On December 16, multiple sources reported that Meituan's front-end warehouse business, Elephant Supermarket, is preparing to venture into the Middle East, with Saudi Arabia as its inaugural destination, mirroring the path taken by Meituan's food delivery service.

According to feedback from some self-media users, rumors of Elephant Supermarket's overseas expansion emerged as early as November but were met with skepticism. Considering the newly revealed information that "the initial stage was handled with great caution and confidentiality," it's plausible that a month ago, Meituan preferred to keep Elephant Supermarket's Saudi venture under wraps.

Now that the news is out, it may be tied to Meituan's food delivery service achieving notable success in Riyadh last month, alongside Dingdong Maicai, another front-end warehouse fresh food delivery model, announcing its entry into Saudi Arabia. As the sole Chinese delivery platform operating in Riyadh, Meituan's window of opportunity is narrowing, and it can't afford to delay.

Furthermore, Meituan's drone delivery business for overseas ventures, Keeta Drone, obtained a BVLOS drone delivery commercial operation license from the Dubai Civil Aviation Authority on December 17 (Dubai time, four hours behind Beijing time), marking the initiation of Meituan's drone delivery service in the United Arab Emirates.

Upon securing the Dubai drone certificate, Meituan promptly released relevant job postings. On the same day, Meituan advertised multiple job roles for Keeta Drone, encompassing government affairs, business management, operations management, and equipment operation and maintenance solutions, among others.

However, a closer inspection of the job postings reveals that Keeta Drone's positions are not solely based in Dubai but also in Riyadh and Hong Kong. It's evident that the commercialization of Meituan's drone business will soon extend to Saudi Arabia as well.

Elephant Supermarket and the drone business have chosen distinct locations for their inaugural overseas stops, amid the ongoing competition between Saudi Arabia and the United Arab Emirates for the Middle East regional hub. Considering these moves collectively, Meituan is capitalizing on the rivalry between the two nations.

01. Elephant Supermarket and Dingdong Maicai Rely on Keeta's Groundwork

If the rumors spread by some self-media outlets are true, in November, Meituan was still keeping the news of Elephant Supermarket's overseas expansion under wraps, but in December, multiple sources confirmed the news. Meituan's change of attitude at this critical juncture may stem from two reasons.

Firstly, Meituan's food delivery business in Saudi Arabia progressed more smoothly than anticipated in November, paving the way for Elephant Supermarket. Previously, an article in "New Standpoint" mentioned that sources revealed Keeta had an average daily order volume of 70,000 in Riyadh, aiming for 100,000 orders in November with a market share of around 27% at the time. In contrast, Keeta's market share in Hong Kong during its first three months was only 1% to 3%. Keeta's initial foray into Saudi Arabia has been unimpeded.

The logistics demands of food delivery surpass those of front-end warehouse fresh food delivery. Since the initial food delivery exploration has been unhindered, Elephant Supermarket's main challenge in entering Saudi Arabia lies solely in the construction of front-end warehouses.

Moreover, it's highly probable that Meituan's target of 100,000 food delivery orders in Riyadh in November was achieved, and the results of the region's instant delivery market validation met Meituan's expectations. Consequently, Elephant Supermarket dared to "reveal its hand" at this juncture for its overseas venture.

Secondly, rumors circulated a month ago that Dingdong Maicai's inaugural overseas venture would also be in Saudi Arabia, leaving Elephant Supermarket with a limited window of opportunity.

On November 13, Sina Technology reported that Dingdong Maicai, like Elephant Supermarket, operates a front-end warehouse fresh food delivery model. According to sources, Dingdong Maicai's management team held a management meeting in Saudi Arabia this year. Currently, a significant number of Dingdong Maicai personnel are stationed in the Middle East, and the company is also recruiting local teams. This overseas venture is led by COO Ding Yi, with "expectations of successfully establishing front-end warehouses in the future."

From Dingdong Maicai's confidence in the smooth establishment of front-end warehouses, it's evident that its team in Saudi Arabia has likely observed Meituan's exploration process in the country.

Other instant delivery platforms already exist in Saudi Arabia, such as Mrsool, Talabat, and UberEats, among others, both local and international. Keeta is the sole Chinese grocery instant delivery platform, and the exploration of Chinese internet thinking in Saudi Arabia is currently in a golden period. With Dingdong and potentially more Chinese instant retail platforms entering the market in the future, Meituan's window of opportunity is shrinking.

However, despite the fact that the inaugural overseas stops for Chinese instant retail platforms have all been in Saudi Arabia, there are also rumors that Meituan is considering expanding its food delivery service to Dubai. Combined with recent news that the first stop for the commercialization of drone overseas ventures is Dubai, it's plausible that the timing for Meituan's food delivery and Elephant Supermarket businesses to enter Dubai will be sooner than anticipated.

02. Drones Venture Overseas, Not Limited to the United Arab Emirates

On December 18, Meituan's drone business made its inaugural overseas stop in Dubai, United Arab Emirates. In fact, based on public information released by Meituan, a more accurate description would be that Meituan's drone business for overseas ventures, Keeta Drone, is simultaneously deploying in both Saudi Arabia and the United Arab Emirates. However, since the relevant certificate from the United Arab Emirates was obtained first, Dubai became the starting point.

On December 17, the Crown Prince of Dubai announced that Dubai Silicon Oasis (DSO) had become the first commercial operation area for drone logistics. On the same day, Meituan obtained the first commercial operation license for drone delivery from the Dubai Civil Aviation Authority.

