Source | Tech Planet
Text | Wang lin
Compared with the non-stop local life battlefield with Douyin, the reduction of the amplitude, and the community group buying that is still losing money, takeaway is probably Meituan's most imaginative business. It has regained the confidence of capital, and even Meituan has plans to split its overseas business and go public independently after it matures.
In the past year, Meituan's overseas business, KeeTa, has entered the Hong Kong food delivery market like a catfish. Their next target is Riyadh, Saudi Arabia, a place with a GDP per capita of more than $30,000, temperatures above 35°C more than half of the year, and frequent sandstorms.
This is the first time that Meituan has expanded its business abroad. Internally, the level of secrecy of overseas business is very high, and one of Meituan's core local business employees described it as "mysterious". At the beginning of this year, Qiu Guangyu, the head of overseas business who originally reported to Wang Puzhong, senior vice president and head of core local business of Meituan, reported to Wang Xing, founder and chairman of Meituan.
Eight days after handing over a satisfactory first quarter 2024 earnings report, Meituan held its 2024 annual shareholders' meeting. One attendee told Tech Planet that Wang Xing was present at the meeting, which lasted about one hour. When talking about the overseas business, Wang Xing said that the international business started late, and currently has the largest market share in Hong Kong in terms of order volume, and in the long run, it will evaluate and sort out more overseas markets such as Southeast Asia, Central Asia, and Europe.
Food delivery itself is a tough enough industry with high enough barriers, and there are many competitors, but no one has yet been able to shake Meituan's position in the domestic market. In the past three years, Meituan's market value has fallen from more than $360 billion to less than $100 billion.
If the Hong Kong market is just a small test, then Saudi Arabia may be the beginning of Meituan's overseas conquest.
KeeTa tested the waters in Hong Kong and rushed to the first place in terms of orders
Meituan's overseas business has two teams, one in Beijing and one in Hong Kong. Tech Planet has learned that KeeTa has also set up a customer service team, and their office is not in Causeway Bay, where housing prices are as high as more than 200,000 yuan, but in the relatively cheap Greater Bay Area.
On September 20 last year, KeeTa and the "Tam Jai Sange Mixian", known as the Hong Kong canteen, jointly launched a single package, which is only 29 Hong Kong dollars for a single meal, and free delivery fees, which is even cheaper than ordering takeaway in the mainland, and the single package has set a monthly single product sales record in the Hong Kong takeaway market in 2023, which is almost the most popular promotional event of Meituan in the past year.
Many riders said that every Tam Jai Sange Mixian they went to was bursting orders. According to Tech Planet, the original price of a single package was 49.9 Hong Kong dollars, and if you add a delivery fee of 20-30 Hong Kong dollars, a takeaway meal will cost 70-80 Hong Kong dollars. However, the event is seasonal and lasts only three days.
Real money subsidies are still the most immediate solution. Qimai data shows that on September 20, KeeTa ranked first in the total number of downloads of free apps in the port app store.
As of March 2024, Meituan's platform KeeTa's market share of food delivery orders has jumped to 44%, making it the largest food delivery platform in the Hong Kong market, according to Measurable AI, an alternative data service provider for MDT in Hong Kong, China. According to a KeeTa employee, the actual order volume has accounted for more than 44%, but Keeta is not the first in terms of GMV.
KeeTa is the No. 1 restaurant in Hong Kong in terms of unit volume, thanks in part to its "one-person canteen" project. As of May 22, 2.01 million users had downloaded the app, meaning that nearly 30% of Hong Kong people are already KeeTa users. At present, there are more than 10,000 restaurants settled in, covering a variety of cuisines such as Chinese, Western, Japanese, Korean and Thai.
In mainland China, Meituan has been able to deliver food delivery to consumers as quickly as possible through algorithm optimization, and KeeTa's delivery efficiency has indeed been praised by many consumers. At the beginning of its launch, KeeTa launched the on-time guarantee service, and the current punctuality rate is stable at more than 98%, and the average delivery time is less than 30 minutes.
