html In early October, many media reported that Meituan is preparing a new project for the Hong Kong market, focusing on food delivery business, led by Qiu Guangyu , former head of Kuaishou Internationalization Division.
As of now, Meituan has not made an official response to this news. People close to Meituan revealed that the confidentiality level of the new project is very high, and even internally, it has been maintained in a non-public state. However, Meituan's recent external recruitment actions verifies the speculation that Meituan's takeaway business will enter the Hong Kong market.
htmlOn October 25, Meituan's official recruitment platform showed that there were 23 overseas business-related positions that were being recruited on the same day, of which 20 were marked in Hong Kong in the base column, and the recruitment requirements stated that "Cantonese and English can be given priority as working languages." Except for two tax-related positions that belong to the group's financial platform, the other 18 business positions belong to the home business group, that is, the business group where the takeaway business is located.
Photo source Meituan Recruitment Official Website
From the recruitment action, Meituan Takeout Hong Kong business should still be in the team formation stage. The positions that were publicly recruited in October include user product managers, delivery product managers, backend product managers, C-end operation managers, customer service managers, etc., which almost cover all core links on the product side of the takeout business.
Meituan is silent on its new project. In the Hong Kong market on the other side of the rumor, what is waiting for Meituan is not the old rival Ele.me , but Foodpanda and Deliveroo, and , which seized more than 90% of the Hong Kong takeaway market share, and even forced the rapid growth of Uber Eats at the end of last year.
What is the difference between the Hong Kong takeaway market and the mainland? What is the situation of Meituan’s potential competitors? What advantages will Meituan have when entering Hong Kong and what problems will it face different from the mainland? Hedgehog Commune (ID: ciweigongshe) sets his sights on Hong Kong, China, 2,100 kilometers away from Beijing Meituan headquarters, trying to use data and case studies to find some answers.
What competitors do Meituan have in Hong Kong?
The global takeaway business has supported several listed companies, including Meituan in China, Mail.ru in Russia, Delivery Hero in Germany, Deliveroo in the UK, Just Eat Takeaway in the Netherlands (from the merger of the two companies Just Eat and Takeaway), DoorDash in the United States, etc. Previously, Meituan and these companies maintained a competitive trend of "no wells to the river", that is, Meituan only focuses on food delivery business in mainland China, and overseas food delivery platforms also intend to avoid mainland China during the expansion process.
If Meituan Takeout enters the Hong Kong market in China, the idea of Meituan's entry into the Hong Kong market will eventually be the first head-on confrontation between Meituan and overseas competitors in its main business of takeout. Among them, the two biggest rivals are Foodpanda, a subsidiary of German food speed delivery group Delivery Hero and Deliveroo, a British takeaway delivery platform.
In September 2021, J.P.Morgan commented on the current Hong Kong takeaway market in an analysis report on the Asian takeaway market: "After Deliveroo and Foodpanda became the first two players, the competitive landscape has not changed significantly. The advantages of diversified restaurant selection and strong customer service have helped these two platforms build a strong enough moat, making it difficult for smaller competitors to effectively expand their scale."
Currently, Deliveroo and Foodpanda jointly occupy more than 90% of the Hong Kong takeaway market. Uber Eats, which has fierce global expansion momentum of , tried to enter the Hong Kong market in 2016, but after years of operation, its market share has always hovered around 5%. Finally, at the end of 2021, it announced the closure of the takeaway business in Hong Kong and instead focused on Uber's own travel business.
Two takeaway platforms headquartered in Europe are now "local snakes" in the Hong Kong takeaway market. Meituan wants to get a share. On the one hand, it needs to expand new takeaway users and takeaway scenarios, and on the other hand, it needs to seize existing market share from competitors.
Foodpanda was founded in 2012 and its main markets are distributed in Africa, Asia, Eastern Europe and Latin America. This is one of the reasons why it entered the Hong Kong market in China early in 2014.
At the end of 2016, Foodpanda was acquired by the German company Delivery Hero, becoming an important takeaway delivery platform under its jurisdiction. While expanding its original market, it also began to test the waters in European markets such as the UK.