On the day the certificate was issued, Meituan promptly released relevant job postings. On December 17, Meituan's job postings announced multiple job roles for the drone overseas venture business, encompassing government affairs (senior public affairs expert), business management (marketing expert, senior business development), operations management (business district support manager, BVLOS pilot, etc.), and equipment operation and maintenance solutions.

These positions are based in Riyadh, Dubai, and Hong Kong. The positions in Riyadh also encompass core roles in government affairs, business, operations, and maintenance.

(Image source: Meituan job postings)

It's not surprising that Keeta Drone was the first to obtain the certificate in the United Arab Emirates. Previously, there were indeed more drone-related news about Meituan in the United Arab Emirates.

At the GITEX GLOBAL conference in Dubai in 2023, Meituan demonstrated drone delivery. Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, also stated, "Meituan's decision to operate in our market underscores the favorable environment we have created for cutting-edge companies. We look forward to collaborating with them to fully integrate their logistics system into our existing infrastructure, providing truly beneficial technology to the UAE and its people."

It seems that Meituan has long made a "commitment" to establish drone delivery in Dubai. From Meituan's perspective, the Middle East is the focus of its overseas business, and Dubai is the commercial hub of the Middle East. Multiple instant retail platforms have already established a strong presence and are operating maturely in Dubai. There are bound to be more orders for the drone business to practice, and judging from the speed at which Dubai issued the drone qualification, Dubai has a more mature policy system to support the commercialization of related technologies.

It's reported that in the initial stage, Keeta Drone will collaborate with some catering chain enterprises by adopting third-party logistics to undertake their delivery services in specific areas of Dubai, similar to the role of "crowdsourcing" riders in China, except that "crowdsourcing" riders are replaced by drones. At this juncture, Keeta Drone is merely a delivery brand providing logistics services, and users are likely to place orders through other local instant retail platforms.

If Meituan subsequently expands its food delivery platform and Elephant Supermarket to Dubai, there may arise a scenario where Meituan serves simultaneously as a third-party delivery service and a food delivery platform.

Judging from the aforementioned job postings, Meituan is also simultaneously deploying its drone business in Saudi Arabia but is still awaiting a commercial operation license for drones from Saudi Arabia.

03. Competing for the Middle East Hub, Meituan Positions Itself as a Mediator

This time, the United Arab Emirates awarded the first commercial operation license for drones to Meituan. Saudi Arabia, which has been competing with the United Arab Emirates for the regional hub in recent years, will undoubtedly take notice. This can also be seen as an indirect countermeasure by the United Arab Emirates against relevant Saudi policies.

Previously, in 2021, Saudi Arabia announced that starting from January 1, 2024, if foreign companies do not establish regional headquarters in Saudi Arabia, the Saudi government will not sign new contracts with them.

The Saudi Investment Ministry defines a "regional headquarters" as "a formally established multinational company entity under Saudi law, whose purpose is to support, manage, and provide strategic guidance to its branches, subsidiaries, and affiliates operating in the Middle East and North Africa region."

In short, the scenario Saudi Arabia desires is that the headquarters of multinational companies in Saudi Arabia can manage and coordinate the company's branches in other regions of the Middle East.

Although the United Arab Emirates has not taken any overt direct countermeasures against this policy, it can attract enterprises (especially technology enterprises) to settle by fostering a more open business environment and a more mature policy system, evidenced by its pioneering issuance of qualifications to Meituan's drones.

Simultaneously, the establishment of drone delivery in the United Arab Emirates does not appear to contravene Saudi Arabia's regional headquarters policy.

Judging from the fact that Dingdong Maicai is following in Meituan's Keeta footsteps and will also set up operations in Saudi Arabia, Meituan has indeed presented Saudi Arabia with more opportunities.

In terms of business relationships, Meituan's Keeta is the cornerstone of its overseas operations. Keeta encompasses both the food delivery platform and the logistics itself. By establishing Keeta and Elephant Supermarket in Saudi Arabia as their inaugural stops and simultaneously deploying the drone business there (though the drone qualification from Saudi Arabia has not yet been obtained), Meituan truly merits the title of regional headquarters. Mao Yinian, head of Meituan's drone business, once stated, "Wherever Keeta is, we are there."

From this perspective, Meituan's pioneering acquisition of the drone qualification in the United Arab Emirates also seems like a nudge for Saudi Arabia – urging the Saudi government to expedite policies for the commercial operation of drones and issue qualifications to Meituan. It's believed that this won't take too long.

Following this logic, Meituan's drone business in Dubai can also be managed and coordinated by Meituan's Keeta headquarters in Saudi Arabia.

On the other hand, the United Arab Emirates has also achieved the most favorable outcome for itself through Meituan.

As mentioned above, the business environment in Dubai, United Arab Emirates, is more mature than that in Riyadh, Saudi Arabia, and the instant retail delivery market is also more developed. If Meituan's Keeta platform were introduced too hastily in an attempt to compete with Saudi Arabia for Meituan's Middle East headquarters, it would inevitably clash with locally established platforms. There's no need for the United Arab Emirates to offer better incentives to Meituan's Keeta at this juncture compared to Saudi Arabia.

Meanwhile, the drone delivery business encompasses core drone technology, route design, and further policy optimization. By solely introducing drone delivery services as a third-party delivery service, it can effectively complement the local business ecosystem and technological advancement.

Reflecting on Meituan's wavering in its overseas ventures over the past two years, it's evident that there were early signs of Keeta and the drone business commencing in different locations. Meituan's move can even serve as a model for many other instant retail platforms aiming to enter the Middle East.

*The lead image and illustrations in the text are sourced from the internet.