Recently, it was reported that mainland food delivery platform Meituan plans to expand its business, enter the international market of food delivery business, and first enter the Hong Kong market as a pilot before opening up overseas markets. At present, Hong Kong's takeaway market is shared by every household with Deliveroo and Foodpanda. As one of the largest takeaway platforms in the mainland, Meituan "entered" Hong Kong, it will inevitably have a fierce "fight" with local platforms.
It is said that the recruitment of staff in Hong Kong has begun. Meituan is drawing personnel from various departments to support international business, and the relevant business is currently in the research stage.
Picture | Search engine screenshot
The rumor that Meituan will enter Hong Kong is not groundless. This is closely related to Meituan’s next business development plan.
#1
Meituan "entered" Hong Kong to get a share of the pie
Ten years ago, Meituan won the " Thousand Groups Battle ". Today, ten years later, Meituan has grown into a new Internet giant integrating local commercial businesses such as takeaway, in-store, hotel and tourism, and new businesses such as e-commerce, flash purchases, and travel.
After ten years of ups and downs, Meituan is now a trillion-dollar giant listed on Hong Kong stock .
As of the morning of October 18, due to the overall environment of Hong Kong stocks, Meituan's stock price shrank by 2/3 from the highest point of HK$460/share to HK$152.40/share. Even so, Meituan's market value still reached HK$940.712 billion, ranking among the top Hong Kong stocks.
chart | On October 18, Meituan's stock price fell to HK$152.40 per share. (Screenshot of the official website of the Hong Kong Stock Exchange)
, a company with a market value of nearly one trillion yuan, even if its stock price is in a trough, there is no doubt that Meituan's market value is still quite large. In order to support a huge market value in the future, Meituan’s first priority is to make a breakthrough in revenue.
In 2021, although Meituan's new businesses such as e-commerce, flash sales, and errands have obtained a large amount of user traffic, what follows is that Meituan, which has just entered the right track of profit, has "returned to the pre-liberation" due to its new business. Meituan’s financial report data shows that its profit from 2.239 billion yuan in 2019 and 4.708 billion yuan in 2020 to a loss of 23.538 billion yuan in 2021.
Although the outside world believes that Meituan has made a lot of money by relying on the ace business - takeaway, it still has losses. The only problem that can be explained is that the new business is too "burning money". Especially emerging businesses such as unmanned retail cars.
According to Meituan's 2021 annual report, Meituan's business is mainly divided into three categories: the core business "catering takeaway", and the local commercial business that was later expanded and "in-store, hotel and tourism". On the outside, there are "new businesses and other" that have been invested in large scale in the past two years.
It is not difficult to see that in the future, Meituan's revenue will still be in traditional businesses, and its revenue share can be maintained at 50%-60%, while the profit margin is increasing year by year. The profit margin growth rate in 2021 and 2020 reached 100% and 118% year-on-year respectively, making it the most stable and profitable "guaranteed business" among all businesses.
Therefore, Meituan's plan to "enter" Hong Kong is also consistent with its idea of continuing to use traditional businesses to guarantee the bottom line, further expanding revenue and expanding its share of the international market.
#2
"Soaring up" or "bloody rain"?
"Do you want to sell sugar water for the rest of your life, or do you want to get the opportunity to change the world?"
This is a sentence that Jobs said in order to invite John Scully, who was then the president of Pepsi , to join Apple , and is still regarded by many people as the "best sales advertising slogan".
However, is it necessary to be both "selling sugar water" and changing the world? Meituan gave its own answer.
was born, grew up and grew stronger than the Internet era, and has a very strong Internet imprint. Whether it is the strong demand for capital or the desperate pursuit of user traffic, we can see from Meituan's battle with Ele.me , Meituan's development from food delivery business to shared bicycles and other businesses.
Meituan Takeout Rider who is delivering orders ( Xinhua News Agency pictures)
If Meituan successfully expands its takeout business to Hong Kong, Meituan, which has an absolute advantage in the Internet, seems to be able to "sow" in the Hong Kong takeout market.
But there are still many challenges on its rapid development.
At the end of 2021, Uber Eats withdrew from the Hong Kong market, which had been operating for 5 years. According to Measurable AI data, Uber Eats only had 3% of the market share at that time. Currently, the takeaway market in Hong Kong is mainly dominated by Foodpanda and Deliveroo.
