KeeTa, however, still lagged incumbent Foodpanda by value of delivery orders in Hong Kong the past quarter, according to Measurable AI.
Foodpanda, owned by Berlin-based Delivery Hero, commanded 47 per cent of Hong Kong’s market by gross merchandise value of all pickup and delivery orders in the first quarter, while KeeTa accounted for 27 per cent in the same period.
In a statement released on Wednesday, Foodpanda said that it “places greater emphasis on the long-term and sustainable growth of the industry over short-term promotional strategies”. The company touted that it currently has “the most extensive restaurant network, partnering with over 14,000 establishments to offer food delivery and pickup services”.
Meituan’s Hong Kong-listed shares on Wednesday closed 1.73 per cent lower to HK$113.50.
Meituan is “very actively evaluating opportunities in other markets” after seeing “positive results” in Hong Kong, Wang said in a recent company earnings call with investors.
That expansion, however, is not expected to be “materially incremental” to Meituan’s current valuation because of long-term uncertainty, the firm’s market positioning in Saudi Arabia and the near-term losses this overseas foray might incur, Morningstar senior equity analyst Kai Wang wrote in a research note on April 26.
What helped Meituan “attain the lion’s share” of mainland China’s food-delivery market was exclusive contracts that prevented some restaurants from onboarding with other delivery platforms, according to Wang. That practice has now been prohibited by China’s anti-monopoly rules, which puts more pressure on the margins of Meituan’s food-delivery operation, the Morningstar analyst said.
Meituan is likely to operate from “a laggard position” in Riyadh, according to Wang. “We believe it will be difficult for Meituan to unseat incumbents already familiar with the market and that an incentive-driven strategy will be short-lived until the vouchers stop due to cash burn.”