Meituan launches in Saudi Arabia, where next?

After months of preparations, Meituan’s subsidiary Keeta officially went live in Saudi Arabia yesterday (9 Sept 2024).

Some thoughts: 

1. We have analysed Meituan’s entry into Saudi Arabia, and how likely it will succeed in unseating the current “duopoly” of Jahez and DeliveryHero’s Hunger Station in April. Essentially, Meituan is much stronger in all operational aspects compared to its local competitors. The biggest major challenge it might face is: Will locally-hired managers work well with the strong Chinese-speaking core?
   
2. Many other Chinese tech companies failed in global expansion not because of their products or expertise, but leadership, people, and organisation, as we have documented in the book Seeing the Unseen: behind Chinese tech giants’ global venturing. We are sure that Meituan has taken in the lessons, which also translated into how they pick the sequence of markets (starting with those with higher likelihood of winning); 
3. Will Meituan enter other markets? For sure, overseas expansion has become a key focus of Meituan. On 23 August, Meituan announced that its overseas business is officially named Keeta, with its head, Tong Qiu, reporting directly to founder Wang Xing. In an earlier episode of the Impulso Podcast by Momentum Works, we also talked about the implications of Wang Xing taking charge of global expansion. 
4. The market Meituan will consider next, after Saudi Arabia, is probably one with good spending power, favourable demand-supply dynamics, relatively friendly regulatory framework, and weak competition.
   
5. How should competitors fend off Meituan’s assault? They have to start by first and foremost understanding what is the core strength of Meituan – e.g. separate the tactics you see on the surface from the organisational/leadership capabilities of Meituan. Alas, in our discussions with food delivery players across the world, we find that many are still focusing too much on studying Meituan’s tactics.

As for the F&B merchants in those countries, embrace what platform competition and operational efficiency will bring you. You might need to become more efficient as well, because the platforms will amplify the gap between competitiveness of F&B brands.