's revenue increased by 24.5% year-over-year to CNY 57.7 billion. Operating profit increased year-over-year to CNY 10.1 billion. Operating margin was 17.5% this quarter. During the third quarter, our on-demand delivery delivered resilient growth, with order volume growing 23% year-over-year. For food delivery, we saw steady growth in both monthly transaction users and their average purchase frequency. Order volume, two-year CAGR, slightly increased as compared to the second quarter, despite the external challenges and the negative impact of extreme weather.
On the unique economic side, average order value declined year-over-year against last year's high base. The decline was also a natural result of the recovery of small and medium-sized restaurants. At the same time, our strengthened marketing efforts to stimulate consumer demand and acquire new users led to a year-over-year increase in subsidy spending. However, we continue to benefit from the abundant supply of couriers. All the volume growth also drove economic scale on the cost side. While the increase in marketing demand from merchants drove the strong growth in online marketing service revenue this quarter. These favorable factors helped to offset the increase in subsidy and lower AOV. Notably, operating profit, the order continued to increase on year-over-year basis. For Meituan Instant Shopping, order volume grew robustly, with daily average order volume reaching 7.6 million this quarter.
Importantly, the year-over-year growth rate of order volume continued to accelerate from the second quarter, even against last year's high rate. We further invested in user mind share to drive growth and ramp up marketing expenditure for holiday promotions and magazine category. These investments yield positive results, with both the scale of transaction users and their purchase frequency grow rapidly. At the same time, we saw that offline retailers and brands were increasingly willing to allocate marketing budget to our platform. As a result, online marketing services revenue achieved a remarkable year-over-year growth of about 120%. Again, driving Meituan Instant Shopping's revenue growth to outpace all the volume growth this quarter. Unit economics improved compared to the same period of last year, driven by heightened advertising monetization, abundant query supply, and enhanced economies of scale. Now, let's turn to our In-store Hotel and Travel business.
The third quarter was peak season for local services. We strategically increased investments to support merchants and incentivize consumers. At the same time, we allocated sufficient resources to marketing and promotional events to successfully drive growth. GTV for In-store Hotel and Travel achieved very robust growth, and revenue grew at a slower pace than GTV. Notably, the transaction-based service revenue growth for our In-store Hotel and Travel business was very strong year-over-year. We have seen an accelerated digitization of various local service industry. The consumer demand for services like KTV, beauty, sport, and fitness, along with other leisure and entertainment services, was particularly high. Our hotel and travel business maintained its robust growth in both room night scale and ADR this quarter.
Online marketing service revenue growth was slower compared to commission revenue, as subscription-based revenue remained flat compared to the same period last year, due to the adjustment on annual fee in certain categories in lower-tier cities. However, we are pleased to see that merchants' willingness to marketing online gradually recovered. This trend is reflecting in the fast growth in both the number of merchants and their spending on placing performance-based ads, which has led to rapid recovery in performance-based advertising revenue. Operating profit remained relatively stable compared to the second quarter. The sequential decline in operating profit margin was mainly due to our increased marketing efforts to capture peak season opportunities and strengthen our competitive advantages. Nevertheless, we remain confident in the long-term profitability potential of the in-store, hotel and travel business. Turning to our new initiative.
During this quarter, revenue in this segment increased by 15.3% year-over-year to CNY 18.8 billion, mainly due to the development of our goods retail business, and partially offset by the contraction of our self-operated ride-sharing business model. The segment's operating loss ratio further narrowed to 27.2% from 31% in the second quarter of this year. For Meituan Select, the third quarter is traditionally the investment season for grocery. In fact, we increased the subsidy for seasonal summer products and rolled out more seasonal promotions. We also maintained significant expenditure on cold chain and logistics to handle the challenges posed by high temperatures. Despite these factors, our improved business operating efficiency led to a narrowing of the quarterly operating loss ratio on a sequential basis.
Meanwhile, many of our other new initiatives continued to make good progress in enhancing their operating efficiency. In summary, despite external challenges, our core business once again grew resilient, setting new records across multiple performance metrics. We are actively exploring more effective measures to navigate changes in the external environment. Our confidence in the long-term potential for our core business remain intact. Its business have proven their resilience and strong adaptability over the past decade. We believe our experience and the strong execution capability will equip us to confront challenges, strengthen our competitive mode, and capitalize on new opportunities in the future. Meanwhile, we will continue to pursue high growth strategy for our new initiatives and continuously improve operating efficiency. With that, we are now Q&A.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. ... The first question today comes from Gary Yu with Morgan Stanley. Please go ahead.
