Author | Liu Baodan From performance to market confidence, Meituan is walking out of a three-year low point, but Wang Xing is not stopping there - he has even bigger plans. Going overseas has become a must for Chinese companies. Meituan, which has been warming up for 8 years, has finally made up its mind to put going overseas on the agenda. Recently, Meituan began recruiting senior engineers for international silver enterprise direct connection. After the model was successful in the Hong Kong market, Meituan officially kicked off its overseas expansion, accelerated recruitment and put the first stop of the overseas expansion in Saudi Arabia in the Middle East. Going overseas is a critical turning point, which means that after more than ten years of capacity accumulation, Meituan has to export its local life capabilities to the world, which is as significant as the replication of TikTok by ByteDance. In the wave of Internet companies going overseas, Meituan went overseas later because local life patterns are more important than social, e-commerce and other industries. However, Wang Xing must make this move. Against the background of intensified domestic competition and the shrinking of community group buying, he must find a new growth story. On his entrepreneurial journey, Wang Xing is still determined to create a new business legend in this global adventure. A must-have question. Meituan has fought a beautiful takeaway battle in Hong Kong. On May 6, Measurable AI, a market research firm, released the latest data showing that by March 2024, according to the number of orders, KeeTa, the takeaway business of Meituan in Hong Kong, has a market share of 44%, rising to the largest takeaway platform in Hong Kong. However, Hong Kong is only a stopover for Meituan's overseas expansion, and Meituan has set its real meaning of going overseas in Saudi Arabia. Wall Street news learned that Meituan has been recruiting people around the direction of going overseas in the past two months. The positions include engineers, overseas human resources and operation experts, international payment and transaction product managers, mainly responsible for payments, employee management and related products in overseas markets. More importantly, the recruitment of local talents. More than a month ago, Meituan posted relevant recruitment information on LinkedIn and the Middle East recruitment platform Baye.com, with Riyadh, the capital of Saudi Arabia, as the place of work. From the city selection, Meituan did not choose the United States with a larger market space, nor did it choose Southeast Asia where culture and food are more similar, but chose Saudi Arabia. It can be seen that Meituan's overseas expansion strategy still has a heavy experimental component and is more cautious. Wang Xing is not fighting an unprepared battle. For this overseas expansion, Meituan has been planning for many years. As early as 2016, Wang Xing began to consider the issue of going overseas and visited Silicon Valley, Berlin, Israel, Jakarta and other places. In 2017, Meituan officially laid out overseas accommodation business, first connecting hotels in nearly 100 countries overseas to the Meituan application. At that time, the domestic and foreign takeaway wars were in full swing, and with Meituan's listing in Hong Kong in 2018, Wang Xing's overseas strategy was forced to be shelved. Since then, Meituan has also made a series of international investments, including Swiggy in India, Gojek in Indonesia, and Opay in Nigeria, involving food, taxis, payments and other fields, to prepare for going overseas. Along with the frequent news reports of Meituan's victory in Hong Kong, Meituan's overseas plan was finally brought to an unprecedented strategic height in 2024, and Wang Xing once again rushed to the forefront. In February, Meituan put the home business group, the in-store business group and other businesses into the core local business sector, and appointed Wang Putong as CEO, while Wang Xing personally took charge of overseas business, which ensured the landing of the overseas expansion strategy in the organizational structure. In fact, before the confirmation of the overseas expansion strategy, Wang Xing personally visited the Middle East last May and met with members of the Saudi royal family, laying the foundation for Meituan's layout in Saudi Arabia.

Meituan is walking out of the three-year low point, from performance to market confidence, but Wang Xing is not stopping there - he has even bigger plans. Going overseas has become a must for Chinese companies. Meituan, which has been warming up for 8 years, has finally made up its mind to put going overseas on the agenda. Meituan has fought a beautiful takeaway battle in Hong Kong. On May 6, Measurable AI, a market research firm, released the latest data showing that by March 2024, according to the number of orders, KeeTa, the takeaway business of Meituan in Hong Kong, has a market share of 44%, rising to the largest takeaway platform in Hong Kong. Hong Kong is only a stopover for Meituan's overseas expansion, and Meituan has set its real meaning of going overseas in Saudi Arabia. Wang Xing is not fighting an unprepared battle. For this overseas expansion, Meituan has been planning for many years. As early as 2016, Wang Xing began to consider the issue of going overseas and visited Silicon Valley, Berlin, Israel, Jakarta and other places. Since then, Meituan has also made a series of international investments, including Swiggy in India, Gojek in Indonesia, and Opay in Nigeria, involving food, taxis, payments and other fields, to prepare for going overseas. Along with the frequent news reports of Meituan's victory in Hong Kong, Meituan's overseas plan was finally brought to an unprecedented strategic height in 2024, and Wang Xing once again rushed to the forefront.

