The latest milestone achieved by KeeTa reflects how Meituan's first foray outside mainland China began to pay off last year as local consumption recovered in the domestic market amid increased competition. It shows.KeeTa delivery drivers will be promoting the Meituan-owned food delivery platform on the streets of Mongkok during the local launch of the app on May 22, 2023. Photo: SCMP
However, KeeTa still lags behind incumbent Foodpanda in delivery order value in Hong Kong over the past quarter, according to Measurable AI.
Foodpanda, owned by Berlin-based Delivery Hero, accounted for 47 percent of the Hong Kong market by gross order value for pickup and delivery in the first quarter, while Keeta accounted for 27 percent in the same period.
Meituan's Hong Kong-listed shares closed 3.99% lower at HK$115.50 on Tuesday.
Wang Xing, co-founder, chairman and CEO of Meituan, speaks during a panel discussion at the Bloomberg New Economy Forum in Beijing on November 22, 2019. Photo: Bloomberg In February, Meituan co-founder, chairman and chief executive officer Wang Xing said: As part of organizational reform, he will take over management of the company's overseas operations.
Wang said in a recent earnings call with investors that Meituan is “very actively evaluating opportunities in other markets” after seeing “positive results” in Hong Kong.
Meituan's expansion into Riyadh will put KeeTa up against local rivals such as Jahez International, Deliver Hero's Talabat and HungerStation, and Uber Technologies-backed Careem. The move comes as Saudi Arabia, already the region's largest economy, plans to invest trillions of dollars to become a tourism and commercial hub.The next destination for Meituan's KeeTa food delivery platform is Riyadh, the capital of Saudi Arabia and one of the wealthiest cities in the Middle East.Photo: Keeta
However, given the long-term uncertainty, the company's market position in Saudi Arabia, and the potential for short-term losses from this international expansion, this expansion would add “significantly” to Meituan's current valuation. Kai Wang, a senior equity analyst at Morningstar, predicts that there will be no significant increase. I wrote in my research notes on April 26th.
Wang said exclusivity agreements that prevent some restaurants from partnering with other delivery platforms helped Meituan “capture the lion's share” of mainland China's food delivery market. . Such practices are now prohibited by China's antitrust laws, further squeezing the profits of Meituan's food delivery business, Morningstar analysts said.
Wang said Meituan would likely operate in Riyadh in a “laggard position”. “We believe it will be difficult for Meituan to unseat incumbents who are already familiar with the market, and that incentive-driven strategies will not last until cash burn stops vouchers.”