Hi, thank you for the opportunity to ask question. In light of the current, macro environment and consumer sentiment, just want to see, how would the demand and, order growth for food delivery be affected? And also, will the medium and long-term, growth targets for food delivery, still be intact? And also, have you seen any impact on Meituan Instashopping? Thank you.
Thank you, Gary, for the questions. Firstly, as we mentioned, despite external challenges, our on-demand delivery business still posted high growth rate in other consumption-related sectors. Its order volume grew by 23% year-over-year. Order volume of food delivery peaked at 78 million during this summer, double from three years ago. Meituan Instant Shopping also maintained rapid growth, peaking at 13 million orders on Chinese Valentine's Day, a new record. That said, consumers tend to be more cautious and prefer value for money selections. The demand growth for food delivery in work scenarios was affected, but we proactively adapted to these changes. For example, we expanded supply in more low-ticket size and high-quality selections. We also accelerate our strategy and efficiency in [Foreign language] So that we can better meet consumers' evolving demand through a more efficient delivery format.
In addition, for those who prefer high quality or group gathering meals, we also provide value for money, high quality selection through Shenqiangshou. We partner with high quality restaurants and leverage live streaming to stimulate consumers' non-instant demand. We also optimize our membership program and cultivate consumer mind share in looking for value for money deals on Meituan, helping boost transaction frequency. Meanwhile, we are continuously exploring other effective ways to cope with the changing consumption trends. For Meituan Instashopping, its order volume two-year CAGR was around 50% for the past three quarters. On-demand retail is a natural extension of food delivery and has large potential for online penetration across geography, across category, and across consumption scenarios. Innovative supply formats, such as Meituan Instamart, Meituan Instamart, are specifically tailored to cope with the on-demand channel and generate incremental growth for our business.
Consumer mind share in on-demand retail has increasingly deepened post-pandemic. Demand has increased across different scenarios in the third quarter, especially during nighttime and in travel scenarios. Data show that Meituan Instashopping users order food delivery much more frequently compared to non-Meituan Instashopping users. They represent our high-quality user base, who have stronger purchasing power and loyalty to our platform. We expect huge upside in the transaction frequency and up pool for these core users as we continue to enhance supply. In the immediate long term, we believe microeconomics in China will steadily recover. We have strong confidence in the long-term growth potential for food delivery and for Meituan Instashopping. With our competitive mode and execution record, we believe we can capture the growth opportunity. We remain confident on this business, and the outlook of the long-term growth target remain unchanged. Thank you.
Thank you.
The next question comes from Thomas Chong, Jefferies. Please go ahead.
Hi, good evening. Thanks, management, for taking my questions. Could management share about what you are seeing in food delivery and Meituan Instashopping lately? How should we expect the order growth and financial for these two business as we head into Q4? Thank you.
Okay, I will further take this question to explain our outlook for the Q4. We think two-year taker of our order volume in Q4 will be similar as that of the first nine months this year. There are several factors affecting the order volume growth. First, the impact from current macro environment on order volume growth, especially in workplace scenarios. Second, this year's weather is pretty warm in October and in November. Warm weather doesn't help to deliver order growth in winter season. So more people return to offline consumption as compared to last year, so negatively impact the food deliveries order volume growth. Still, we try our best to expand supply, optimize operations, and improve efficiency.
We think in Q4, these efforts will help drive consumption frequency among high-quality users, and better satisfy demand in low-ticket type meals for more mass market consumers. For the Meituan Instashopping, despite having a high base in Q4 last year, the recent order volume is still growing healthily. We will continue to provide better supply across categories and enhance consumer mind share. We expect the two-year CAGR of order volume in Q4 to be around 45%, notably outpacing the growth in broader e-commerce space. On financial outlook, we think in Q4, revenue year-over-year growth for food delivery will be slightly lower than the Q3 growth rate. Q4 revenue growth for Meituan Instashopping will be similar as that of the order volume. First, we think AOV will decline compared to the last Q4 of both business.
