Wednesday, 2024 December 18

Delivery Hero to partially divest its Southeast Asian operations under Foodpanda

Chinese food delivery giant Meituan is reportedly in talks to explore the acquisition of Delivery Hero’s operations in Southeast Asia, including its Foodpanda brand. While the discussions remain uncertain regarding a finalized transaction, Meituan’s consideration reflects its global expansion ambitions and the intention to enter the Southeast Asian food delivery market, potentially impacting regional players such as Grab.

Founded in 2010, Meituan has evolved into one of the largest food delivery platforms in China, operating in over 2,800 cities and counties. Its foray into the Southeast Asian market represents a strategic shift, reflecting the company’s ambition to tap into new growth opportunities beyond mainland China. Notably, this may be partially driven by the escalating competition Meituan is experiencing in the domestic market. In recent years, the company has been in fierce competition with the likes of Kuaishou, Douyin, and Alibaba’s Ele.me, among others, across various verticals in the local lifestyle sector.

The discussions about acquiring Delivery Hero follow Meituan’s recent introduction of KeeTa, a new food delivery brand launched in Hong Kong in May this year. This marks the company’s inaugural venture into providing delivery services beyond mainland China. Following its launch in two residential areas, Mong Kok and Tai Kok Tsui, Meituan plans to serve the entire Hong Kong market by the end of 2023.

Berlin-based Delivery Hero, the parent company of Foodpanda, has confirmed discussions about a partial sale of its operations in Southeast Asia. This decision comes in response to challenges it has faced post-COVID-19 in the Southeast Asian market, where growth has slowed. The potential divestment of its Foodpanda brand across several countries, including Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos, forms part of Delivery Hero’s strategy to optimize operations in the region. Initially rumored to be of interest to Grab, the potential entry of Meituan as a competitor adds a layer of complexity to the bidding process.

A foodpanda delivery staff in Myanmar. Photo courtesy of Shane Min Zaw

Having rapidly established itself as a leader in ride-sharing, food delivery, and fintech across the region, Grab could face stiff competition from Meituan to maintain its foothold in the region’s delivery landscape. Despite recently achieving profitability on an adjusted basis, Grab could soon face a new challenge.

Meituan’s interest in acquiring Delivery Hero’s operations in Southeast Asia aligns with the broader trend of Chinese tech companies seeking international expansion. For example, Tencent has introduced its services like WeChat Pay and its cloud unit to other countries.

The potential acquisition could disrupt the competitive landscape of Southeast Asia’s food delivery market. With its substantial population size and a rising demand for online services, the Southeast Asian market is evolving into a critically significant battleground for these tech giants.

Gideon Ng
Gideon Ng
I excel in simplifying difficult concepts into in-depth, long-form articles, particularly for my passions in life (finance, cryptocurrencies, and football). I strongly believe in educating the masses on cryptocurrencies to shorten the learning curve as more people make the shift from Web2 to Web3.
MORE FROM AUTHOR

Related Read