Meituan Delivery Takes Four Months to Expand From Kowloon to Hong Kong Island

On September 19th, Meituan launched its food delivery service KeeTa in Hong Kong Island. Currently, KeeTa covers nearly 50% of the population in the delivery area, with the exception of the southern district of Hong Kong Island and the entire New Territories. On May 22nd this year, KeeTa was launched in Kowloon, becoming Meituan‘s first destination outside mainland China.

KeeTa spokesperson stated that they have received a lot of support in the regions where they are already online, and their growth has exceeded expectations, so they have accelerated their expansion speed. In July this year, KeeTa opened a voting area on the app to prioritize the selection of expansion areas based on user votes.

Being online for 4 months, KeeTa’s strategy seems to have not changed much. They focus on user feedback and actively cooperate with chain catering brands, but it appears that they have increased their subsidy efforts.

In September this year, KeeTa launched the “Free Shipping for All” campaign, where each user can enjoy free shipping for one order per day, with a maximum discount of HK$45 (approximatly ＄5.75). This promotion is more generous and extensive compared to the “Free Shipping on Thursdays, Fridays, and Saturdays” introduced by KeeTa in July and the “Daily Half-Price Deals” launched within the app in August.

It is difficult to open up the food delivery market in Hong Kong solely relying on subsidies. The two major players, Deliveroo and foodpanda, have previously aggressively subsidized users for ordering takeout, but after the subsidies stopped, most people returned to dining at physical restaurants. With high labor costs and a dense restaurant scene in Hong Kong, especially in urban areas where there are restaurants just downstairs, the cost of dining in or self-pickup is lower. Nowadays, both Deliveroo and foodpanda have adapted to the market by offering self-pickup services.

SEE ALSO: Meituan Launches Food Delivery Brand KeeTa Amid Hong Kong Debut

KeeTa’s lack of self-pickup service reflects Meituan‘s determination to test the overseas food delivery market in Hong Kong. One of KeeTa’s advantages compared to its international counterparts is its more efficient delivery algorithm. According to calculations by Fangzheng Securities, as the number of users and orders increases, the average delivery cost can be reduced to HK$17 (approximatly ＄2.2), currently around HK$30 (approximatly ＄3.8). It is understood that KeeTa recently gathered hundreds of riders from Shenzhen to deliver meals in Hong Kong, possibly in an effort to proactively reduce delivery costs and improve speed. However, sources close to Meituan indicate that this is unlikely due to policy restrictions.

In KeeTa’s view, “One Person Canteen” may also be the key to opening up the market. Its single-person set meal is free of delivery charges for orders over HK$60 (approximatly ＄7.7), which is much cheaper than regular takeout that often costs over a hundred Hong Kong dollars. The industry believes that this will help gather more orders and improve meal preparation efficiency, thereby encouraging businesses to offer discounts.

KeeTa previously mentioned that the “One Person Canteen” was very popular, with half of the users placing repeat orders. Some users even placed three orders per week. The most popular restaurant is McDonald’s, although specific order quantities were not disclosed. In the announcement on the 19th, KeeTa specifically mentioned that they have further upgraded the “One Person Canteen”. This includes collaborating with more merchants and offering more meal options. Additionally, there will be free shipping promotions in September, and some prices have been reduced to match dine-in prices. They will strive to lower the prices of more meal options to match dine-in prices in the future.

With the entry of KeeTa, the food delivery market in Hong Kong has become lively again. In August, media evaluations showed that all three platforms have new promotions every week, with similar intensity. Especially Deliveroo and foodpanda offer self-pickup services for takeout orders, without queuing or delivery fees. With coupons, prices can be as low as 60% off dine-in prices.