China's Meituan Expands in Middle East by Drawing on Domestic Trades, Adapting to Local Needs(Yicai) Nov. 21 -- Meituan, the largest on-demand delivery service provider in China, continues to grow in the Middle Eastern market by using its domestic market experience while adjusting to local conditions.
Meituan's core strategy for expanding its overseas food delivery platform Keeta focuses on a diverse selection of product offerings, reliable delivery services, and affordable delivery prices, an industry insider told Yicai. It implements unique operational strategies in each country and even in different cities to best meet actual local needs, the insider said.
Keeta has entered more than 20 cities in Saudi Arabia since launching in Al Khaji in September last year, while it started operations in Doha this August and in Kuwait and Dubai this September. In addition, it went live in Abu Dhabi late last month.
In addition, Meituan's accumulated experience and technological capabilities in the Chinese market provide strong support for Keeta's overseas operations, the person pointed out.
There are already several food delivery platforms operating near Dubai's core business district, the owner of a Chinese restaurant in the area told Yicai, adding that her shop joined Keeta after it launched local services, primarily because of its commission-free model.
"A food delivery platform we previously partnered with charged about 17 percent commission, which later increased to over 20 percent, while many other platforms have fees of around 30 percent," she pointed out.
Keeta's delivery speed is faster than that of other platforms, the owner of a local ramen shop said to Yicai. "On the platform's ordering interface, you can see the 'real-time updated rider location' as well as the 'on-time guarantee' feature that reflects the timely delivery of the order."
Meituan's influence on Keeta is evident, the first restaurant owner pointed out. Many Chinese residents in the area became users right away because Keeta is a unit of Meituan, with the coupons it distributed to users also stimulating their willingness to spend, which is similar to the promotional coupons offered by domestic platforms, she added.
However, due to the high commissions charged by other platforms, merchants often raise the prices of takeout, which has led to most local residents not ordering as frequently as those from China, a Chinese person living in the area told Yicai. "Ordering takeout for every meal becomes too expensive."
Meituan's core competitive advantage when expanding overseas lies in its technological system, which enhances collaboration between merchants, consumers, and delivery capabilities, enabling merchants, users, and delivery riders to match effectively, Huang Yuanpu, a scholar with extensive research on new models for Chinese firms going global, told Yicai.
Due to Dubai's hot climate, there are rarely any pedestrians on the streets even in the relatively mild month of November, representing a significant growth potential in the local delivery service market.
The United Arab Emirates' online food delivery market will likely top USD1.9 billion this year, with a market penetration rate of over 31 percent, according to data from Statista. By 2030, the market is expected to grow to almost USD2.5 billion.
Keeta ranked as the third-largest food delivery platform in Saudi Arabia as of March this year, with a 10 percent share of the country's market, according to a report released by consulting firm Redseer that month.
Editors: Tang Shihua, Martin Kadiev