Meituan ‘set for expansion into city’
Beijing firm to take on Foodpanda and Deliveroo in global push, source says
Meituan is expanding its food delivery business to Hong Kong to take on the local duopoly of Foodpanda and Deliveroo, as part of a global push by the ondemand services giant to offset a slowdown in consumer spending at home.
Meituan already provides lists of recommended restaurants and retailers in Hong Kong for mainland users of its app, but it has now begun recruiting people in the city to roll out its delivery service, according to a person familiar with the situation, who asked to remain anonymous as the information is not public yet.
The development was first reported by mainland media outlet LatePost over the weekend. Meituan did not respond to a request yesterday for comment.
Hong Kong’s food delivery market is currently dominated by Foodpanda and Deliveroo, which had shares of 64 per cent and 36 per cent, respectively, in the first half, according to data from Hong Kong-based market researcher Measurable AI. Data service Statista estimates the value of the city’s food delivery market will reach US$620 million this year.
Meituan may find the Hong Kong delivery market a tough nut to crack though, with Uber retreating from food delivery services in the city last year. Meituan previously toyed with entering Hong Kong as early as 2018 but suspended the plan after a study revealed a host of operational challenges, including the government’s tighter restrictions on the use of scooters, commonly used on the mainland, for similar delivery purposes in the city.
Hong Kong and the mainland also have different labour laws. Foodpanda delivery workers, for instance, staged a strike at the end of 2021 and negotiated a deal with the company. On the mainland, strikes by gig-economy workers are often not tolerated by the authorities.
Meituan’s Hong Kong and global push comes at a time when a flurry of mainland tech giants are turning overseas for growth amid economic headwinds at home and the impact of the strict Covid-19 lockdowns.
The tech sector is also emerging from months of tightened regulatory scrutiny and a push by Beijing to rein in the “disorderly expansion of capital”.
For example, Tencent Holdings and NetEase, two of the country’s largest gaming giants, have made a series of acquisitions worldwide in recent months.
Beijing-headquartered Meituan had tapped Tony Qiu, a veteran who has led global expansion moves at Didi and Kuaishou Technology previously, to helm its international efforts, LatePost reported.