In August this year, Meituan released its earnings report for the second quarter and the first half of 2024, posting revenue of RMB 155.53 billion, a year-on-year increase of 22.9%. Operating profit reached RMB 16.46 billion, up 98.4% year-on-year.
This suggests that despite facing competition from internet giants like Douyin (TikTok China), Kuaishou, and Pinduoduo entering the local services space, and the new "live streaming, short video, community" + "local services" business model reshaping the competitive landscape, Meituan has managed to endure by reducing costs, improving efficiency domestically, exploring new businesses, and investing heavily in marketing.
Similarly, during the second quarter earnings call in August, Meituan CEO Wang Xing highlighted the company’s international expansion efforts. As the leader who strengthened Meituan’s dominance in local commerce, Wang Xing is personally overseeing the company’s overseas ventures, viewing the international market as Meituan's "correct long-term strategy."
Just days later, on September 9 local time, Meituan’s overseas food delivery platform Keeta officially launched in the central Saudi Arabian city of Al-Kharj.
Meituan has finally gone global.
Exploring a New Path: Entering the Middle Eastern Food Delivery Market
Before officially entering the overseas market, Meituan had already tested the waters in Hong Kong, achieving impressive results. In May 2023, Meituan launched its new food delivery brand, KeeTa, in Hong Kong. After a year of operation, KeeTa reached a 44% market share in the first quarter of this year, surpassing FoodPanda and Deliveroo to become the leading food delivery platform in Hong Kong.
Meituan’s core business primarily focuses on local commerce. The development of the local services sector in China started with a battle for traffic, gradually expanding into more categories and evolving into a “proximity economy” that offers immediate needs, purchases, deliveries, and enjoyment. Globally, China’s local services sector has long been a trendsetter. UberEats once sent a team to learn from Meituan’s business model, and EqualOcean facilitated a visit for Latin American unicorn iFood to observe top Chinese companies. Meituan’s model of "people searching for stores" and its emphasis on strong offline promotion have also been adopted by many food delivery companies worldwide.
Although Meituan has been slow to expand internationally compared to other major Chinese tech giants, it has adopted a calculated approach to the "going global equals new growth" game. Leveraging the Hong Kong government’s support for building an overseas platform hub, as well as Hong Kong’s international market characteristics, Meituan chose Hong Kong as the starting point for its global strategy. In the post-pandemic era, Meituan capitalized on the rising demand for food delivery in Hong Kong, employing the familiar strategy of high subsidies to acquire users—proven effective in capturing market share and validating its new market approach.
The second step: officially transitioning from Hong Kong to the global stage, with the Middle East becoming Meituan's first stop in its international expansion.
Meituan has identified a unique opportunity in the Middle East within the context of global competition. In the food delivery and fresh e-commerce sectors, North America is dominated by DoorDash and UberEats, Europe is home to UberEats and Deliveroo, and Southeast Asia features Grab’s GrabFood and Indonesia's Gofood, part of Gojek. In general, as local services sectors mature and evolve, it is common for a few major players—or even just one—to dominate the market. In the U.S. food delivery and fresh e-commerce sectors, for instance, the top two companies control nearly 90% of the market. According to 2023 data from Statista, DoorDash, founded by three Chinese entrepreneurs, holds about 65% of the U.S. market, with UberEats following at 23%. In contrast, the Middle East market has yet to see the emergence of a dominant "super app," with fewer global players and a greater number of local competitors.
The Saudi Arabian food delivery market is showing robust growth potential. Since Crown Prince and Prime Minister Mohammed bin Salman came to power, the country has become more open to modern lifestyles. Under the “Vision 2030” plan, Saudi Arabia has been investing heavily in its digital economy and infrastructure, with rapid development in industries such as e-commerce and mobile payments. According to the Communications and Information Technology Commission of Saudi Arabia, the number of food delivery apps operating in the country has increased by over 460% in the past two years. In 2023, Saudi Arabia’s food delivery market generated $10 billion in revenue, with an expected growth rate of over 18% in the next two years, reaching $14.8 billion by 2028. Additionally, about 45% of the Saudi population is under the age of 30, and this younger demographic has strong demand for improving their quality of life and driving economic diversification. Northern and central Saudi Arabia account for over 75% of the country’s food delivery market, with major cities such as Riyadh, Jeddah, and Dammam being densely populated and characterized by high urbanization, higher per capita income, and widespread internet access.
