Meituan launches food delivery platform in Hong Kong amid growing market potential
Published: May 22, 2023 10:29 PM
A snapshot of Hong Kong Photo: VCG

A snapshot of Hong Kong Photo: VCG

Delivery platforms from the Chinese mainland have been eyeing more expansion opportunity in the Hong Kong Special Administrative Region (HKSAR) amid the foreseeable market potential. 

KeeTa, a new brand under Chinese food delivery platform Meituan, has been available on app stores for Hong Kong users on Monday, marking the company's first expansion overseas and the trial will be tested in Mong Kok and Tai Kok Tsui. The launch of one billion ($128 million) Hong Kong dollars reward program to attract new customers and restaurants.  

Foodpanda, Deliveroo and UberEats used to be the major players in Hong Kong's food delivery market. Foodpanda entered Hong Kong in 2014 and has been cooperating with more than 14,000 restaurants, and Deliveroo made its entry in 2015 with more than 6,500 restaurants on the platform. UberEats entered the market in 2016 but soon exited. Foodpanda and Deliveroo now occupy 90 percent of the market share.  

Ordering food delivery in Hong Kong may encounter obstacles such as expensive delivery fees and relatively longer delivery period, so local consumers prefer to cook at home rather than ordering delivery.  

Aiming to tackle the situation, KeeTa has implemented targeted mechanism to ensure the delivery efficiency, with compensation vouchers and promotions to be issued for late orders.  

Facing the entry of KeeTa, Deliveroo and Foodpanda welcomed its entry to the market. Foodpanda said that it is pleased to see the industry blossoming, giving consumers and deliverers more choices. A spokesperson from Deliveroo noted that Meituan entering the market reflected the development potential for delivery platforms in Hong Kong and will regard the competition as a drive force for innovation, aiming to jointly elevate consumers' experience with more platforms joining the market.  

Research data showed that the total takeaway transactions in Hong Kong account for only 8.3 percent of the overall catering market, compared with 21.9 percent in the Chinese mainland.  

Industry insider noted that Foodpanda and Deliveroo may consolidate the loyalty of existing customers and the treatment for staff while pulling in merchants to become exclusive partners, which is more in line with their interests.  

Data from Statista estimates that the total revenue of the food delivery market in Hong Kong is expected to exceed 5.1 billion Hong Kong dollars in 2023 and will reach 7.4 billion Hong Kong dollars in 2025, with a penetration rate of about 3 percent. However, the penetration rate in the Chinese mainland for food delivery reached nearly 30 percent.