Last week, Bloomberg reported that Meituan is in talks to acquire Foodpanda from Germany-based DeliveryHero. 

This news came after German media reports that DeliveryHero and Grab were discussing the latter’s acquisition of Foodpanda’s Southeast Asian business for €1 billion. In Between there was also the saga of Foodpanda Asia Pacific CEO being dismissed for leaking confidential information about the deal to his girlfriend who posted it on social media.

Of course, since DeliveryHero decided to divest its Southeast Asian business, it would have contacted multiple potential buyers – there aren’t many of them out there. So, of course they would have contacted Meituan. 

Should Meituan buy Foodpanda’s Southeast Asian business (perhaps bundling it with the Hong Kong operations)? We’ve listed some arguments arguments here:

Why Meituan should acquire Foodpanda:

  • If Meituan’s goal is to enter the Southeast Asian market, acquiring an existing network of merchants, delivery riders, and customers in major countries would be much less risky than starting from scratch;
  • A Meituan acquisition would probably not face regulatory/anti-competition issues;
  • Integrating Foodpanda might be easier than expected – Foodpanda does not have a strong culture of its own. Alibaba took a while to integrate Lazada, while Grab’s integration of Uber was quite straightforward; 
  • Foodpanda doesn’t operate in the challenging markets of Indonesia and Vietnam. Thailand, Malaysia and Singapore are relatively affluent markets in the region with good consumption power. The acquirer could shut down operations in the less promising markets of Laos, Cambodia and Myanmar; 
  • (something personal) Many Chinese investors, entrepreneurs and executives in Southeast Asia often miss the convenience of local delivery services in China. “Help us improve our lives,” said a seasoned investor now based in Singapore.

Why Meituan should NOT acquire Foodpanda:

  • Is it worth entering the Southeast Asian market for food delivery and local services? Are the market size and prospects justifiable for Meituan to allocate resources and management focus at this stage?
  • Is Meituan’s leadership determined enough for long-term operations and overcoming various obstacles along the way? The market reality might be very different from expectations, and key decisions often need to be made with incomplete information;
  • Can Meituan effectively transfer its organisational capabilities to Southeast Asia? Previous expansion efforts by Alibaba, Tencent, Baidu, and have encountered many challenges. ByteDance and Pinduoduo have just entered the market, with TikTok ecommerce showing strong competitiveness. However, the recent ban in Indonesia highlights the need for significant localisation in areas other than product;
  • Are there sufficient competent people from internal and external sources to support this venture? When Alibaba acquired Lazada in 2016, there was a clear shortage of international talent, which was likely a major reason for retaining the original management for two years. The strong local nature of Meituan’s businesses poses an interesting challenge in blending domestic expertise and experience with local realities and teams.

These are some of the key success factors for overseas expansion we discussed in our book “Seeing the Unseen: Behind Chinese Tech Giants’ Global Venturing” (in order of importance): leadership, people, organisation, and product.

Of course, another option is to first acquire it, and then, without making major moves and keeping costs under control, observe and learn from the market. But this also depends on the mindset of the existing management.

Besides, there is the competition from Grab, the regional champion who is a potential bidder. 

Grab will likely adjust its negotiations with DeliveryHero accordingly now someone leaked the news of Meituan talks to the media. 

After selling Foodpanda Southeast Asia (and possibly Hong Kong) business, DeliveryHero’s Asian operations would be left with (promising) Taiwan, (inconsequential) Pakistan and Bangladesh, as well as (large and profitable) Korea businesses (Baemin). Baemin is known to contribute more than 70% of the GMV and all the profits for DeliveryHero Asia. 


Momentum Works is currently preparing the “Southeast Asia Food Delivery Platform 2024” report, to be released in January next year. 

Meanwhile, for more insights, you can also refer to the “Southeast Asia Food Delivery Platform 2023” report.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].