Compile |Maggie.
The launch of Meituan's app Keeta in Hong Kong has intensified already fierce competition in the food delivery market. After just 6 months of development, as of December 2023, Keeta has won about 21% of the Hong Kong food delivery market in terms of GMV.
However, this raises a familiar question for the food delivery industry: how to sustain an aggressive growth strategy driven by high incentives?
Since Keeta's debut, Measurable AI has continued to keep a close eye on its development in Hong Kong and has mined more details through dedicated transaction e-receipt data.
As of Q4 2023, Keeta has a sizable market share in terms of order volume, but has a slightly smaller share of total merchandise value (GMV) due to its relatively low average order value (AOV), according to Measurable AI data.
As a new player, Keeta had a market share of less than 5% in its first three months in Hong Kong. During this period, its services have not been extended to the whole of Hong Kong. In the months that followed, KEETA's order volume grew rapidly. As of December, Keeta's market share for takeout orders, excluding self-pickup and grocery orders, had jumped to 37%.
However, it's worth noting that Keeta's other two competitors in Hong Kong, Foodpanda and Deliveroo, offer both groceries and self-pickup services in Hong Kong, which contributes significantly to both orders and gross merchandise transactions.
If all services are included, Keeta's market share in the fourth quarter of last year was actually about 15%. Among them, in December last year, Keeta saw an "unprecedented" growth, accounting for about 21% of the market share in GMV terms. At the same time, foodpanda and deliveroo still lead with around 54% and 25% market share, respectively.
Hong Kong Food Delivery Market Share by GMV in 2023
*: The GMV estimates in this chart are based on monthly takeout order data obtained by Measurable AI, based on the amount of each order after the discount and grocery orders and pickup orders. The data range is from January 1, 2023 to December 31, 2023.
Hong Kong Takeaway Market Share (by Takeaway Orders) in 2023
*: The estimated order volume in this chart is based on monthly takeout order data obtained by Measurable AI, **grocery orders and pickup orders are not included. The data range is from May 22, 2023 to December 31, 2023.
Keeta has an active ** campaign in Hong Kong, and its average order value (AOV) is significantly lower than that of its competitors. According to Measurable AI's transaction e-receipt data, Keeta's average order value in Hong Kong is around HK$102, while its competitors' AOVs for the whole year typically range from HK$170 to HK$180. It's worth noting that Keeta's AOV for takeaway orders is only slightly higher than that for foodpanda and Deliveroo.
Average order value for takeaways in Hong Kong in 2023.
*: Measurable AI derives the estimated AOV in this chart based on the amount of each order after the discount and includes only food delivery orders (excluding groceries). The data range is from January 1, 2023 to December 31, 2023.
Compared to its competitors in the market, Keeta also doesn't offer** grocery delivery, pickup, or membership services.
While Keeta has seen significant growth in both food-only and take-out only orders in a short period of time, it's important to consider other aspects of the business as well. Over the past few years, foodpanda and deliveroo have established themselves in the grocery delivery space through their proprietary services, Pandamart and Deliveroo Hop, as well as partnerships with other grocery merchants. This part also accounts for a large part of the total sales of the two companies.
Notably, according to Measurable AI data, foodpanda's grocery orders accounted for nearly 10% of its total Hong Kong transaction value in 2023.
Food delivery vs. grocery delivery on foodpanda and deliveroo platforms in Hong Kong.
*: Measurable AI, data range from January 1, 2023 to December 31, 2023.
Another important aspect of the food delivery business today is the pick-up service, which is bringing a larger market share to the food delivery companies. After the outbreak of the epidemic, food delivery services have become increasingly favored by users and food delivery platforms. While operating costs are much lower, the platform is still able to get a significant share of orders while keeping users stuck with the apps.
Hong Kong food delivery market share in 2023 (by GMV, pick-up vs. delivery).
*: Based on the amount of each order obtained by Measurable AI and after discounts, grocery orders and pickup orders are included. The data range is from January 1, 2023 to December 31, 2023.
In 2023, both foodpanda and deliveroo will continue to make pick-up orders**. As Measurable AI data, in 2023, about 35% of orders placed on Foodpanda are pick-up orders, and this percentage has also grown from about 16% to 37% on Deliveroo. It will be interesting to see how the pick-up orders of these two companies will grow next year.
Deliveroo and Foodpanda monthly pickup vs. delivery data.
*: Based on the monthly number of takeaway orders captured by Measurable AI, **grocery orders are also included. The data range is from January 1 to December 31, 2023.
The last service that Keeta is currently missing is the premium membership service. foodpanda and deliveroo offer full-fledged premium memberships where users can enjoy exclusive offers and free shipping. Both Deliveroo Plus and Panda Pro have a decent percentage of premium users in their user base. Measurable AI data shows that the loyalty of member users is significantly higher than that of regular users.
Not long ago, Hong Kong's Competition Commission announced the acceptance of foodpanda and deliveroo's commitment to address concerns that some of the requirements for its partner restaurants could harm competition. Just late last month, the European Commission accepted the two companies' pledge to amend their agreements with restaurant partners to allow them to work more freely with multiple food delivery platforms and set their own prices. However, these changes do not include the partnership with Keeta, as it has already crossed the market share threshold (10%) for smaller platforms.
Looking back over the past five years, there have been three companies in Hong Kong's food delivery market – Ubereats, foodpanda and Deliveroo – vying for market dominance. Deliveroo previously led the way in 2019 with a market share of over 60%.
However, the pandemic has changed the rules of the game, with foodpanda and deliveroo almost evenly splitting the market, with Ubereats only gaining a 5% share before exiting the market at the end of 2021. After Ubereats, foodpanda gained momentum, and since 2022, it has captured more than 60% of the market share by revenue.
This article is compiled from the Big Data Platform Measurable AI blog. We will continue to pay attention to how the Hong Kong food delivery market will change in the future.