Delivereoo was founded in 2013. Its founder Xu Zixiang is a Chinese American. She was born in 1979 like Meituan CEO Wang Xing. Public reports say that the reason why Xu Zixiang wanted to build a takeaway platform was because the food near his office was too bad after moving to London from New York. In an open letter before the company went public, he wrote: "I want to let excellent restaurants in London deliver delicious food."
Deliveroo deliveryman in the UK, the picture source network
Deliveroo's takeaway entrepreneurial story started from London, and expanded from the UK, Belgium , France, Germany, Italy and other European countries to Asia and Oceania . ——The path is completely different from Foodpanda.
There are completely different things in their initial cooperation with restaurants and target users.
Deliverew was engraved with the imprint of "delivery food for excellent restaurants" by the founder from the beginning. It focuses on high-end restaurant delivery. The key emphasis is on cooperation with Michelin restaurant . Therefore, the target users are high-consumption people who are willing to pay for expensive meals; and Foodpanda started from Asia, Africa, Latin and Latin and Eastern Europe. In the early stage, those who joined the platform to open takeaway services were fast food, pastry, fried chicken and other merchants with lower unit prices.
But in the end, the demand for market expansion has allowed these two takeaway platforms with completely different routes to gradually step into the same river. ——Deliveroo has begun to connect to more affordable restaurants, and Foodpanda has also begun to provide more refined catering takeaways. Opening these two software in Hong Kong, there are almost no differences in food choices from the recommended restaurant page.
market share combined exceeds 90%, does it mean that Hong Kong consumers are satisfied with these two takeaway platforms? Maybe it means that the Hong Kong takeaway market has been saturated? The answer is no.
Simona, who has worked in Hong Kong for four years, said that she and her friends rarely order takeout. When asked about the reasons, she listed a lot, including the delivery fee being too expensive, the small amount of things to order, the high price of takeaway food than dine-in, etc.
Simona works in a well-established insurance company in Hong Kong, with a daily lunch budget of HK$60. Even so, she still calls herself "a person who can't afford to takeout." "Maybe those financial people in Central can afford takeout every day, I don't know," she laughed and laughed, and then overturned her conclusion. "But when you go to Central, you can see that the longest queue at noon is also a two-dish meal that sells 35 yuan per serving."
dishes mean dishes in Cantonese. Two-dish meals refer to boxed lunches with two dishes, sold in shops along the street, most of which are priced at HK$35 per serving. Simona once saw many customers in suits waiting in the middle of the meal, waiting for the meal to be picked up in front of the two-dish restaurant shop.
In order to further confirm Simona's description of Hong Kong takeaway and find out why Hong Kong takeaway has become a "high-consumption product", we conducted more detailed data analysis and case studies on the two major takeaway platforms.
What are the differences between the current takeaway market in Hong Kong and the mainland?
The "two heroes competing for hegemony" pattern in the Hong Kong takeaway market in China looks quite similar to the mainland, but in terms of the overall takeaway market, the only similar situation may be left behind the fact that "two companies are competing." Whether it is user habits, distribution scope, delivery methods, or main business categories, there are huge differences between Hong Kong and the mainland market.
Hedgehog Commune randomly selected three different locations in Hong Kong and conducted a case study on the local takeaway situation. The sample is a high-quality recommended restaurant among the two major platforms, Foodpanda and Deliveroo. (To avoid the impact of browsing and consumption history on the recommendation algorithm, we use a newly registered account for testing.)
According to the high-end restaurant recommended by the two platforms for new users positioned in three different locations in Hong Kong, the following characteristics that are extremely different from the mainland takeaway market.
. The starting fee is higher, and the product price is slightly higher than offline.
On Foodpanda and Deliveroo, most restaurants delivered by platform riders are at a starting fee of HK$60, equivalent to about RMB 55. Some restaurants with faraway distances and delivered by merchants will set up higher delivery fees, and the starting fee for restaurants with higher unit price can be as high as HK$3,000.
