us media: ordering chinese spicy chicken is not a problem in saudi arabia
2024-09-25
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bloomberg article on september 24, original title: is there chinese takeout in saudi arabia? yes "going global" is one of the priorities that chinese big companies are considering. under pressure from falling profit margins at home, chinese companies are expanding their businesses overseas. the latest venture comes from food delivery giant meituan, which has started operations in the central saudi city of al kharj and will later start operations in the saudi capital riyadh. this is meituan's first foray into markets outside greater china.
like meituan, more and more companies see a bright future in the gulf kingdom. in recent months, chinese companies have won huge contracts to build photovoltaic power plants and mixed-use development projects in saudi arabia. after receiving a $2 billion investment from a saudi company, computer manufacturer lenovo is building a regional headquarters in saudi arabia, and the deal is expected to create 15,000 jobs locally. cathay pacific will launch a new direct flight to riyadh in late october, which has pleased saudi officials who have been promoting the emerging tourism industry.
still, it’s curious for a consumer tech brand to consider saudi arabia as a top destination for its international expansion. why would meituan enter a market with a population of only about 36 million? perhaps meituan was attracted by the investment thesis that saudi arabia is “like china 20 years ago” and that the saudi vision 2030 outlined by crown prince and prime minister mohammed bin salman will bring about effects similar to china’s reform and opening up.
saudi arabia’s demographics, for example, are well suited for food delivery apps. with more saudi women working, and their labor force participation rate rising from 20% in 2017 to about a third today, saudi families may have more disposable income but less time to cook. in addition, a more tolerant society and a younger population will almost certainly translate into a desire for foreign cuisine. some international chains have opened in riyadh, such as tang tea house, a british dim sum teahouse, and zuma, a japanese restaurant. on keeta, meituan’s overseas version of the food delivery app, users can order chinese spicy chicken for 37 saudi riyals (1 saudi riyal is about 1.9 yuan).
there is no doubt that the saudi market will bring new challenges to meituan. the unbearable heat in saudi arabia and regulations that incentivize locals to replace non-native labor are just a few examples. interestingly, the entry of chinese companies into saudi arabia is both optimistic and nostalgic. many of us grew up in china in the 1990s and still remember the excitement when kfc and hollywood blockbusters entered china at that time. therefore, chinese corporate executives are easily convinced by the new investment thesis about saudi arabia. (author shuli ren, translated by wang huicong)
