Guotai Junan Securities: The overseas delivery market has vast potential, recommend paying attention to Meituan-W

According to the Zhitong Finance APP, Guojin Securities released a research report stating that the Middle East and Brazil markets have demographic dividends and room for penetration improvement, with the expected profit space in the takeaway market in both regions reaching over 10 billion yuan. Currently, Keeta is achieving rapid expansion through high subsidies, low commission strategies, and technological advantages, and its successful experience in Hong Kong is expected to be replicated in other overseas markets. This year, Keeta is expected to further enter the Brazilian market beyond the Middle East, and once the overseas takeaway platform model is established, profit margins are expected to reach a high level. It is recommended to pay attention to Meituan-W (03690).

The main points of Guojin Securities are as follows:

1. The Middle East + Brazil have demographic dividends, and the takeaway market scale continues to grow

The increase in penetration rate and ARPU drives steady growth in the takeaway market scale in the Middle East and Brazil. According to Statista, 1) User end and user penetration rate: In 2024, the number of users in the Saudi takeaway market will reach 21.2 million, a year-on-year increase of 15.2%, with a user penetration rate of 62.4% (up from 53.5% in 2023), and ARPU increasing by 4.3% year-on-year to $507.54. Although the total population of the Gulf Cooperation Council (GCC) will reach 59.86 million in 2024, the number of takeaway users will be 30.9 million, with Saudi Arabia accounting for 68.6%. There are still broad incremental development opportunities in the GCC countries' takeaway market. In 2024, the number of users in the Brazilian takeaway market will reach 97.7 million, a year-on-year increase of 11.1%, ranking first in Latin America, with a user penetration rate of 46.1%, still having significant room for improvement. 2) Market scale: The takeaway market scale in Saudi Arabia and GCC countries continues to grow, with the Saudi takeaway market scale reaching $10.78 billion in 2024, a year-on-year increase of 17.8%, and the GCC countries' takeaway market scale exceeding $16.5 billion in 2024, a year-on-year increase of 14.3%. The online takeaway market scale in Brazil will reach $18.6 billion in 2024, a year-on-year increase of 16.9%.

2. Competitive landscape of the takeaway market in the Middle East and Brazil: There are already strong local brands, and Keeta needs to break through

1. Competitive landscape in the Middle East: Jahez and HungerStation are leading local takeaway platforms. The competition in the Saudi takeaway market is fierce, with HungerStation and Jahez dominating, together accounting for about 70% of the market share in 2023. Jahez focuses on high-income groups in central areas with a high-end fulfillment experience, while HungerStation targets price-sensitive users in the west with low-price offerings. Keeta, under Meituan, entered the market in September 2024, adopting a gradual expansion strategy to break through competitive barriers, launching high subsidies for users; breaking through the merchant side in layers, attracting small and medium-sized businesses with low commissions, and leveraging Meituan's headquarters resources to tackle large chain brands; its technological advantages are also significant, with a delivery time of only 25 minutes within 1 kilometer, significantly ahead of the industry average, and introducing a late delivery compensation mechanism to enhance user experience. By early 2025, Keeta's downloads surged to the top of the Saudi app store rankings, with market share rising to 10%
2. Competitive Landscape in Brazil: Local Giant iFood Dominates the Delivery Market. Founded in 2011, iFood holds an 80% share of Brazil's delivery market (app side) and is the country's main food delivery service provider. Aaiqfome focuses on small and medium-sized cities, avoiding direct competition with iFood. Non-local platforms struggle to survive under iFood's competitive strategy, but in recent years have made efforts to enter the Brazilian market through new business models.

3. Reviewing Keeta's Successful Experience in Hong Kong: Can It Be Replicated in Overseas Markets?

Meituan's Keeta has efficiently broken into the Hong Kong delivery market with precise localization strategies and technological innovations. Its technological advantages and expansion strategies are expected to be replicated in other overseas markets. 1) The platform deeply integrates into the local ecosystem, cautiously expanding its service range in phases while flexibly forming diverse types of rider teams, significantly improving delivery efficiency in complex urban areas.

1. The platform continuously optimizes its merchant cooperation mechanism, quickly attracting chain brands with a zero-commission policy and no exclusivity clauses, while empowering small and medium-sized businesses through a professional ground promotion team, simultaneously launching a freight-sharing model to achieve thin profit margins with high sales volume, forming a differentiated competitive advantage.

2. On the user side, Keeta strongly launched the "Billion Dollar Reward" subsidy plan, precisely targeting the "single dining" scenario with a first-order discount of HKD 300 and popular packages starting at HKD 29, combined with an unlimited free shipping strategy to quickly capture the minds of price-sensitive users.

3. On the technology front, it relies on Meituan's mature AI algorithms to compress average delivery times to within 30 minutes, achieving a punctuality rate of 98%, while innovatively introducing a late compensation mechanism to build a core experience of "high cost-effectiveness + high certainty."

4. Benchmarking Overseas Delivery Platforms to Assess Keeta's Overseas Profit Potential

Delivery platforms in the Middle East are expected to achieve relatively high profit margins, with Jahez and Talabat's average profit margins at 2.81% and 6.98%, respectively. Keeta's current overseas expansion focuses on food delivery, and the firm believes that once the food delivery model is established, retail-related businesses can replicate relevant experiences. According to the firm's estimates, the overseas profit potential in the Middle East and Brazil markets is expected to exceed 10 billion.

Risk Warning

The progress of overseas market expansion may fall short of expectations; industry competition may intensify; profitability may not meet expectations