For mainland consumers, the most accustomed to seeing the delivery fee is 20 yuan. There will be many stores in third- and fourth-tier cities that are less than 15 yuan or do not require a delivery fee. Some restaurants with higher customer unit prices will also set up a starting fee on their own, but it will generally be within 200 yuan.
corresponds to the high delivery fee for Hong Kong takeaway, which is a large number of products that have been configured into packages to meet the delivery fee requirements. Looking through these recommended restaurants, most of the popular products are set meals, including a staple food, a snack and a drink, which users need to match on the product details page. Taking the Hong Kong-style tea restaurant , which has a lower average customer price and a higher sales volume, as an example, a set meal of about 70 yuan can be composed of wonton noodles , fish balls and frozen lemon tea. (The choice according to my own taste is actually many other matching options. Frozen lemon tea can also be replaced with milk tea, but it costs more.) Compared with offline, there is a certain price increase for takeaway products.
If the item you ordered is insufficient to get a delivery fee, the mainland takeaway platform’s handling method is that it is impossible to place an order and will not be delivered. The Hong Kong takeaway platform chooses to let consumers make up for the delivery fee. For example, the starting fee for Restaurant A is HKD 60, and Customer B only ordered a burger worth HKD 48. During settlement, Customer B needs to make up for the 12 Hong Kong dollars, that is, spend HKD 60 to buy a burger worth HKD 48. In Hong Kong, this is called "small order fee".
Instead of spending money, it is better to collect other products or exchange packages that meet the requirements for delivery. Under the influence of various factors, the amount of all orders sold on these two takeaway platforms in Hong Kong will be higher than HK$60. In comparison, Meituan once announced in its financial report that the average customer unit price of takeaway orders in 2021 was RMB 48.86, which is lower than the current minimum customer unit price in the Hong Kong market.
This means that the current average customer unit price in the Hong Kong takeaway market will be much higher than that in the mainland market. takeaway means convenience, cheapness and many choices for most mainland consumers. For Hong Kong consumers, at least "cheapness" is not the advantage of takeaway.
. The distance range of food delivery is small for restaurants.
The advantage of "multiple choices" is not fully demonstrated in the existing Hong Kong takeaway products.
ObservationThe 30 high-end restaurants recommended by Hong Kong’s two major takeaway platforms for users in different locations, only one restaurant has a distance of more than 1 kilometer, and the other 29 restaurants are all within 1 kilometer of the location, with a proportion of up to 96.7%. Such a result of
is not because the distance factor accounts for too high a proportion of the platform recommendation algorithm, but because the overall delivery range of takeaway in Hong Kong is far lower than that in the mainland market. When opening Meituan or Ele.me in the mainland, it is not surprising that there are options for takeaways around 3 to 4 kilometers, but when opening a takeaway platform in Hong Kong, there are very few restaurants that provide delivery 3 kilometers away.
To further verify the conclusion, we conducted a full statistical analysis of the takeaway restaurant locations that can be ordered on both platforms in the above table, and finally came up with the following conclusions related to the delivery distance. (Only count catering merchants, fresh food, department stores and other types of merchants are not included in the statistics; only count merchants that can deliver instantly, merchants that need to book in advance or only provide self-pickup/car delivery services are not included in the statistics.)
On the Foodpanda platform, there are 297 catering merchants that can order takeout when users are located in Place A, of which 289 are no more than 1 kilometer away from Place A, accounting for as high as 97.31%. only 8 restaurants over 1 kilometer provide takeaway services, accounting for 2.69%; no restaurants over 2 kilometer provide takeaway services. In other words, users in the A-level area cannot order any food delivery 2 kilometers away on Foodpanda.
Deliveroo's situation is slightly better than Foodpanda. Among the 465 catering merchants who can order takeout in Place A, 357 are located within 1 kilometer, accounting for 76.77%; there are 90 takeout restaurants that can be selected within 1 to 2 kilometers, accounting for 19.35%; only 8 restaurants 2 kilometers away provide instant takeout services to users of Place A, and the starting fee is above HK$200.
In recent years, mainland Internet companies have been paying close attention to the "last 1 km" issue. How to solve the last 1 kilometer of travel? How to solve the last 1 kilometer of logistics distribution? How to solve the last 1 km of community service? But in Hong Kong's takeaway market, the situation may be the opposite. - Takeout only get 1 kilometer, who will break through the market 1 kilometer away?
