Recently, according to sources close to Meituan, Meituan is still examining the Middle East market, or paying more attention to the Saudi Arabia region.
From October 2022 to mid-2023, Zhu Wenqian, head of the overseas department of Meituan's strategic investment, visited the Middle East several times to understand the local business policy and investigate the current situation of competition in the local takeaway business. During the period of Wang Xing, Wang Putzhong, a number of core executives also visited the Middle East, Meituan has also tried to set up a Middle East team to consider the first pilot city in Riyadh, but then the project was shelved.
Now, Meituan is once again exploring the Middle East market, with both opportunities and challenges. The high ARPU (average revenue per paid user) user density makes the Middle East takeaway market quite attractive. According to Statista's estimates, the total revenue of the Saudi takeout market is expected to reach $11.74 billion in 2024, and the user penetration rate of the takeout market will reach 44.2%, while the average revenue per user of the Saudi grocery delivery market is $627.00. The economic diversification and transformation of countries such as Saudi Arabia has also provided an opportunity for the explosion of local life circuits such as takeaways. In terms of digital infrastructure, the Internet penetration rate of Saudi Arabia and the United Arab Emirates, two of the most dynamic economies in the Gulf countries, is more than 99%, and the epidemic has sharply accelerated the online migration of daily consumption and lifestyle in the Middle East. At the same time, doing takeaways in the Middle East also faces some problems. For example, the COD (cash on delivery) ratio is extremely high, the complex demographic structure and expensive labor costs, the need to pay attention to the Islamic halal dietary precepts, Ramadan and other traditional customs, and even the local climatic conditions will have an impact on the fulfillment and execution of takeaway delivery.
Meituan's globalization layout has been very cautious in recent years, and except for the early launch of its overseas accommodation business, all other moves have basically unfolded with investment rather than in person. Until May 2023, Meituan's takeout platform KeeTa was launched in Hong Kong, taking the first step in Meituan's takeout overseas. According to data platform Measurable AI, KeeTa went from a market share of less than 5% in its first three months of operation to complete full coverage of Hong Kong in 200 days and took a 37% market share. However, because of the high delivery fee, slow delivery speed, coupled with well-developed offline restaurants, Hong Kong users are not very willing to use takeout. Meanwhile, KeeTa is facing competition from strong local rivals Deliveroo and Foodpanda. In terms of long-term development, the development of Meituan's takeaway business in Hong Kong still has to face a lot of resistance.
Wang Xing, founder of Meituan, has said, "Globalization is important and must be done, but it is not something to be rushed, and it requires longer patience, greater investment, and better synergy." In its long-awaited Middle East, Meituan is expected to become a new increment in Meituan's development if it can really land.