For the food delivery business, large ticket size, family orders, and long distance orders contribute much higher percentage in Q4 last year due to COVID. Meanwhile, in the meantime, many SME merchants suspended operation in Q4 last year. These two reasons lead to an extreme high base for AOV in last Q4. The full recovery of SME merchants and the consumption behavior changes this year lead to the meaningful decline in our AOV in Q4 for food delivery. For Meituan Instashopping, consumer demand to stockpile daily necessities and medicine were extremely high in Q4 last year. So AOV in Q4 last year was also an extremely high base. In addition, we spent less in marketing and subsidy last year due to the strong demand. But in this Q4, we are stepping up our marketing efforts to stimulate demand under the current consumption environment. Higher subsidy will also counter revenue.
On the profit side, the cost savings from the sufficient courier supply and improved economy of scale will be offset by a decrease in AOV. At the same time, such bigger order will increase quite meaningfully in Q4, this year, on a year-over-year basis, to stimulate demand. Thank you.
Thank you.
The next question comes from Kenneth Fong with UBS. Please go ahead.
Hi. Good evening, management. Thank you for taking my questions. For many categories in-store, hotel, and the travel sector, usually benefits from the consumption upgrade. Given the recent macro headwinds, how should we think about the impact to our in-store hotel and travel business? And how should we forecast this GTV growth in the next, like, one to two years? Thank you.
Thank you for this question. In the first three quarters, we noticed that the service retail grew by 18.9% year-over-year in China, much higher than the total retail sales of consumer goods. This shows that demand for service retail is still very strong. Thanks to our decade-long experience in this sector, in the rapid growth in online penetration, our in-store hotel and travel business maintained very high growth in Q3. In this environment, more and more consumers actually prefer value for money selections online. They are more price sensitive and usually compare prices among different channels before they make purchase decision. On Meituan, we offer a broad range of coupons and package deals and more affordable prices and offline walk-in prices. Through our decade-long operation, we have gained strong consumer mind share in finding stores and discounts, Meituan platform.
We can help, which can help adapt to the changing consumption trend. In addition, we have strong know-how in the pricing of package deals and LV as... So we can help merchants design popular package deals that match consumer demand. We also help merchants with traffic acquisition so that the merchants can effectively attract consumers and encourage more consumers to complete transaction online. We are glad to see our quarterly active merchants and quarterly transacting users both reach record highs, and there is still large room for further online penetration. Now, merchants and consumers pay more attention to the value that online platform offers. The consumption trends also start to emerge. For example, self-service teahouse, self-service aisles, are becoming popular among young people. Co-branding and beverage, and post-concept dining also grow, increasing popularity.
We keep up with the latest consumption trends and innovate our offerings and services to meet consumers' demand. We not only activate our existing share-based model, also enhance our special deals section to promote low price. In addition, we use live streaming to help merchants sell mega-hit value-for-money package deals and incentivize consumers to stockpile coupons. GTV contribution from live streaming rapidly increased in the past quarter. With all these measures, we are better positioned to meet the changing consumption trends and meet demand all in one place. Looking ahead, service retail will continue to be a key growth engine of China's economy. Online penetration of service retail is way higher than that of goods retailing, so we believe there is still large room to grow. Also, consumer demand and service retailing is becoming more diverse.
We are confident that our in-store hotel and travel business will continue to benefit from the progress. Considering the competitive landscape, we are going to roll out a series of measures to capture the growing market and strengthen our market position. While these measures might impact the short-term monetization rate and profit margin, we expect this business to maintain a high growth rate over the next two years, given the accelerated online penetration.
Thank you.
The next question comes from Ya Jiang with CITIC Securities Company. Please go ahead.
Hi, good evening. Thank you for taking my question. My question is also about in-store hotel and the travel business. Can you please provide some color on the performance during Mid-Autumn Festival and the National Day holiday? And how should we anticipate Q4 growth in the competition? And if the competition becomes more intense, will Q4 OPM be lower than Q3? Thank you.
Yeah, we have continued to enhance our live streaming capability in the last two quarters. As a result of live streaming sessions successfully satisfy consumer demand during the holidays. The average number of live stream sessions per day during September increased by 300% from June. GTV even surged by over 40 x. During the National Day Golden Week, we also launched a variety of holiday-themed promotions, helping boost daily transaction value of in-store hotel and travel to increase by over 150% versus 2019. For the hotel business, many tourist destinations experienced greater popularity and even had hotel room shortage during the golden week. In some niche but special tourist cities, room nights increased versus 2019. This year, we further enhanced internal traffic allocation and cross-selling on our platform. We also expanded external marketing channels.