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Meituan has begun to recruit senior engineers for the international silver enterprises. After the model was successful in the Hong Kong market, Meituan officially kicked off its overseas expansion, accelerated recruitment, and chose Saudi Arabia in the Middle East as its first stop of overseas expansion.

Going overseas is a critical turning point, which means that after more than a decade of capacity accumulation, Meituan has to export its local life capabilities to the world, which is as significant as the replication of TikTok by ByteDance.

In the wave of Internet companies going overseas, Meituan went overseas later because local life patterns are more important than social, e-commerce and other industries. However, Wang Xing must make this move. Against the background of intensified domestic competition and the shrinking of community group buying, he must find a new growth story.

On his entrepreneurial journey, Wang Xing is still determined to create a new business legend in this global adventure.

A must-have question.

Meituan has fought a beautiful takeaway battle in Hong Kong.

On May 6, according to the number of orders in March 2024, Meituan's takeaway platform KeeTa has a market share of 44%, and has become the largest takeaway platform in Hong Kong.

Meituan has set its real meaning of going overseas in Saudi Arabia.

Meituan has been recruiting people around the direction of going overseas in the past two months. The positions include engineers, overseas human resources and operation experts, international payment and transaction product managers, mainly responsible for payments, employee management and related products in overseas markets.

More than a month ago, Meituan posted relevant recruitment information on LinkedIn and the Middle East recruitment platform Baye.com, with Riyadh, the capital of Saudi Arabia, as the place of work.

From the city selection, Meituan did not choose the United States with a larger market space, nor did it choose Southeast Asia where culture and food are more similar, but chose Saudi Arabia. It shows that Meituan's overseas expansion strategy still has a heavy experimental component and is more cautious.

Wang Xing is not fighting an unprepared battle. For this overseas expansion, Meituan has been planning for many years.

As early as 2016, Wang Xing began to consider the issue of going overseas and visited Silicon Valley, Berlin, Israel, Jakarta and other places. In 2017, Meituan officially laid out overseas accommodation business, first connecting hotels in nearly 100 countries overseas to the Meituan application.

Since then, Meituan has also made a series of international investments, including Swiggy in India, Gojek in Indonesia, and Opay in Nigeria, involving food, taxis, payments and other fields, to prepare for going overseas.

Along with the frequent news reports of Meituan's victory in Hong Kong, Meituan's overseas plan was finally brought to an unprecedented strategic height in 2024, and Wang Xing once again rushed to the forefront.

Meituan has put the home business group, the in-store business group and other businesses into the core local business sector, and appointed Wang Putong as CEO, while Wang Xing personally took charge of overseas business, which ensured the landing of the overseas expansion strategy in the organizational structure.

In fact, before the confirmation of the overseas expansion strategy, Wang Xing personally visited the Middle East last May and met with members of the Saudi royal family, laying the foundation for Meituan's layout in Saudi Arabia.

From the perspective of city selection, Meituan has a wide range of choices, but Wang Xing ultimately chose Saudi Arabia, possibly because of Saudi Arabia's economic status and market potential.

Saudi Arabia has a strong economic foundation and is the largest economy in the Middle East. The per capita GDP level of Saudi Arabia in 2022 is as high as 30,000 US dollars, ranking among the top in the world. The capital Riyadh has a population of about 6 million, similar to mega-cities like Hangzhou and Nanjing in China.

Moreover, Saudi Arabia has a strong user group and infrastructure for food delivery. The size of Saudi Arabia's dining market is around USD 30 billion in 2024, with many players in the market, including local food delivery platform Jahez, Saudi subsidiary of Germany's food delivery giant Deliver Hero, Hunger Station, etc., which is suitable for Meituan to practice its operation.

