China’s food delivery giant Meituan is hiring Arabic- and English-proficient talent for its likely entry into Riyadh, the capital of Saudi Arabia, as the company puts expansion beyond China on its agenda as domestic consumption falls.
Meituan is set to launch KeeTa, the food delivery brand which it launched in Hong Kong last year, in its first Middle East destination in the coming months, Bloomberg reported on Friday.
Why it matters: Meituan’s first expansion outside of China comes at a time when a string of Chinese companies have turned to overseas expansion amid uncertainty about the prospects of recreating the high growth situation that the tech sector has enjoyed at home for much of the past two decades.
- “I think it may take us another 10 years to make a significant impact in overseas markets, and we are not in a hurry to do that,” said chief executive Wang Xing last month. “We will be evaluating very carefully the opportunities for that and the ways to get into the market,” he added.
Details: CEO Wang took direct control of the Beijing-based company’s global business in a February overhaul. He told investors on a fourth-quarter earnings call that Meituan is “very actively evaluating opportunities in other markets” after its Hong Kong entry saw “positive results.”
- Meituan executives, including Wang and Head of Strategic Overseas Investments Zhu Wenqian, visited Saudi Arabia for meetings with local government ministers and members of the Saudi royal family last May, according to a report by Chinese tech media outlet 36Kr, when they tried to assess whether the country was suitable for a food delivery pilot scheme.
- Meituan expects to compete directly with well-established platforms such as Delivery Hero, Deliveroo, and Jahez in the Middle Eastern country, where the online food delivery market is projected to grow at 5.62% annually, data from Statista shows.
- High subsidies from the company in order to provide customers with discounts have played a key role in Meituan’s initial success in Hong Kong under KeeTa since it landed in the region in May 2023. Last year, the platform captured a 21% market share by GMV in the territory, rapidly eating into rivals’ shares.
Context: After recording its lowest stock price in a year in February, at slightly over HK$60, Meituan’s shares are slowly recovering. The company’s stock price is still just a quarter of its value at its peak in mid-2021 however.
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