Meituan Launches Keeta in Saudi Arabia to Expand Online Food Delivery Market

Meituan Launches Keeta in Saudi Arabia: Key Insights

• Strategic Global Move: Meituan has extended its food delivery app, Keeta, to Saudi Arabia, a key milestone in its international expansion as it seeks growth beyond a challenging domestic market.

• Attractive Offers for Market Entry: To penetrate the Saudi market, Keeta is offering enticing incentives like free delivery and steep discounts, positioning itself to benefit from the country’s booming online food delivery sector, which is forecasted to reach US$15 billion by 2029.

• Facing Local Competition: While local players pose stiff competition, Meituan's track record in Hong Kong and its strong financial footing demonstrate its commitment to scaling Keeta globally.

Chinese on-demand food delivery platform Meituan has taken a significant step in its global expansion by introducing its food delivery app, Keeta, to Saudi Arabia. 

The app launched in Al-Kharj, with plans to expand to Riyadh, as the company looks to tap into the growing Middle Eastern food delivery market. This move comes as Meituan faces intensified competition and economic challenges in its home market.

Keeta's Entry in Saudi Arabia 

To attract new users in Saudi Arabia, Keeta is offering free delivery on orders over 25 riyals (US$6.66) and deep discounts of up to 70% on selected meals. The app promises delivery times of 30 minutes or less, and customers also have the option to pick up orders from restaurants. 

This presents a lucrative opportunity for Meituan, as the online food delivery market in Saudi Arabia is expected to reach US$11.7 billion this year:

• The market, which was valued at US$1.7 billion in 2018, exceeded US$4 billion by 2020, driven by the growth of the pandemic.

• Although the growth has been declining since then, the market reached US$10 billion last year.

• The online food delivery market in Saudi Arabia is expected to mature in the coming years, reaching a forecast of US$15 billion by 2029.

Meituan's Competition and Expansion Plans 

Meituan, however, faces strong competition from local players such as Jahez, Talabat, and Hungerstation. Meituan's previous success with Keeta in Hong Kong, where it quickly gained a 43% market share, provides optimism for its Saudi expansion. Meituan’s CEO, Wang Xing, emphasized that overseas expansion is a critical long-term strategy for the company.

Meituan’s move into Saudi Arabia follows strong financial performance, with the company reporting a 21% increase in revenue to 82 billion yuan (US$11.5 billion) in the second quarter of 2024. The company’s local commerce operations, including food and grocery deliveries, have continued to grow despite tough competition from Alibaba’s Ele.me and ByteDance’s Douyin. 

As Meituan tests the waters in Saudi Arabia, its success will likely depend on its ability to scale quickly and compete with established regional players.

Sources: South China Morning Post, Statista, ECDB