Meituan, which went public in Hong Kong in 2018, is finally going to enter the Hong Kong market after five years of listing.
The First Financial Reporter logged in to Meituan’s relevant website to check and found that users can already fill in the relevant personal information to sign up for Meituan Hong Kong delivery staff. The reporter also noticed that Meituan opened the "Meituan delivery staff" channel on the instant message software Telegram in early February this year, and released the first message on the afternoon of February 20, giving the introduction of Meituan delivery staff and the recruitment registration link.
According to the introduction, Meituan divides the delivery staff into "riders" and "infantry". "Riders" need to be at least 18 years old, have a motorcycle, a valid driver’s license, a driving license and car liability insurance, and need to have safety equipment. "Infantry" can be at least 16 years old. Both require qualifications for life in Hong Kong and communication equipment. As of press time, the channel has more than 2,000 subscribers.
In addition, the first financial reporter checked on the Hong Kong talent recruitment website and found that Meituan has recently posted positions for business development personnel and key account managers related to takeout.
Regarding the entry into the Hong Kong takeaway market, the first financial reporter asked Meituan about this, but Meituan has not responded as of press time.
A Hong Kong user showed her commonly used takeaway app to First Financial Reporter
Hong Kong’s takeaway market is yet to be developed
According to local consumer feedback, Meituan has a lot of room to explore when entering Hong Kong.
A person who works on the main island of Hong Kong Island told First Financial Reporter that the takeaway market in Hong Kong currently mainly includes Deliveroo (household delivery) and Foodpanda two major platforms. Previously, Uber Eats, the Uber takeaway service, did not gain a foothold in the Hong Kong market and finally left the market. Among them, Deliveroo is a British food delivery platform. In the fourth quarter of 2022, the company’s orders in overseas regions fell by 5%, while orders in the UK and Ireland local markets rose. Foodpanda’s parent company is Delivery Hero in Germany. It is reported that it will achieve profitability in 2023. Delivery Hero is considering adjusting some markets, including South East Asia.
She concluded to reporters that the labor cost in Hong Kong is high, so the delivery fee of Hong Kong takeaway is high. In addition, there are pain points such as long delivery time, average user experience of takeaway packaging and distribution services, and insufficient coverage of cooperative merchants.
For example, in some takeaway packaging details, even some good merchants are often poorly packaged, unsealed, and often spilled. In addition, whether it is a large restaurant or a small restaurant, the delivery is slow, and the delivery takes more than 40 minutes. In case of bad weather such as rain, it takes 1-2 hours or even longer. In terms of delivery fees, even if the distance is very close, it costs about 35 yuan. Some restaurants need to spend 200-300 yuan at a time to enjoy free delivery. In addition, users can get certain discounts by buying a takeaway membership every month (about 100 Hong Kong dollars).
In addition to the delivery platform, there are also Hong Kong consumers who have reported to reporters that many restaurants will deliver their own goods. "According to the delivery fee, the delivery fee for the closer distance is about 8 Hong Kong dollars, and the freight for the farther distance ranges from more than 10 Hong Kong dollars to more than 40 Hong Kong dollars. Some restaurants will give free delivery if they hold events." Overall, consumers believe that the current delivery service in Hong Kong is not convenient.
In addition, Hong Kong consumers’ user habits are also different. In an interview with the First Financial Reporter, many Hong Kong consumers said that unlike mainland netizens who have become accustomed to ordering takeout on mobile phones, Hong Kong’s streets are close, restaurants are densely distributed, and it is very convenient for people to eat out. Therefore, the consumption habits and demand of takeout are relatively "mild". Therefore, it seems that the service of the takeaway industry is not advancing so fast, but I believe that the Hong Kong takeout market will be "rolled up" after more competitors enter, and it is expected that there may be a subsidy war. Delivery fees are also expected to decline.
Another consumer told reporters, "Most people like to go to restaurants to eat, fresh and cheap. There are also people who choose takeout. If there is a subsidy or it is cheaper, more people will definitely be willing to use it."
Income up to HK $35,000
From the salary given by Meituan’s official website, Meituan may not worry about finding riders after entering Hong Kong.
The reporter checked the information and saw that Meituan Hong Kong riders’ income is composed of three parts: delivery service fee, group reward (including delivery on time rate, order completion rate, order receiving rate and other indicators) and event reward. To encourage registration, Meituan gave a welcome reward. New deliverymen have "single prize activities" within 14 days after successful registration, and have the opportunity to earn an additional HK $2,500 during this period.
Some people calculate that based on the delivery of about two orders in one hour, assuming that the deliveryman has completed 500 orders and received all the rewards in the month, the maximum income can reach 35,000 Hong Kong dollars. In contrast, according to public data, the median monthly income of employed people in Hong Kong in the second quarter of last year was 20,000 yuan (excluding foreign domestic helpers).?
Judging from the delivery situation of mainland riders, a single rider can deliver more than 900 orders per month. Meituan rider at a site in Tongzhou District, Beijing told the First Financial Reporter that the average daily delivery order volume of riders at the site is about 30 orders, that is, a single rider can reach 900 orders per month. If during the peak period of holidays, the average daily delivery order volume of each delivery staff will reach 40 orders.
However, giving high income also means that the company needs to bear high rider expenses. Coupled with the price war and subsidy war when entering new markets, Meituan is expected to still burn money when entering the Hong Kong market. How much cake can be grabbed from Deliveroo (household delivery) and Foodpanda tests Meituan’s comprehensive operation ability, and Meituan’s performance in the Hong Kong market may also directly affect its Hong Kong investors.
In fact, from the perspective of time, Meituan has been planning to enter the relevant market for a long time. Previously, in the third quarter of 2022 earnings call, Wang Xing responded that Meituan will continue to explore the Chinese mainland market and will also go to other regions. At present, Meituan’s market test in Hong Kong is not large, and there are differences in services between the two places. The team also needs to adjust the existing business model to cope with the new market.
In October last year, Meituan’s official recruitment platform showed that many of the overseas business-related positions under recruitment were marked with Hong Kong in the base column, and the recruitment requirements indicated that "Cantonese and English can be used as working languages are preferred". Most of the business positions belong to the home business group, that is, the business group where the takeaway business is located.
However, from the financial report, Meituan has not yet achieved balance in the distribution part. Taking the third quarter of 2022 financial report as an example, Meituan’s distribution service revenue reached 20.10 billion yuan in the quarter, while the distribution-related costs reached 22.50 billion yuan.
From the perspective of competition, the competition in the takeaway market is intensifying. In February, Douyin said that the takeaway business in cooperation with Ele.me is currently being carried out in some pilot cities. At the same time, Douyin’s "group buying and distribution" project is still being piloted in Beijing, Shanghai and Chengdu. Recently, merchants in these three cities have been opened to self-service. In the future, depending on the pilot situation, we will consider gradually expanding the pilot cities; not long ago, the WeChat platform also launched "store delivery" cut-in takeaway service in some cities, which means Meituan will face multi-party competition.
