Meituan Keeta has been launched in Riyadh for a week: Merchants are happy, and competitors are vigilant.

Text｜Ren Cairu

Editor｜Qiao Qian

As early as a CEO summit in 2017, Wang Xing talked about his judgment on the development trend of the Internet - in his speech "The Second Half of the Internet: Going High-tech, Digging Deep into Industries, and Globalizing", "Going High-tech" represents high technology, "Digging Deep into Industries" means not only staying at the C-end but going deeper into the industry, and "Globalizing" is what he calls "a very important and must-be-done" thing.

Now, this "must-be-done" has finally been truly implemented in Meituan.

A week ago, Meituan's overseas version "Keeta" officially launched in Riyadh, the capital of Saudi Arabia. Wang Xing himself appeared in the Riyadh office and gave an all-English speech to encourage and look forward to the team. Earlier, on September 9, Keeta quietly launched in Alkharj, Saudi Arabia.

The overseas business is the business that Wang Xing personally supervises. In an organizational adjustment email at the end of February, he said, "Drones and overseas businesses are reported to me", which was interpreted as "standing in front of the stage again". After the re-adjustment, the current overseas business of Meituan (which has been officially renamed "Keeta") is led by Qiu Guangyu and reported to Wang Xing.

According to multiple media reports, Qiu Guangyu, who is directly responsible for Keeta, has also moved from Hong Kong to Riyadh on a long-term basis. From his personal background, he studied at the University of Washington and New York University, and has also been responsible for overseas business in Didi and Kuaishou with good results and rich international experience.

On the day of the launch in Riyadh, many local Chinese users reported that Keeta has a more comprehensive range of merchants than imagined, classified by Chinese food, Japanese food, Indian food, Thai food, etc., not mainly Chinese food, and the after-sales experience is also relatively "smooth". An insider revealed that the policy of 50% off for the first order and free delivery fee is attractive enough, "directly overwhelming the delivery capacity."

Before the Middle East, Meituan's overseas business started in Hong Kong and has achieved the first market share in the number of orders. A secondary market analyst summarized to 36Kr that the current status of Meituan in these two places is "very Meituan" - making cautious choices, and once decided, making efforts to attack strongly.

Market Expectations and Rivals' Vigilance

"The emergence of a new platform must be a good thing," said Kerr, who runs a tea brand in Riyadh. The inconvenient use experience of the existing takeaway platforms and the difficulty in finding customer service are the common feelings of him and users.

Objectively, the takeaway market in Saudi Arabia is not a blue ocean, and some even describe it as a "red ocean". Talabat under the German takeaway giant, Deliveroo from the UK, the local Saudi platform HungerStation and Jahez, etc., have already formed a first-mover advantage.

In addition to competition, before entering the Middle East, Keeta was also preset with many specific challenges, the most important of which is localization.

It is widely believed that Hong Kong is Meituan's training ground for going overseas, but the Saudi market is quite different from Hong Kong. The needs for bilingual or even multilingual employees, the local strict labor policies, the extremely imperfect end communication addresses, religious taboos and the existence of Ramadan, etc., all need to be dealt with anew.

But to a certain extent, the final launch effect of Keeta proves that these problems have been solved.

Kerr told 36Kr that three months before Keeta launched in Riyadh, a salesman found him and made an invitation to settle in. The other party is an Egyptian who can communicate fluently in English and Arabic. In Kerr's view, Meituan's BD in Saudi Arabia will not be very difficult. "We communicate with our peers and all hope that a new platform can enter, and the delivery speed and after-sales service can be improved, which is a good thing for brands and merchants."

The local riders are mainly from South Asia such as India and Pakistan. They have no language problems, and the cost is low and they are capable. Alex, a cross-border e-commerce entrepreneur who has been in the Middle East for many years, emphasized to 36Kr that in the Middle East, the most important thing in recruiting people is to be "hardworking and enduring" - the extremely high temperature of 30 - 47°C, strong ultraviolet rays, and dry air are constantly testing physical fitness and willpower.

According to the information on the official website, Keeta is currently recruiting qualified riders in Saudi Arabia and is also actively seeking cooperation with third-party delivery companies to further build the rider team. Among them, Keeta's basic requirements for riders strictly follow the local employment policies, including continuously and effectively registered cars or motorcycles, work permits in the Kingdom of Saudi Arabia, and valid driver's licenses, etc.

Keeta's official website recruitment of riders and cooperation with third-party teams

According to Kerr's statistics, with the entry of new platforms such as Wukong Takeaway and Keeta into the Saudi market, the proportion of takeaway in his brand's revenue has recently increased from about 8% to 15%. This reflects the space for the local takeaway penetration rate to some extent.

On the other side of the expectations of users and merchants is the tension of the "defenders".

According to another merchant, the most famous local takeaway platform "HungerStation" is very vigilant about Keeta's movements, "like guarding against thieves. A few months ago, it began to require exclusive signing for some things."

Behind this vigilance is the precedent of Meituan's successful "disrupting" in Hong Kong.

