Beijing's Meituan Launches Food Delivery Service in Saudi Arabia

Beijing's Meituan Expands into Saudi Arabia

Chinese on-demand food delivery platform Meituan has expanded its international service Keeta to Saudi Arabia, as the company searches for growth opportunities abroad amid a softening economy and heightened competition at home. Beijing-based Meituan on Monday introduced its food ordering and delivery service in Al-Kharj, a central city in the Gulf nation, according to an in-app announcement.

Attracting New Customers

To attract new customers and gain a foothold in the market, Keeta is offering free delivery for orders that reach 25 riyals (US$6.66), as well as nearly 70 per cent off discounts on select combo meals. Delivery time is usually within 30 minutes. Customers can also pick up their meals from restaurants, the app shows.

Competition and Market Potential

Meituan's foray into Saudi Arabia, the largest economy in the Middle East after Turkey, follows Keeta's successful debut in Hong Kong – the beachhead of Meituan's push outside mainland China. After launching in the city in May last year, Keeta quickly surpassed London-based Deliveroo and Berlin-based Foodpanda in order numbers to lead with a 43 per cent market share in the first quarter of this year, according to data from local analytics firm Measurable AI.

However, Keeta still lagged Foodpanda by order value. In Saudi Arabia, Meituan faces stiff competition from local players, including Jahez, Talabat, and Foodpanda's sibling Hungerstation. The country's online food delivery market is expected to reach US$11.74 billion this year and grow at an annual rate of 5.2 per cent to reach US$15.13 billion by 2029, according to data provider Statista.

Looking Ahead

While Meituan is still in the early stages of its overseas expansion, it will continue to evaluate opportunities in different regions, founder and CEO Wang Xing told analysts in a post-earnings call last month. He added that “the overseas market is the right long-term strategy for Meituan”. Meituan posted a 21 per cent jump in revenue to 82 billion yuan for the second quarter, bolstered by steady growth in its local commerce operations for food and grocery deliveries despite competition from rivals including Alibaba Group Holding's Ele.me and ByteDance's Douyin. Alibaba owns the South China Morning Post.