. The delivery time is mostly between 10 and 30 minutes.
can deliver the characteristics of the restaurant being close to, which further affects the delivery time.
Because the takeaway option provided by the platform is mostly within 1 kilometer of the distance from the user, the corresponding estimated delivery time is mostly between 10 and 30 minutes (Deliveroo generally estimates the time range, and we take the intermediate value when calculating). The estimated delivery time of 30 sample restaurants was calculated, and the average obtained was 26 minutes.
In the mainland, most of the delivery time for takeaway is 30 to 50 minutes. Only a small number of chain fast restaurants that are closer and have faster meals (such as KFC , McDonald's , Burger King , etc.) can be delivered within 30 minutes.
Therefore, takeout is more like a short-distance errands for current Hong Kong consumers. ——Let the deliveryman pick up food at a restaurant within his usual walking distance, and the waiting time is similar to that of the restaurant he usually walks to. He uses a delivery fee to save about 20 minutes to and from the restaurant.
. The delivery fee is high, but there are ways to reduce the exemption.
One data not entered in the above table is the delivery fee.
Currently, the delivery fees of the two major takeaway platforms in Hong Kong range from HK$20 to HK$40 (equivalent to RMB 18.4 to RMB 36.8), which is much higher than the delivery fees of takeaway in mainland China. However, both platforms currently have free delivery fees. For example, Foodpanda needs to purchase members to obtain free delivery fees, while most merchants on Deliveroo provide free delivery fees for spending over HK$100.
Foodpanda The monthly membership price is HK$65-89. After becoming a member, you can get free shipping for the first 50 orders per month. The membership fee is equivalent to the delivery fee for 2 takeaways.
When there is a way to reduce and exempt the delivery fee for a single order, the excessive delivery fee is not the main problem of Hong Kong takeaway in the user growth stage. The question is whether Hong Kong consumers can get a better experience through the takeaway consumption pattern, such as whether they can have more choices, better services, save more time, and how much they are willing to pay for experience-level gains.
At least at present, the takeaway option that is concentrated in the "1 km" living circle and requires high delivery fees has only gained the choice of a small number of Hong Kong consumers.
What space may exist in Meituan Takeout in Hong Kong?
The current differences between the Hong Kong takeaway market and the mainland takeaway market are partly determined by the local market and social environment in Hong Kong, and partly the independent choice of the takeaway platform.
For Meituan, which has been working in the mainland market for many years and undertakes 14.4 billion orders every year, platform infrastructure and operation experience is of course its most valuable asset. However, when moving to the Hong Kong market, it is almost impossible to fully replicate the mainland's operational and growth model. The feasible way is to provide a better and differentiated consumer experience under limited conditions to compete and expand the takeaway audience based on the local market environment in Hong Kong.
space comes from unmet needs of consumers.
divided by the user experience of takeaway products, and the pain points appear in the following links.
. Less takeaway options
Currently, Hong Kong users have fewer takeaway options, which are mainly reflected in two aspects. First, there are fewer products that can be ordered for takeaway orders, mainly concentrated in catering; second, merchants that can be delivered instantly are mainly concentrated within 1 kilometer.
1) There are fewer categories
In the mainland, consumers have become accustomed to purchasing various daily necessities through takeaway. The battery is gone? Order a takeaway. Exhaust masks? Order a takeaway. Want to prepare a bouquet of flowers for your mother on Mother's Day? Order a takeaway.
After years of market cultivation, this habit has been transformed into the integration advantage of local life service platform. ——Marketing of all categories of products will open takeout and take orders from online; more and more things can be bought on the takeout platform, and consumers will open the software to search as soon as possible when they need to buy products.
So now when you open Meituan Takeout or Ele.me, in addition to catering categories, you can also find supermarkets, pharmacies, flower shops and other merchants. If you need it, you can even order a pair of men's black business leather shoes with formal wear with takeout, and choose whether to have a round-toe casual style or a pointed British style. The takeaway rider will appear in front of you in an hour, riding an electric bike and carrying your leather shoes.