Tech Planet learned that in April this year, KeeTa held a rider exchange meeting, which was divided into two versions: Chinese and English. According to the report of the "21st Century Economic News", KeeTa operators have revealed that the average online time of riders has declined, and some riders reported at this meeting that the current delivery time has been shortened a lot compared with the early stage of operation, while the order remuneration of other food delivery platforms has risen.
A rider who attended the conference told Tech Planet that the conference mainly hopes to optimize some product and process design through rider feedback, such as judgment and dispatch distance.
In the mainland, Meituan is the absolute No. 1 in the food delivery industry, no matter which indicator it looks at. The rider told Tech Planet that because KeeTa has not yet achieved absolute first place in Hong Kong, blindly copying the domestic style of play may not work well.
An "infantry rider" delivery man said that in the Hong Kong market, the other two food delivery platforms, Foodpanda, Delivery, and Keeta, still have their own advantages. For example, Foodpanda is more friendly to full-time riders, who can choose the delivery time of their meals first. In addition to takeaway, there are also department stores, and the categories are more complete.
In other words, although Meituan has made a breakthrough in the Hong Kong market, it still needs to work hard if it wants to replicate the situation in the Chinese mainland market.
Riyadh, where competition is more intense
At the beginning of KeeTa's listing in Hong Kong, an employee told Tech Planet that Hong Kong was just testing the waters, knowing the whole link, and the goal was to go abroad.
Unlike e-commerce going overseas, Tiktok and Temu either chose Southeast Asia or Europe and the United States for their first stop, but KeeTa chose Saudi Arabia in the Middle East, and its first stop was Riyadh, the capital of the country.
A partner of a Chinese-funded institution told Tech Planet that Saudi Arabia's population base is higher than that of the United Arab Emirates, with a population of 35 million, with 60%-70% of the local population, which is relatively wealthy. Although the living environment is not comfortable, they are no strangers to the takeaway business, most of them order food as a family unit, and the minimum delivery fee for an order is as high as 15 Saudi riyals, nearly 30 yuan.
Saudi Arabia's food delivery market is not a blue ocean to be explored, but a red ocean of fierce competition. The Middle East, which first established Talabat, a food delivery company in 2004, will face three main competitors when it enters Saudi Arabia: Jahez, a local food delivery platform founded in 2016, Hunger Station, a Saudi subsidiary of KeeTa's old rival and German food delivery giant Deliver Hero, and Uber Eats from the United States.
In addition, the rivals also include more than a dozen platforms that provide delivery services, such as the aggregation platform Wssel. According to Tech Planet, in June this year, Wukong Takeaway, another food delivery platform in Southeast Asia, has also entered Saudi Arabia.
But there is still considerable room for growth in the market. Statista estimates that the total revenue of the food delivery market in Saudi Arabia is expected to reach $11.74 billion in 2024, and the user penetration rate of the food delivery market will reach 44.2%, compared to 54.5% in China, the world's largest food delivery market. The starting price is 100 Saudi riyals, nearly 200 yuan.
It will not be easy for Meituan to continue the myth of Hong Kong in Saudi Arabia. Tech Planet has learned that the first restaurant KeeTa signed a contract with in Saudi Arabia is a Chinese restaurant specializing in Hunan cuisine. Restaurant officials said that KeeTa employees had been eating in the store for more than a month, and the two sides quickly reached an agreement because they wanted to test the waters of takeout.
A person close to KeeTa's core team in Saudi Arabia told Tech Planet that most of the local contracts signed by Meituan Saudi Arabia are Chinese restaurants, but Meituan still wants to be a full-category food delivery platform.
The core competitiveness of food delivery platforms is BD and fulfillment.
Meituan is a company with strong local promotion capabilities, but this kind of promotion ability cannot be released in Saudi Arabia in a short period of time, because local expansion requires a lot of talents who understand Arabic.