Can Meituan Continue Its Winning Strategy in the Middle East?
Saudi Arabia’s domestic food delivery market is dominated by key players like "Hungerstation," "Jahez," and "Marsool," which together control 85% of the market. Other competitors include UberEats, Talabat, Lugmety, and Carriage. Before Meituan’s entry, there were almost no food delivery platforms with Chinese origins in Saudi Arabia. While Chinese-run supermarket chain WEMART, which has a presence in the UAE, offers food delivery services, it only recently began building physical stores in Riyadh, with few significant developments thus far.
After multiple rounds of on-site research, Meituan decided against entering the market through mergers and acquisitions, opting instead to replicate its domestic internet platform strategy. This involves providing high subsidies early on to establish a clear price advantage, attract user conversions, and capture market share. Keeta, Meituan’s overseas brand, has introduced several discount policies tailored to the Saudi market. On its launch day, Keeta offered 50% off coupons, waived delivery fees for orders over 25 riyals (approximately USD 7) and launched discounted meal sets priced at 15 riyals (about USD 4). Additionally, Keeta has shortened delivery times from the local average of one hour to within 30 minutes to enhance customer experience.
Unlike traditional Chinese-run delivery platforms, Keeta’s target audience is not limited to the "Chinese first, then non-Chinese" model. The platform offers localized visual, language, and payment services designed for all local users in Saudi Arabia. Following a period of local promotion, Keeta has already onboarded around 500 merchants, including Saudi Arabian chains like Kudu, as well as global brands like Starbucks and Burger King. The available food categories align with local tastes, including kebabs, bean soup, and rice dishes.
Optimistically, Meituan’s strengths in algorithms, its mature operational experience, and its proven offline promotional methods could deliver a "disruptive blow" to local delivery brands. By the end of this year, Meituan is expected to continue its marketing strategy in Al-Kharj and gradually expand into new cities, with Riyadh, Saudi Arabia’s largest city, expected to see Keeta’s launch in October.
However, the difficulty of international expansion lies not in replicating domestic success but in achieving deep localization. Meituan faces significant challenges in adapting to the local market. In the long term, compared to the "big three" in the Saudi market, Meituan’s localization operating costs—after burning cash with subsidies—will put substantial pressure on its cash flow. Among the six Gulf Cooperation Council (GCC) countries, Saudi Arabia has higher entry barriers, and Chinese companies expanding there largely rely on joint ventures with local entities and managing relationships at the top. Furthermore, due to the significant differences in social and cultural customs, food sold on Keeta must be clearly labeled and verified as halal, with partner restaurants required to pass Halal certification. Keeta also faces substantial food safety compliance risks, and the team must navigate special local marketing strategies, supply chain management, and nighttime staffing needs during Ramadan, adding extra costs.
From a staffing perspective, Keeta’s team is still primarily composed of Chinese personnel, supplemented by local talent in language, marketing, and supply chain roles. However, talent with overseas experience and proficiency in Arabic is scarce, and as the team expands, this may lead to gaps in talent. Additionally, the majority of food delivery workers in Saudi Arabia are foreign nationals, primarily from South and Southeast Asia, which poses language and cultural adaptation challenges for management. As delivery orders increase, ensuring sufficient manpower during peak times will require filling staffing shortages in a timely manner, further increasing labor recruitment and management costs.
Overall, Meituan’s decision to enter the Middle East is a bold move that capitalizes on favorable timing and trends. In an ideal scenario, Keeta may be able to replicate its success in Hong Kong within the Saudi market. However, as the first major delivery giant to enter Saudi Arabia, Meituan is likely to face the risks and growing pains of navigating this unique global market. All eyes are on Keeta’s future performance in the Middle East.