In Hong Kong, takeaway platforms mainly sell catering, and a few convenience stores and fresh food supermarkets will be connected, but generally require a higher delivery fee or a long-term reservation in advance. Medicines, flowers, daily necessities, etc. have vertical platforms to provide online purchase and offline delivery services, such as Iherb, which provides medicine and health products takeaway, Brighten Mall, which provides flower takeaway, and fresh food and fresh food. The two platforms,
Dliveroo and Foodpanda, are also trying to aggregate more categories. For example, Deliveroo has connected to a small amount of fresh food and department stores; Foodpanda has also started operating pandamart in Hong Kong since 2021, providing 24-hour department store delivery through its own warehouse, and its model is closer to Hema in the mainland. Overall, the transformation of Hong Kong takeaway platform from catering service providers to local life service providers is still in its infancy.
For Meituan, if it intends to enter the Hong Kong market and access more categories of merchants in one step, it may be an important means to weaken the first-mover advantage of the two mainstream takeaway platforms.
2) Takeaway delivery range is small
Currently, the delivery range of takeaway in Hong Kong is small, and relevant data and case analysis have been provided above. However, the delivery range is small, and the necessity of consumers ordering takeaway will be greatly reduced. If I spend the delivery fee and raise the delivery fee, all I can buy is something I can buy within a few hundred meters. Why bother to order takeaway?
Simona said that some of her colleagues would use the "pickup" function of the takeaway platform, that is, order food on the software in advance, and then walk to the restaurant to pick up the food by themselves, saving the time to wait for meals after arriving at the store. Because some restaurants will offer 20% discount on pickups, the discount can just cover the merchant’s price increase on online products, and ultimately the same price as the direct order in the store.
Hong Kong takeaway delivery scope is limited by local transportation conditions.
In the mainland, if you want to become a takeaway rider, you must first buy an electric car. A worker at Foxconn, Shenzhen, once told me that after their colleagues on the production line planned to work part-time to takeout, they went to the store to buy three cheapest electric cars. In the end, two people persevered, and the other resolded the electric car to other workers who wanted to takeout.
However, in Hong Kong, the requirements for electric vehicles to obtain road licenses are more stringent. They need to pass the review of the Ministry of Transport to obtain a vehicle license. At the same time, the driver must hold a driver's license.
Therefore, many part-time takeaway deliverymen in Hong Kong will choose to become "infantry", that is, deliver takeaway while walking. The delivery range of walking delivery workers is significantly smaller than that of "riders" who ride or drive, and the income per order is also lower, but because of the low entry threshold, it has gradually become the first choice for part-time takeaway delivery workers.
Hong Kong deliverymen have four main modes of transportation. Picture source Foodpanda official website
If you want to expand the scope of takeaway delivery, the platform will inevitably need to adjust the proportion of "infantry" and "drivers" among its deliverymen. Whether it is recruiting platform self-operated riders by providing transportation or basic salary, or encouraging more part-time delivery workers to choose to become "riders" through higher transportation subsidies and rider subsidies, it means that higher operating costs need to be invested on the delivery side.
Use more costs to exchange for more growth space. What Meituan may need to consider is how to find a balance point.
. Order takeaway is very expensive
The expensive takeaway in Hong Kong is, one is the product itself, the second is the delivery fee, and the third is the delivery fee. Compared with the mainland, Hong Kong's takeaway price of hundreds of Hong Kong dollars per order is really not suitable as a daily consumption method.
Among them, the price of goods is expensive because the overall price level in Hong Kong is slightly higher than that in the mainland. Neither the local takeaway platform nor Meituan, which may enter the market, cannot change this fact. In addition, the unit price of goods sold on takeaway platforms will be more expensive than dine-in in the store, and the platform has acquiesced to this phenomenon. Simona has compared several restaurants she had eaten in and found that almost all the products have increased prices to varying degrees on the takeaway platform. This conclusion made her basically give up solving the lunch problem on weekdays through takeaway. The delivery fee from
is relatively high. On the one hand, it is because the price of the product itself is more expensive. On the other hand, it is because when the delivery resources are limited and the cost is high, both the platform and merchants need to maintain the unit price at a higher amount to balance the revenue and expenditure.
delivery fee is relatively high because Hong Kong labor costs are more expensive, and the above mentioned electric vehicles are limited, so there are more "infantry" and therefore the delivery efficiency is lower. Higher labor costs and lower delivery efficiency have forced the platform to set higher delivery fees or free delivery fees thresholds to cover delivery costs.