These measures help strengthen consumer mindshare in our space for more brand s 2-to-1. In addition, we stepped up our marketing effort to help merchants on our Must Stay List, [Foreign language]. Organized dedicated live streaming sessions for these merchants. As a result, merchants on our Must Stay List experienced a 120% increase in number of bookings compared to the pre-holiday period. During the summer holiday and National Day Golden Week, we see strong growth momentum in service retailing. We refine and diversify our marketing strategy, which generate positive results. We also strengthen consumer mindshare, enhance our content capability, and offer more marketing tools to merchants. In Q4, we just had the Double Eleven campaign. We will launch more promotions and activities for the year-end shopping festival.
The market is still at a high growth stage, particularly there is large potential for online penetration in lower-tier cities and lot of new categories. We want to further enhance the existing users' mindshare and to penetrate deeper into lower-tier markets. So in Q4, we will make more targeted investments and dynamically adjust our marketing strategy to drive growth. We estimate to further step up our marketing expenses on sequential basis and significantly expand our local business development team in Q4 in the lower-tier cities, which will impact profitability. But we are confident that our business scale should continue to grow rapidly during this investment. As for competition, we always view it from a positive perspective. There is still large potential for online penetration in local service industry. We believe competition helps accelerate this process, and it benefits both consumer and merchants.
It also pushes harder to make more innovations and positive changes. We need to make short-term investment to develop new markets or to optimize our products, and this may impact near-term profitability. These investments are necessary. It's not just about the current competitive environment, but we also believe this will help us make a long-term sustainable growth. Looking ahead, we will dynamically assess our investment, ROI, and allocate resources accordingly. We will strengthen our capability in content operations as well as consumer and merchant mindshare. We remain confident in the long-term growth and long-term profitability for in-store hotel and travel business. Thank you.
Thank you. It's helpful.
The next question comes from Alex Yao with JP Morgan. Please go ahead.
Good evening, management. Thank you for taking my question. Based on the recent two quarters financials, there seems to be challenges to the loss reduction of the new initiative segment. In addition, the segment growth is much slower than the core business. Given the loss mainly came from Meituan Select, do you plan to make any strategic changes or adjustment to Meituan Select? How should we expect its revenue growth and operating loss going forward? Do you have a sense of the break-even point for Meituan Select? And lastly, any update for all the other new initiatives? How should we think about their long-term financial returns? Thank you.
Thank you, Alex. I will take this question. So, I totally understand that shareholders may be quite concerned about the revenue growth of our new initiative segment. So first, allow me to clarify. Our new initiative segments consist of not one, but a bunch of different businesses and they have different accounting treatments and revenue recognition ways, which would may impact revenue growth. So revenue growth of our new initiatives segment slowed down in Q2 and Q3, mainly due to revenue mix change.
So first, for ride sharing, and we shut down the self-operating model in March. So Q3 revenue of ride sharing declined sharply because it declined sharply year-over-year. And the second, and our B2B food service distribution business, that's known as [Foreign language], and recorded a faster growth from its marketplace model, the three P service. But, you know, so three P service revenue on net basis compared to the one P service which can be booked on a gross basis.
So the 3P, 1P mix change negatively impacted its revenue growth. Actually, the quality case is growing very nicely. It's just a different accounting treatment. So if you exclude these two factors, growth of this segment is actually quite similar as the growth of core segment in Q3. In Q4, we will face more pressure from new initiatives revenue growth. The impacts from ride sharing scaling back and quality's revenue mix change will still be there. It will persist. And in addition, Meituan Maicai and Meituan Select had a very high base in Q4 last year, and due to COVID surge at that time. And as you probably know, a very big chunk of the loss is from the Meituan Select.
So I will address it here. Because the recent macro headwind and offline consumption recovery, the growth of the Meituan Select slowed down a little bit. We need more time to iterate our operations. But, of course, but I, I probably need to, well, elaborate on how we look at the Meituan Select business. So this way, it's part of our growth strategy. Remember that, the mission of the company is to help people eat better, live better. We are very serious about our mission. So I, I, I believe in future, as, as been proven in the past several years, in future, more and more people will use food delivery. They don't have to cook for themselves. But there are still a big chunk of people who prefer, for whatever reason, to cook for themselves, and they need to buy grocery.