Before Keeta entered, the takeaway market in Hong Kong was a duopoly, with Foodpanda and Deliveroo long occupying the top two market shares with absolute advantages.

After launching in Hong Kong, Keeta launched the "One-Person Dining Area", with a one-price package of 60 Hong Kong dollars, and many restaurants that settled in offered free delivery, precisely hitting two major pain points of Hong Kong people. Data from Measurable AI shows that Keeta's market share has been rising rapidly. After seven months, the order volume share surpassed the second place, and in the ninth month, it surpassed Foodpanda, which was the first place.

No one wants to have their cake shared. In July 2023, Deliveroo even replaced its person in charge in Hong Kong, and Foodpanda also launched a preferential activity in August, shouting the slogan of "Three Meals for 100 Hong Kong Dollars".

However, later, although Foodpanda's preferential activity advertisements covered the Hong Kong subway stations, the outcome still could not be reversed. As of the first quarter of 2024, Keeta occupies more than 44% of the market share in the Hong Kong market, surpassing Foodpanda (35%) and Deliveroo (21%), becoming the largest takeaway platform in Hong Kong.

Now the story seems to be repeating. After the news of Keeta's entry into Saudi Arabia, Delivery Hero's stock dropped by more than 9%.

The evolution of the Hong Kong takeaway market pattern in the past year (Source: Measurable AI)

Business Value or Strategic Value

There is a widespread voice in the investment circle that "Meituan's going overseas has greater strategic value than business value." An internal employee of Meituan also told 36Kr, "On the one hand, of course, we hope to seek some user increments, but overall, there are more non-financial considerations. In addition, the new market can also give more confidence to investors."

This proposition may not be concluded easily. In the past, the new businesses of Internet companies may have more strategic value implications, but in the current environment, profit itself is an extremely necessary pursuit. The shift of Meituan Preferred is an example. Regarding internationalization, Wang Xing also said, "We will carefully evaluate the return on investment and will not make crazy investment actions."

When entering Saudi Arabia, Keeta publicly stated that it will invest 266 million US dollars (about 1 billion riyals) to support its business growth in Saudi Arabia.

But for now, although Keeta is relatively generous in terms of delivery fees and full reduction, it is not a "money-throwing" investment.

As one of the first batch of merchants to settle in, Kerr told 36Kr that Keeta's subsidies in Saudi Arabia are jointly borne by the platform and merchants - "Like HungerStation, it is about a fixed commission rate of 15%, but currently, in addition to the commission, Keeta also requires merchants to share some event costs, and in fact, the pressure will be a bit greater."

In addition, the practical pursuit of internationalization may be a common point of a generation of outstanding Chinese entrepreneurs. A partner of a consumer investment institution once expressed his approval of Zhang Yiming to 36Kr, saying, "He started thinking about internationalization very early, and just from this point, it is very remarkable." Compared with TikTok, although Meituan is late in bringing its core business overseas, it also has a long-term preparation.

36Kr once reported that since 2022, Meituan's executives have visited the Middle East for field investigations many times. It is understood that the members of the special team of the group's compliance department for international business have been taking turns traveling between Saudi Arabia and the mainland until a local employee was recruited in September this year. According to "Photon Planet", Keeta also expressed its intention to acquire a local leading takeaway platform in the survey. The other party enthusiastically introduced the company's business and the local market situation, but after receiving a billion-level offer, the Keeta side stopped the contact.

Compared with Internet peers, the overseas expansion of the takeaway business is the heaviest model. It does local business and focuses on offline performance, and is therefore more affected by the local environment.

Alex, who does cross-border e-commerce in the Middle East, summarized to 36Kr that Meituan's decision to choose the Middle East is very correct, but there is a disadvantage in this region that "the agglomeration effect is not obvious. From Jeddah to Riyadh to Mecca, there are no contiguous towns in the middle." This will make the city expansion less coherent and can only be broken through in individual cities.

Alex is optimistic about Keeta. In addition to the company's combat effectiveness in being good at street fighting and point-by-point breakthroughs, the more important reason is that "there is too much room for optimization in various platform-based supplies in the Middle East market".

Alex once had the experience of not receiving the takeaway he ordered, having no way to get a refund and being unable to hold anyone accountable, which would not happen in China. He also believes that Chinese entrepreneurs are smart. One example is, "Living in the Middle East, you will find that even children now know to buy things on Temu."

This is in line with the logic that Meituan has always believed in, "Looking at demand in the short term and supply in the long term". Kerr told 36Kr that previously on the local takeaway platform, when it was occasionally necessary to modify the store's operating hours or logo, it was very difficult to find a contact person, "which is very desperate." Now, Keeta has also assigned a Chinese salesman to be responsible for connecting with his brand.

Taking this as an example, it is not yet known what ecological niche Keeta will occupy in the Middle East and Saudi Arabia in the end, but judging from its ability to reconstruct supply, it must be a catfish worthy of close attention from its rivals.

(At the request of the interviewees, Kerr and Alex are pseudonyms)