For Meituan, if you want to enter the Hong Kong market, the initial subsidy strategy should revolve around merchants, riders and users. subsidizes merchants, allowing merchants to settle in the new platform and accept lower product delivery fees; subsidizes riders, making riders more willing to take orders on the new platform and provide a larger range of delivery services; subsidizes users, allowing new users to enjoy more product discounts and free delivery fees, and continue to enjoy rights and interests through sharing fission, while bringing new users to the platform.
But burning money is not a lasting solution. After completing the initial accumulation of three-end users, Meituan should need to replace monetary subsidies with its own platform's hematopoietic ability and end the process of burning money expansion as soon as possible.
For example, at the merchant side, it supports high-invested merchants within the new platform, creates popular stores through traffic tilts, and creates "show cases" among all local merchants, thereby increasing its reputation in local stores; in a low-cost way, local/foreign entrepreneurs are encouraged or copied to operate takeaway stores, specialize in online catering orders, reduce store rental costs, and thus reduce takeaway product costs.
On the rider side, the high investment in the early stage is expected to form a delivery team with a more reasonable ratio of "riders" and "infantry" to accelerate the recovery of investment by acquiring more long-distance orders.
On the user side, the normalized red envelope subsidy needs to be reduced to a certain amount, supplementing more rights and interests under the membership system or sharing system, reducing the losses caused by subsidies through paid income and new growth brought about by user fission.
Reducing takeaway costs will mean higher investment no matter which link you start from. How much more money can you spend and how much profit can you get from users and transaction growth? If Meituan wants to enter the Hong Kong market, it may need to dynamically adjust the weights on the balance while constantly trying.
After all, this confrontation has never happened before.
. Less customer service
Customer service is also a business with extremely high labor costs, but for Meituan, it may be much easier to solve than other links.
Due to the online nature of after-sales and other customer service, Meituan can fully establish a customer service center in Guangdong second-tier cities with low labor costs, or use the original customer service center to recruit local Guangdong employees with native Cantonese language, form a Cantonese customer service team, and support Hong Kong business.
The same method can also be used in the process of establishing connections with local Hong Kong merchants. ——Introduce and settle in Hong Kong merchants through Guangdong’s outbound call center, establish basic contacts, and then base Hong Kong local employees complete further merchant expansion, reduce the initial expansion costs as much as possible, and use funds for order subsidies and distribution team building.
As a mainlander working in Hong Kong, Simona is very excited about the rumors that Meituan Takeout will enter the Hong Kong market. "I hope to reduce the price of takeaway in Hong Kong. I'm so afraid that Meituan will become so expensive when she comes to Hong Kong. I guess there will be a lot of preferential subsidies in the early stage, like in the mainland market at the beginning. It's OK, let's talk about it if you get a fry." The day before the interview, Simona and a group of strangers played scripts at the board game bar. The store did not provide drinks, which was the few scenes she said that "can only order takeaway".
She is responsible for ordering milk tea takeout, and after collecting the money, she found that the price was not up to par. "The price tag posted on the milk tea cup is the original price sold in the store, but the price tag on Foodpanda was increased by 6 or 7 yuan per cup." As a result, everyone transferred money to her according to the price tag posted on the cup, and Simona lost a difference of dozens of yuan. Scenes like
rarely appear in the mainland, so I took it for granted: "Doesn't there be an online order-sharing function?"
Simona sent me a screenshot of the order that made her lose money the day before, and replied to me: "It's not that advanced."
(Simona is a pseudonym)
Reference:
Food Delivery/QuickCommerce—A deep dive into Asia - increasingly a key investor focus for Delivery Hero, J.P.Morgan.
- END -
- END -
Source | Hedgehog Commune Official Account [Text | Chen Meixi Edited by | Li Leshu]
Statement | Pictures, texts and video accounts in the article are reproduced from the original article. If there is any copyright dispute, please contact us to delete it.
