Chinese food-delivery giant Meituan to debut in Saudi Arabia’s capital Riyadh as international expansion quickens

The company’s foray into Riyadh will pit Meituan against local rivals including Jahez International Co, Delivery Hero’s Talabat and HungerStation and Uber Technologies-backed Careem. The move comes as Saudi Arabia, already the region’s biggest economy, devises plans to invest trillions of dollars to become a tourism and commercial hub.

The skyline of Riyadh, the capital and largest city of Saudi Arabia. Photo: Shutterstock

A Riyadh debut could mark a broader foray into a friendlier region that Chinese companies have warmed towards, as their home economy buckles.

Meituan’s Middle Eastern approach is likely to rely on a familiar subsidy-heavy strategy to draw in users and delivery workers at the outset. As with Hong Kong, the firm is likely to roll out its KeeTa platform in phases and target certain districts to begin with.

The company has already posted at least a dozen KeeTa job openings for Riyadh on LinkedIn and its own website, including for user acquisition and business development.

While Meituan has spent months devising a blueprint for entry, plans could still change and the company could decide to hit pause on any expansion. The company has explored other Middle Eastern markets in the meantime.

Representatives for Meituan did not respond to an email seeking comment.

A delivery rider of Meituan’s KeeTa platform is seen in Mong Kok on May 22, 2023. Photo: Elson Li

KeeTa – a nod to the fast-moving cheetah – was launched by Meituan last May and took just months to vault to the No 2 spot in Hong Kong, ahead of Deliveroo, according to independent research.

That move to Hong Kong was regarded as a trial run for a broader global expansion over the long run, as Meituan seeks growth at a time rivals like ByteDance’s Douyin are undercutting its margins.

“The slide in Meituan’s fourth-quarter core local-commerce margin, which fell below 15 per cent for the first time in seven quarters, could persist through December if the firm aims to lift revenue by more than 20 per cent year over year,” Bloomberg Intelligence analysts Catherine Lim and Trini Tan said in a note. “Rivalry could intensify, not just from Douyin but also Alibaba’s Ele.me, where a leadership change on March 31 may prompt new measures to gain delivery market share.”

The KeeTa app is shown at a streetside booth in Mong Kok to promote the launch of Meituan’s new local food-delivery platform on May 22, 2023. Photo: Elson Li

Meituan’s latest expansion comes after chief executive Wang Xing from February took direct control of the company’s overseas businesses, a decision that elevates the importance of its international ambitions.

Wang said during the company’s earnings call in March that Meituan was actively exploring international expansion, and that the firm’s cash reserves and cash flow from its domestic business would help it break into new markets.

Like its peers, Meituan has been looking outside its home turf for growth during China’s severe economic downturn, including at one point considering an acquisition of Delivery Hero’s business in Southeast Asia.

A growing number of Chinese tech firms have explored a deeper presence in the Middle East in particular, anticipating less political scrutiny compared to places like the United States and Europe. Apart from hit global short video app TikTok and e-commerce fashion platform Shein, Chinese-origin social apps like Yalla Group and Joyy’s Bigo Live have also built a strong following in the region.

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