Meituan_ Tapping into a US$30bn Middle East Opportunity

Summary of Meituan's GCC Expansion Conference Call Company and Industry Overview - Company: Meituan - Industry: Online Food Delivery - Market Focus: Gulf Cooperation Council (GCC) region, targeting a total addressable market (TAM) of US$30 billion by 2028 Key Points and Arguments 1. **Expansion Strategy**: Meituan is focusing on international expansion, particularly in the GCC region, due to a challenging macroeconomic environment in China. The company aims to capture a 20$30 billion by 2028, translating to a gross merchandise value (GMV) of US$6 billion and incremental revenue of US$1.5 billion by 2028 [3][4][12] 2. Market Growth: The GCC online food delivery market is expected to grow at a compound annual growth rate (CAGR) of 15% from 2024 to 2028. Saudi Arabia is identified as the largest market within the GCC, with a projected TAM of US$16 billion by 2028, more than double that of the UAE [4][9][15] 3. Market Dynamics: The GCC market is characterized by high profitability, low delivery costs, and a fragmented competitive landscape, which presents opportunities for consolidation. Key demographics include high urbanization rates and a growing young population [3][20] 4. Competitive Landscape: Meituan's entry into Saudi Arabia has been rapid, achieving a 10% order share within three months of launch. The company plans to enter the UAE in the second half of 2025, followed by Kuwait and other GCC countries [4][10][30] 5. Operational Efficiency: Meituan's success in China is attributed to its superior fulfillment capabilities, efficient cost structure, and high management quality. The company aims to replicate this model in the GCC, where it expects to achieve steady-state unit economics significantly higher than in China [11][36] 6. Financial Projections: Meituan anticipates operating losses from new initiatives in the GCC, projected at RMB 8.5 billion in 2025, RMB 7 billion in 2026, and RMB 3 billion in 2027, with a break-even point expected in 2028 [12][35] 7. Market Penetration: The company has already established a presence in nine cities in Saudi Arabia, covering approximately half of the population. Meituan's app has gained significant traction, surpassing competitors in daily active users (DAU) shortly after launch [66][80] 8. Regulatory Challenges: Potential hurdles include regulatory requirements in Saudi Arabia, user loyalty to established platforms, and competition from dominant players like Talabat and HungerStation [42][43] Additional Important Insights - Market Assessment Framework: Meituan's proprietary assessment ranks Saudi Arabia, the UAE, and Kuwait as the most attractive markets in the GCC based on economic health, urbanization, demographics, and market dynamics [20][88] - Long-term Outlook: The company expects to achieve a long-term unit economics of RMB 4.2 per order in the GCC, which is 2.8 times higher than in China, with an operating profit margin of 3% [36][61] - Incremental Revenue Growth: The new initiatives are projected to drive a revenue CAGR of 19% from 2024 to 2028, outpacing the core local commerce growth rate of 17% [35] This summary encapsulates the strategic direction, market opportunities, and financial outlook for Meituan as it embarks on its expansion into the GCC food delivery market.