In addition, Saudi Arabia's online payment system is not mature, and many orders are paid on delivery, which greatly affects the efficiency of delivery. During Ramadan, Muslims are not allowed to eat or drink from sunrise to sunset, which can also lead to a significant reduction in capacity.
In terms of delivery teams, outsourcing is the most suitable if you want to start your business quickly. An entrepreneur who used to do delivery business in Saudi Arabia told Tech Planet that most of the delivery staff in Saudi Arabia are mainly Pakistanis and Indians, and Saudi Arabia requires work visa requirements, and the company handles it itself, which is costly and complicated, and it is easier to use third-party delivery services. If you build your own distribution team, you also need to consider the "desertification rate", the ratio of Saudi natives and others is 1:2, and the cost will be relatively higher considering welfare factors.
Meituan's attempt to improve delivery efficiency through algorithms in Saudi Arabia is not feasible in a short period of time. The above-mentioned entrepreneurs said that the local postal address is not perfect, the accuracy of the map is not as good as that of the domestic Gaode and Baidu, and it cannot be accurate to the floor. This means that Meituan needs to complete the infrastructure first if it wants to improve the efficiency of delivery.
Due to the high temperatures and the rampant sandstorms, most delivery workers in Riyadh use motorcycles and cars to deliver food. If the policy allows, Meituan's use of drones to deliver food delivery is a possibility of a massive increase in efficiency.
However, many interviewees have great expectations for Meituan to go overseas to Saudi Arabia, and their logic is that success can be replicated, and Meituan is a master of war. "Chinese companies can win anywhere," said one Middle Eastern entrepreneur interviewed.
The last major Internet factory went overseas, and Meituan was not in a hurry
Among the Internet companies that grew up during the same period, Meituan was almost the last to go overseas.
Compared with Pinduoduo's Temu, which has landed in more than 40 countries and regions in a year, Meituan Takeaway is very cautious about going overseas. Of course, the difficulty of landing e-commerce and local life is completely different, the latter is an industry that is hard enough and the barriers are high enough, and the profitability of local life enterprises at home and abroad is not good.
Compared to TikTok, it is more complicated. Content ecosystem companies have a strong network effect, and the accumulated experience can flow across countries. But local companies need to re-polish their teams in every country, and there is almost no network effect on the whole world, and the team in Hong Kong cannot be translated to Riyadh, and the experience of Riyadh cannot be replicated in New York.
Many domestic companies, including Xiaohongshu, Tencent, Kuaishou, Douyin, and JD.com, have launched takeaway services, which seem to have a low threshold, but in fact, it is not easy to do a good job, and the number of merchants, fulfillment capabilities, and distribution efficiency cannot have a shortcoming. For example, Meituan's map needs to be accurate to every building in the community and estimate the time, while the delivery system of the e-commerce platform only needs to be accurate to the core site.
In other words, Meituan is certainly not the easiest business model for China to go overseas, and it may even be the hardest. For example, there is a food delivery platform in Saudi Arabia, because of the severe reduction in capacity during Ramadan, which led to a serious decline in orders and eventually collapsed.
For Meituan, going overseas is a business that requires "long-term patience". Before deciding to go to Saudi Arabia, Meituan had visited it two years ago. As early as 2016, Wang Xing went to Silicon Valley, Berlin, Israel, Jakarta and other places to investigate.
Wang Xing also said that global expansion will be a very important direction for long-term growth, but from a financial point of view, Meituan will move forward with global expansion at a very cautious pace.
Compared with building a self-built team from 0 to 1, acquiring a suitable overseas platform may be a faster choice. However, according to Photon Planet, KeeTa expressed its intention to acquire a leading food delivery platform in Saudi Arabia, and the other party was very enthusiastic about the company's business and the local market. When the offer of 1 billion yuan was obtained, KeeTa stopped contacting.
This means that Meituan only starts from 0, and the pit that should be taken may not be omitted, and it is not necessarily a bad thing to be cautious at this time.