As the two local food delivery platforms in Hong Kong, Foodpanda and Deliveroo have equal share in the Hong Kong market. has more than 2 million active users and its service covers more than 10,000 restaurants.
Foodpanda has been in the longest entry. It was established in Southeast Asia in 2012 and went online in Hong Kong in 2014. It is now headquartered in Germany. Its parent company Delivery Hero was listed in Germany in 2017. Deliveroo was founded in the UK in 2013 and entered Hong Kong, China in 2015.
Under the epidemic, the number of citizens going out has decreased, and the two major platforms have launched limited-time discount activities in multiple rounds, gaining a large number of new users. In addition to the takeaway business, Foodpanda and Deliveroo have also developed online shopping business, so that citizens can purchase fresh fruits, daily necessities and other daily necessities without leaving home, laying a certain user base in the Hong Kong market.
As a "newcomer", Meituan Takeout seems to be a bit difficult to achieve a market share comparable to it in the short term.
But it is not impossible.
Due to the high labor costs in Hong Kong, Hong Kong delivery fee is high. reporters use deliveroo to order meals during lunch time. The shipping fee for single meals ranges from 20-30 yuan, which is equivalent to 30% of the original price; Foodpanda members are 99 HKD per month, and they can only enjoy the rights of 40 free delivery fees, but even if they buy a member, the order must reach 100-120 Hong Kong dollars to be exempted.
In addition, the characteristics of small cities in Hong Kong and citizens who are accustomed to dining out and convenient dining out have caused the business development of the two major takeaway platforms to stagnate and stand still.
In contrast, Meituan Takeout, the second quarter financial report of 2022 showed that Meituan instant delivery orders increased to 4.1 billion, and the quarterly revenue of the core local commercial sector, including catering takeout and Meituan flash purchase business, increased to RMB 36.8 billion. Meituan's long-term self-developed drones and automatic delivery vehicles have started normal operations in many cities in the mainland. As of August 2022, Meituan's drone delivery has been launched in four business districts in Shenzhen, with routes covering more than 10 communities and office buildings, and has completed more than 75,000 orders for real users. Will
#3
encounter "unfamiliar to the local environment"?
Not long ago, some takeaway delivery workers on a certain platform in Hong Kong went on strike because they were dissatisfied with the company's new computing system that made the drivers' salaries lower than before, and questioned that the calculation method was opaque, which caused the platform to "cannot deliver" during the peak lunch meal.
Hong Kong local takeaway delivery staff earns an average of about HK$30 per order, while the average price per order of major takeaway delivery staff in the mainland is between RMB 5.5-6. Meituan Takeaway’s primary problem facing entering Hong Kong is how to develop and manage costs. The difference between and the mainland is that serving as a takeaway delivery worker in Hong Kong is not only a local Hong Kong person, but more are foreigners from India, Nepal , Pakistan and other countries, and communication and management are more difficult.
foodpanda takeaway rider (Wenhuibao pictures)
According to "LatePost", Meituan is preparing for its international business, which is under the responsibility of Qiu Guangyu . He will directly report the progress of work to Wang Putong, senior vice president of Meituan and president of the home business group. Qiu Guangyu only joined Meituan in mid-2022 and was temporarily appointed as the assistant to Wang Xing, the founder and CEO of Meituan. He has served as the chief operating officer of Didi Internationalization Division and the head of Kuaishou Internationalization Division.
This is not the first time Meituan has decided to enter Hong Kong. In the first half of 2018, Meituan planned to expand the market, but the project was suspended before it entered the execution stage. A Meituan person said that during business research, it was found that electric vehicles are not allowed to be on the road in Hong Kong and the delivery capacity cannot be guaranteed.
How to adapt to the local situation in Hong Kong is also a major problem for Meituan Takeout to expand the Hong Kong market.
Four years later, Meituan once again reportedly planned to expand its takeaway business to Hong Kong. This time, it has entered the stage of recruiting personnel in the Hong Kong market, and the possibility of finally making a trip is much greater than in 2018.
Although this is the case, is Meituan Takeout "entered" to Hong Kong this time still a "rookie" or has caused a storm, and she will wait for Meituan's next formal deployment before she can understand it.
(text/Reporter Liu Yanling of this magazine)
This article is a new media article of the Hong Kong Economic Herald. If you want to reprint it, please send a private message to contact us.
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