So that means grocery is particularly important, and particularly big category of retail. It's big, it's important, but it's particularly difficult. So in the past 20 years, either in the U.S. or in China, people have tried many ways to make online grocery work. So far, it hasn't been very successful. But because grocery is such an important category of retail, and also along the way, if you can make online grocery work, you must have cracked the problem of building a different type of logistic network. And on top, on top of that logistic network, there's a huge potential for other general merchandise. So I think that's why online grocery, in general, or Meituan Select, in particular, is I believe they have big potentials.
But it's very difficult because it requires the platform to build a different type of fulfillment network. So that's why we have been trying, we have been doing trial and error for the past three years across. So that's the first strategic value of Meituan Select, because grocery itself is big. And second, our Meituan Select business is effectively helping help us bring new users and increase the user frequency and create cross-sell opportunities. So that is value. As I said, it's quite difficult because for all the reasons. So if you look at the numbers, it's growing, but the growth has slowed down a little bit. And we are looking into the reasons, and I think we have identified the reasons, and we have devised a new revised strategy to improve the operation.
So for this way, we are very focused on building and improving the business, and we will make adjustments in strategy and operations, but, but not that kind of a strategic investment you are talking about. So I think we are going to improve the business. So for this, the past quarter and the coming quarters, I think the revenue will keep growing, the operating loss-... it will, or in the past quarter, the operating loss remained sort of flat on sequential basis. But because the total size is bigger, so that means the loss margin keeps narrowing down sequentially. So I think that's a good sign. Of course, we are trying our best to, to improve faster. I, I think it will take, take some time.
So going forward, we will keep focusing on high-quality growth and improve efficiency in all fronts. We expect the loss will narrow significantly in the next three years. In the long run, we still believe it can achieve standalone profitability and create a bigger value. So that's my take on Meituan Select. For other new initiatives, I think they have more good news. Efficiency continue to improve, and their path to profitability is clear. For example, our [Foreign language] and our restaurant SaaS business have both become the number one player in China, and efficiency improved continually during the past two years. They help increase merchant stickiness with our platform. Also, our bike-sharing business has achieved a positive EBIT for two consecutive quarters.
Also, our electric moped-sharing business also improved and realized a positive cash flow. Last year, our shared power banks business already become profitable. This year, we further improved the operating efficiency. So overall, we remain quite confident to be able to achieve standalone profitability for most of our new initiatives, and not to mention the tremendous strategic value they may bring to us. On the other hand, I think that we are a rational company. So if we realize we come to the realization that any of the new initiative has very limited chance to make standalone significant profit in the long run, we will adjust our strategy, and also accordingly, we will adjust the resource allocation. I think that's the rationale. Thank you.
The next question comes from Ronald Keung with Goldman Sachs. Please go ahead.
Thank you. Thank you, Wang Xing, Shaohui Chen, and Scarlett Xu. So we've seen that the operating cash flow has significantly improved this year and has become more stable. So, when the company has sufficient net cash, and as the core business generates stable profits, just what is management's plan for capital allocation? And do we have a buyback plan as we see share price upside from a long-term perspective? Thank you.
Thank you, Ronald. Yes, we have noticed a lot of companies are doing share buybacks lately, and we understand it's a good way to allocate capital for those companies, particularly those companies with mature and stable businesses and strong cash reserves. Especially if buyback price is significantly lower, below a company's so-called intrinsic values. So it will benefit both the company itself and its shareholders for longer term. So for us, I think first we need to make sure we have enough cash. So given the current interest rate of the U.S. dollars, I think we need to make sure we have enough cash overseas, not just enough cash, enough cash overseas, we pay our bonds in the coming future. So I think that's the bottom line.
On the business side, I think, our new initiatives are still at investment stage, we are also exploring overseas opportunities. So we believe investing resources into our businesses can help us better capture market opportunities. Also, they will allow us to participate more in the industry's transformation process and solidify our competitive moat. At the same time, from a longer-term perspective, of course, I believe our company is undervalued at the current share price. So we are confident about the long-term growth and the long-term value of our company. So we think that the current share price only reflects value of the one business at a good degree. So we have had a very serious discussion about share buyback at our board last board meeting.
The board has discussed and authorized us to do a share buyback up to $1 billion. So of course, we will then take into consideration the mentioned investment opportunities in our businesses, and our cash flow and cash position, both onshore and offshore, and our stock price. I think that's the answer you want to hear. Thank you.
Thank you, Xing.
There are no further questions at this time. I'll now hand the call back over to Scarlett Xu for closing remarks.
Okay, thank you for joining our call. We look forward to speaking with everyone next quarter. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.