Jiang Han, a senior researcher at Pangoo Think Tank, believes that with the deepening of globalization and the growing demand for convenient life by consumers, Meituan's model has a wide range of applicability, especially in emerging markets such as the Middle East, where local life services are not perfect and Meituan has the opportunity to quickly occupy market share.

Going global is a checkpoint test for Meituan's local life capabilities. Whether Meituan can tap into the Saudi market also determines its future expansion road.

New story of capital

After Internet giants such as Alibaba, ByteDance, and Pinduoduo successively went global, Meituan finally joined the wave of going global.

In the past fourteen years, Meituan has undergone two important nodes in its strategic orientation. One is from the group-buying battle to the food delivery war, where Meituan consolidated its local life capabilities and expanded delivery to cover all categories; the other is Meituan's continued exploration of community group buying business.

Now, Meituan's going global may be the third strategic turning point. Going global is a broad market space, carrying new possibilities for Meituan's future performance growth, and it has the potential to become a new story of capital.

From the perspective of our own business development, now is a suitable time for Meituan to go global.

In the domestic local life business, Meituan's competition with ByteDance has stabilized. In the fourth quarter of 2023, the commission and online marketing service revenue growth rate in Meituan's core local business returned to over 30%. In the first quarter of this year, the sales of the two sides stabilized at about 2:1, and the market share did not change further.

This means that Meituan can consider longer-term plans with spare energy. If not going global at this time, when is the best time?

Especially, the community group buying business, which was once bullish, has already been forced to shrink. Wang Xing admitted in the financial report that the community group buying market is more difficult than previously expected and the operating losses will be significantly reduced by 2024.

In the community group buying race, Meituan cannot see the possibility of profit in the short term, and Wang Xing needs to find new growth engines for Meituan.

Meituan also needs to give investors more confidence. As of today's close, Meituan's stock price was HKD 113.5, and it has nearly doubled since February, but there is still a huge gap from its high point. Going global undoubtedly is the best path to open up growth space.

Difficulties are also foreseeable. Zhu Xiaohu, founding partner of GSR Ventures, has pointed out that going global defines the ceiling of Chinese Internet companies. Meituan may redefine the height of the ceiling.

Compared with manufacturing going global and Internet companies going global, the challenges Meituan faces are undoubtedly greater. Food delivery requires a large number of merchants on the supply side, and is associated on the demand side with a large number of consumers, and is delivered through riders in the middle, involving a multitude of intricate details such as culture and dining habits, policies and regulations, transportation and delivery costs.

This puts high demands on the business model. In China, Meituan achieves operational efficiency maximization through scale effects and algorithm enhancement, mainly relying on high gross margin in-store business to achieve profit growth, and its delivery has been in continuous loss for many years.

This determines that the Meituan model has certain requirements on the population of cities and regional density when expanding overseas. It is said that Meituan was interested in acquiring Foodpanda's food delivery business in Southeast Asia last year but gave up because it was difficult to make a profit.

In addition, Meituan also faces policy and regulatory risks as well as market competition risks. The case of TikTok has already demonstrated the high degree of uncertainty of policies, which is also the biggest factor affecting enterprise going global. Whether Meituan can establish a worldwide food delivery brand remains to be seen—it has only just begun.

The advantages are also obvious. Jiang Han believes that Meituan has accumulated rich operational experience and user data in the Chinese market, as well as technological and data-driven advantages. In addition, the brand influence and financial strength of Meituan will provide strong support for its expansion into overseas markets.

As Meituan gradually expands overseas, capital is also starting to reassess Meituan. On June 1st, Bloomberg data showed that Fidelity Advisor Focused Emerging Markets Fund, a newly established market fund under Fidelity, increased its shareholding in Meituan in the Hong Kong stock market in April. Bank of America Securities also recently raised Meituan's target price to 189 yuan, reiterating a buy rating.

Undeniably, going overseas may be the most difficult market that Wang Xing faces, but it may also create new business legends.

After experiencing the battle of group-buying, food delivery and Douyin, Wang Xing has been preparing for the global conquest of Meituan.

Editor/Emily