Source | Bohu Finance (bohuFN)
Author | Spirit
It is understood that Meituan plans to launch KeeTa, an international food delivery platform in Riyadh, Saudi Arabia, in the next few months.
This will mean that Meituan's expansion outside of Greater China is the first time that it has expanded its business outside of Greater China, which is a deepening of its global strategic layout.
01 Meituan's global ambitions
Meituan's ambitions for globalization have long been revealed. In 2017, Wang Xing pointed out three ways to deal with the second half of the Internet with the words "heaven, earth, and globalization". He mentioned that globalization is a great opportunity for Chinese companies, and it is also something that China must do in the future.
Meituan has also taken related measures, launching an overseas accommodation business in 2017, investing in a number of overseas unicorn companies in 2018, and planning to extend its food delivery business beyond Chinese mainland in 2022, with KeeTa landing in Hong Kong, China in 2023.
According to reports, as early as 2018, Meituan had planned to expand the Hong Kong food delivery market, but the plan was shelved because Hong Kong did not allow electric vehicles on the road and the delivery capacity could not be guaranteed.
According to the latest disclosure by Meituan, Meituan KeeTa has become the largest food delivery platform in the Hong Kong market, China, and is developing rapidly.
On February 2 this year, Wang Xing, the founder of Meituan, announced a major adjustment of the organizational structure in an internal letter, handing over the Meituan platform, in-store, home-to-home, basic R&D and other businesses to Wang Puzhong, and SaaS, cycling, power bank and other businesses to be managed by Zhang Chuan, while he considered directly taking the helm of drone delivery and overseas business. This change is regarded by the outside world as the biggest organizational change of Meituan since its establishment, and it also shows Meituan's greater ambition for overseas development.
Seeking increments overseas has become a major consensus within Meituan. Since 2022, the number of Meituan transaction users and active merchants have not increased significantly. In 2022, Meituan Takeaway will achieve 678 million transaction users, a year-on-year decrease of 1.8%; The number of active merchants was 9.3 million, a year-on-year increase of 5.1%.
In 2023, although revenue and net profit exceeded expectations and turned losses into profits throughout the year, new business is still losing money, reaching 20.2 billion yuan, which is obviously lagging behind Meituan's overall profit.
With the peak of Internet traffic and the disappearance of dividends, Meituan bid farewell to the era of high user growth, and going overseas has become an important way to open up new markets and resist competition.
So far, Meituan has received some positive signals in the direction of globalization.
02 Under the Hong Kong market, Meituan's positive signal
According to the latest data released by research agency Measurable AI, based on the number of orders in March 2024, Meituan's food delivery business KeeTa in Hong Kong accounted for 44% of the market share, and the other two food delivery platforms, Foodpanda and Deliveroo, had a market share of 35% and 21% respectively. In other words, KeeTa has become the largest food delivery platform in Hong Kong.
Back in 2021, according to Measurable AI, a third-party data platform, Deliveroo and Foodpanda accounted for 44% and 51% of the Hong Kong market respectively.
Until Meituan KeeTa entered the Hong Kong market, Deliveroo and Foodpanda still occupied the vast majority of the market share as the two main players. Whether it can break through has also become a major concern of the outside world for Meituan KeeTa.
As a new entrant, Meituan KeeTa's development is undoubtedly rapid. According to Meituan data, as of January 2024, KeeTa has more than 1.3 million registered users in the Hong Kong market. At the merchant operation level, the average monthly growth rate of merchants on the platform has exceeded 30%, and nearly 10,000 merchants have settled in.
Judging from KeeTa's playing style, speed and price are important means for it to break through. Expensive delivery prices and erratic delivery speeds are significant problems for the two major food delivery platforms, Foodpanda and Deliveroo.
To this end, on the one hand, KeeTa focuses on speeding up, and in a prominent position on the KeeTa homepage, Meituan writes that every meal will give users a punctual treasure. On the other hand, in a prominent position on the KeeTa homepage, "HK$300 reward for new user registration" is highlighted, and there is also a HK$50 reward for inviting friends. "We are trying to reduce the usual takeaway price of 200 wen to 60!" Employees of the Meituan KeeTa team said this in the circle of friends.
