HONG KONG, CHINA – MAY 22: A poster selling ‘KeeTa’ is noticed on Would possibly 22, 2023 in Hong Kong, China.
Chen Yongnnuo | China Information Provider | Getty Pictures
Chinese language meals supply massive Meituan has introduced a sister app in Hong Kong, its first roll-out outdoor of mainland China — however some analysts are skeptical it could actually temporarily carve out a vital marketplace percentage.
“I am not very constructive about Meituan’s enlargement in Hong Kong,” Shawn Yang, managing director of Blue Lotus Analysis Institute, advised CNBC. “I don’t believe the marketplace is huge sufficient the place Meituan will make investments a large number of sources into.”
The meals supply provider — named KeeTa — introduced on Would possibly 22 in two residential spaces: Mong Kok and Tai Kok Tsui.
A month later, KeeTa introduced it was once increasing to Sham Shui Po and Yau Tsim Mong districts in Hong Kong after its preliminary marketplace release “exceeded expectancies,” it mentioned in a press free up shared with CNBC.
KeeTa plans to hide all the Hong Kong marketplace through the tip of this yr, Meituan mentioned on the time of its release.
I don’t assume [the launch of KeeTa] impacts Meituan’s revenues very a lot since it is just gaining some other 7 million in customers doubtlessly and it already has 700 million in China.
Kai Wang
Senior fairness analyst, Morningstar Asia
The enlargement comes as Meituan faces greater pageant from new gamers reminiscent of TikTok’s sister Douyin in its house marketplace, and as hopes of a powerful post-Covid restoration in China fade.
Meituan is the marketplace chief in China’s meals supply sector, taking nearly 70% of the marketplace percentage within the mainland China, knowledge from trade analysis company ChinaIRN confirmed.
“We have now won a lot of enquiries and appeals from diners and eating places outdoor Mong Kok and Tai Kok Tsui, which has a great deal reinforced our self assurance in additional increasing the area,” a KeeTa spokesperson advised CNBC.
The corporate will “proceed to supply the takeaway provider and increase its services and products to extra portions of Hong Kong once conceivable,” the spokesperson mentioned.
Kai Wang, senior fairness analyst for Morningstar Asia, does not assume the growth into Hong Kong could have a vital affect at the corporate’s income.
He mentioned KeeTa’s enlargement into Hong Kong is “most effective gaining some other 7 million in customers doubtlessly” in comparison to greater than 678 million customers Meituan already has in China.
If there has already been like two or 3 main gamers on this marketplace, then it is in reality very tough to modify shoppers’ mindsets, until they do a large number of subsidy campaigns.
Shawn Yang
managing director, Blue Lotus Analysis Institute
“I don’t believe [KeeTa] impacts Meituan’s revenues very a lot,” mentioned Wang.
Meituan declined to remark at the analysts’ perspectives.
“I believe Meituan needs to discover a marketplace this is culturally with reference to mainland China, [build] a group and skill and check out to peer if they are able to additionally take some marketplace percentage in in a foreign country markets ultimately,” mentioned Yang from Blue Lotus. He was once relating to Hong Kong as a trying out mattress for Meituan which might sooner or later increase the world over.
Stiff pageant
The penetration price of meals supply in Hong Kong isn’t specifically prime.
These days, about 10% of the total eating place trade faucets on meals supply services and products — that is in comparison to a median of 21% throughout China two years in the past, in keeping with a document from analysis company Momentum Works.
That is as a result of “ordering meals supply isn’t as not unusual a dependancy in Hong Kong as it’s in mainland China,” mentioned the document, including that the Asian monetary hub has a prime density of meals and beverage institutions on each boulevard nook.
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Hong Kong’s meals supply marketplace is these days ruled through Foodpanda and Deliveroo, which held stocks of 64% and 36% respectively in Would possibly earlier than KeeTa’s release, in keeping with knowledge supplier Measurable AI. The knowledge takes into consideration each supply and pickup orders.
KeeTa does now not these days be offering meals pickup services and products, most effective supply services and products.
Uber Eats exited Hong Kong on the finish of 2021 after 5 years of running within the territory. It held about 5% marketplace percentage on the time of its go out, in keeping with Measurable AI.
The meals supply marketplace in Hong Kong stays lukewarm, even right through the pandemic, with average enlargement charges.
“If there has already been like two or 3 main gamers on this marketplace, then it is in reality very tough to modify shoppers’ mindsets, until they do a large number of subsidy campaigns,” mentioned Yang of Blue Lotus Analysis.
″[KeeTa’s expansion into Hong Kong] will have to result in extra vouchers and reductions for shoppers. And it will have to get advantages shoppers in the longer term,” mentioned Wang from Morningstar.
One after the other, Hong Kong has introduced a probe into anti-competitive behavior from Deliveroo and Foodpanda. That suggests gamers can’t interact in practices reminiscent of proscribing eating places or penalizing them for switching to partnering solely with different platforms.
This may imply smaller gamers reminiscent of KeeTa could possibly construct marketplace percentage.
Shelling out subsidies
In a bid to obtain new customers, KeeTa is providing 300 Hong Kong bucks ($38.30) value of loose vouchers for each and every new consumer that can be utilized to offset foods and supply charges. The corporate “plans to additional release quite a lot of advertising and marketing actions within the new district” reminiscent of loose supply for all, in addition to referral reductions and meals offers.
KeeTa may be providing set foods from HK$60 together with supply charges to deal with the painpoint of consumers who dine by myself. Foodpanda and Deliveroo’s minimal order necessities generally vary from HK$50 to HK$80 aside from supply charges, in keeping with a CNBC take a look at.
To lure shoppers additional, KeeTa introduced an “on-time promise” coverage to all customers. Consumers get compensated in vouchers if their orders are greater than quarter-hour later than the unique estimate.
Ryan Lai, managing director of Foodpanda Hong Kong, advised CNBC that non permanent promotions aren’t sufficient to ascertain buyer loyalty within the longer run.
“In the sort of aggressive marketplace panorama, we discover that development robust buyer stickiness is a key luck issue,” mentioned Lai.
“In our opinion, the access of a brand new participant within the native supply area displays the untapped enlargement attainable of this trade available in the market,” he mentioned, including that Foodpanda will proceed to serve its shoppers higher.
At the new entrant, a Deliveroo Hong Kong spokesperson mentioned, “Since Deliveroo first entered the Hong Kong marketplace seven years in the past, now we have at all times been constructive concerning the potentialities of the native meals and grocery trade, and as such, we see pageant as a driver for innovation.”
Just lately, the platform additionally introduced the “on-time promise” coverage for paid customers — which compensates them with vouchers if their orders are overdue through quarter-hour or extra.
Alternatively, the meals supply marketplace in Hong Kong “stays lukewarm,” mentioned Momentum Works within the document, which identified that even right through the pandemic, enlargement charges have been average.
However KeeTa can faucet into its father or mother corporate’s experience in China, mentioned the analysis company.
“So long as Meituan has decided management, selects the best folks, and organizes its inside construction successfully, they will have to now not concern about pageant from the 2 incumbents.”