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"science and technology innovation board daily" september 10th (reporter xu cihao)there has been new progress in meituan’s overseas takeout business.

a reporter from the science and technology innovation board daily noticed that the overseas version of meituan takeout, keeta, was launched in al kharj, saudi arabia at 11 a.m. local time on the 9th (4 p.m. beijing time). the latter is located southeast of the saudi capital riyadh, only about 180 kilometers away from riyadh, and is an important agricultural center.

according to the reporter of "science and technology innovation board daily", keeta has not been launched in saudi arabia at the same time, but has selected some areas for pilot. in cities such as riyadh, users can only see the prompt "coming soon to your city", while in a few areas such as al kharj, although there are already merchants settled in, the number is about 500, and the discount ranges from 48% to 72%.

last month, meituan just completed the latest round of organizational structure adjustments, in which its overseas business was officially renamed keeta and was headed by qiu guangyu.

at present, meituan will try to enter more markets after the middle east. in the first quarter earnings conference call this year, meituan ceo wang xing revealed that they are studying various markets, the middle east is one of them, and also europe or southeast asia.

"pilot" in some areas of the middle east

in april this year, meituan began to publish information on the middle east recruitment platform bayt.com. keeta will open multiple recruitment positions in riyadh, the capital of saudi arabia. these positions involve business, marketing, riders, user operations and third-party partner management. on domestic recruitment websites, meituan is also looking for experts who are familiar with saudi arabia and proficient in arabic.

a reporter from the science and technology innovation board daily found on social media such as xiaohongshu that some chinese restaurant merchants in riyadh, the capital of saudi arabia, said they had been connected to meituan middle east's keeta system in june.

the reason why meituan chose the middle east, especially saudi arabia, as another test field for its overseas expansion is mainly because it saw the development potential of its food delivery market.

according to estimates by data platform statista, the total revenue of saudi arabia's food delivery market is expected to reach us$11.74 billion in 2024, with a user penetration rate of 44.2%. as the world's largest food delivery market, china's user penetration rate is expected to be 54.5%. this means that saudi arabia's food delivery market has basically completed market cultivation.

however, opportunities and challenges coexist. meituan has to face many competitors when it ventures into the middle east market, especially local companies.

it is reported that there are currently 8 large companies in saudi arabia's food delivery platform, and jahez occupies the largest market share. in january 2022, it was listed on the parallel market nomu of the saudi stock exchange with a market value of us$2.4 billion. in addition, jahez also acquired its rival the chefz for us$172 million in 2022.

in addition, internationally renowned food delivery platforms such as talabat, hungerstation, and delivery hero have also been deeply rooted in the middle east market for many years and have established a huge user base and a complete delivery network.

an internet analyst who declined to be named told the science and technology innovation board daily that choosing some regions for pilot projects instead of rolling them out across the board will help meituan better understand the specific conditions of the middle east market, including consumer demand, competitive environment, cultural differences, etc. this way of testing the waters can reduce market risks and avoid waste and loss of resources caused by full investment.

"the implementation of this localization strategy will not only help improve user experience, but also help enhance meituan's competitiveness in the middle east market," the analyst told the science and technology innovation board daily reporter.

going overseas is meituan’s long-term strategy

as early as the third quarter earnings conference in 2022, wang xing confirmed for the first time that he would develop overseas business and made it clear that the hong kong market would be the first stop for his overseas exploration.

in may 2023, meituan launched the food delivery platform keeta in hong kong, china. according to statistics from data service provider measurable ai, as of march 2024, keeta's market share of food delivery orders has jumped to 44%, surpassing deliveroo and foodpanda, two other food delivery platforms that have been operating in hong kong for about 10 years, becoming the food delivery platform with the largest order volume in the hong kong market.

such achievements have also doubled meituan’s confidence in expanding overseas.

in february this year, meituan further increased the priority of technology and internationalization-related businesses. wang xing announced in an internal letter that meituan’s overseas business would report directly to him.

during the first quarter earnings call for fiscal year 2024, regarding investors' concern about meituan's overseas progress, wang xing said, "we are evaluating and researching various markets around the world, and the middle east is one of them. we are also evaluating some other markets, including europe or southeast asian countries."

wang xing said that since other food delivery companies already exist in most countries, meituan needs to be very careful in evaluating the total market size, current food delivery service penetration rate, future penetration potential, as well as the competitive landscape, average order value and cost structure.

"global expansion will be a very important direction for meituan's long-term growth, but from a financial perspective, meituan will advance global expansion at a very cautious pace," said wang xing.

in the second quarter earnings conference call in august 2024, wang xing admitted that meituan's overseas expansion is still in a very early stage and will continue to evaluate opportunities in different regions. in addition, from a financial perspective, the budget for overseas business has been included in the new business segment. "overseas business is the right long-term strategy for meituan, so we will remain patient and continue to explore while maintaining financial discipline."