The achievements and playing experience in the Hong Kong market are of great significance to Meituan. Wang Xing has made it clear that the pilot business in Hong Kong is the first step in the exploration of internationalization. He believes that Hong Kong's basic environment in terms of culture, language and financial facilities is similar to that of the mainland, and it is suitable as a launching place for overseas business to prepare for future international expansion.
Market analysts also pointed out that KeeTa's expansion in Hong Kong "is just likely to add another 7 million users", while Meituan already has more than 678 million users in the mainland, and KeeTa will not have a big impact on Meituan's revenue.
In the eyes of analysts, Meituan is trying to find a market that is culturally close to Chinese mainland, build a team, and in the long run, try to see if they can occupy a certain market share in overseas markets.
A KeeTa employee also revealed that Hong Kong is not Meituan's ultimate goal, and they hope to run through the link and then go overseas.
03 Meituan's overseas challenge has officially arrived
Although it has achieved a clear victory in the Hong Kong market, for Meitu, the challenge of food delivery overseas can be said to have just begun.
First of all, the problem of the "heavy" mode of takeaway going to sea still exists.
To carry out a takeaway business, it is not only necessary to establish a benign cooperation with local offline merchants, but also to involve more complex personnel operation and management.
Secondly, the differences in consumption habits and social culture are still the threshold for Meituan to enter overseas.
Take the Middle East market as an example, the Middle East is strategically located at the "crossroads" of the world, with many immigrants and diverse cultures, and immigrants from different countries have their own food and living habits. It is difficult for a single food delivery platform to meet the needs of all consumers.
Finally, Meituan's official entry into the overseas food delivery market also means that Meituan has ushered in a head-to-head confrontation with overseas competitors.
Well-known food delivery companies around the world include Meituan in China, Mail.ru in Russia, Delivery Hero in Germany, Deliveroo in the United Kingdom, Just Eat Takeaway in the Netherlands (a merger of Just Eat and Takeaway), and DoorDash in the United States.
In the past, Meituan only focused on Chinese mainland food delivery and competed with a few competitors for the market, but as it expands globally, it will also compete more fiercely with overseas competitors.
However, Meituan's overseas development is both challenging and full of possibilities.
On the one hand, Meituan has been deeply involved in the mainland market for many years, and has deep platform infrastructure and operational experience, which is still a valuable asset for Meituan. Although it cannot be fully replicated in overseas markets, it can also provide a better and differentiated consumer experience under limited conditions based on the overseas local market environment.
On the other hand, Meituan is likely to develop more comprehensive services based on the food delivery business to meet other needs of users.
There is a view that one of the unique features of the food delivery market in the Middle East is that the food delivery platform will most likely not only focus on the food delivery business, but will gradually extend to local life, e-commerce retail and other comprehensive services. This is because the market in the Middle East is limited, with a population of about 50 million to 60 million in the wealthier Gulf countries, which is difficult to match with the size of China's market.
According to the analysis of practitioners, "the Middle East food delivery market is still in the process of gradual development and evolution of various platforms. This evolution will revolve around providing more services and deepening business development on the one hand, and expanding more ethnic markets on the other. With the Middle East's population growing rapidly, it's important to learn how to expand your diverse audience as soon as possible. ”
In such a market environment, Meituan is likely to launch a food delivery business while further tapping into more user needs and opening up more development possibilities.
This time, entering the Middle East, can Meituan replicate its victory in Hong Kong? We see that infinite challenges and opportunities beckon.
Resources:
1. E-commerce News: Meituan won the Hong Kong market, and Wang Xing found a way to go to sea
2. Xiaguang Society: Meituan enters the Middle East, is this industry going to be hot?
3. Xiaguang Society: Meituan Nuggets Saudi Arabia
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