Saudi market highly competitive, high delivery fees among key challenges: Keeta CEO

Tony Qiu, Vice President of International Business at Meituan and CEO of Keeta in Saudi Arabia, said the food delivery market in the Kingdom is expected to grow by at least 20% year-on-year.

In an interview with Argaam, Qiu said the Saudi market is highly competitive, with many companies in the sector offering excellent services. He noted that the rising delivery fees remain one of the key challenges in the market.

Asked about the reasons of choosing Al Kharj to launch Keeta’s operations, the official explained that this decision was made as a special appreciation for the city and its residents after he and his team were welcomed warmly by a local gentleman there.

Qiu offered an overview of China's Meituan, which owns Keeta and its application in Saudi Arabia, detailing their partnerships, the number of registered drivers since its launch, Keeta’s commission rates, and user spending rates in Saudi Arabia compared to China, and their targets.

Here is the full interview with Tony Qiu:

Q: Could you provide an overview of Meituan, the Chinese parent company of Keeta? What is the scale of their investment in the Saudi market, and what percentage do they own in the Saudi branch? Who are the other partners involved?

A: Meituan was founded in 2010 with the mission to help people eat better and live better. In China, Meituan provides services such as delivery of food, groceries and medicine, group buying of in-store dining, beauty and entertainment products, and booking of hotels, air flight tickets and train tickets.

In 2023, Meituan served 680 million users, worked with 10 million merchants and attracted seven million riders. Meituan is also developing technologies such as drones and autonomous vehicles to help speed deliveries. Meituan is publicly traded on the Hong Kong Stock Exchange (HKG: 3690), with a market capitalization of approximately $140 billion.

Keeta is the localized arm of Meituan, supporting the company’s international business and is fully operated by Meituan.
 

We are very excited to enter the Saudi market and are committed to supporting the Kingdom's Vision 2030. By leveraging our services and technologies, we aim to contribute to the enhancement of the country's quality of life. In line with this commitment, Keeta will invest SAR 1 billion in the market and prioritize the recruitment of local talent across operations, marketing, sales, and technology.

Q: How do you assess the competition in the Saudi food delivery market, and what will Keeta do to stand out?

A: The market is highly competitive, with many players providing excellent services, and we hold them in high regard. We believe there is much we can learn from their strengths. However, we have identified several key challenges faced by both consumers and merchants.

The first challenge is the high cost of delivery fees, which has been a frequent source of user dissatisfaction. In response, we have implemented free delivery for over 90% of the restaurants on our platform.

Secondly, delays in delivery are another common issue. Utilizing our advanced technology, we are committed to improving punctuality. We offer on-time delivery guarantees to all our customers, and in cases where the delivery exceeds a 15-minute delay, we provide compensation.

Finally, we are dedicated to fostering transparent and equitable partnerships with our merchants. We believe that such partnerships, built on fairness and shared values, are essential for sustainable, mutual growth.

Q: Why did Keeta choose to launch in Al Kharj instead of starting in a larger city like Riyadh?

A: During a market research trip last February, we visited Al Kharj. There were ten of us and we stopped at a local coffee shop. One local gentleman came up and asked where we were from.

We told him "China". He was super friendly and wanted to pay our bill. Then he invited us to his house where we were warmly welcomed by his family and friends. We tried local Saudi coffee and started to learn more about local customs.

At the end, we told him we’d come back to return his hospitality. So, we launched Al Kharj first and we visited the gentleman during our launch week, with a Chinese tea set as a gift.

Q: Can you share some key metrics: the number of app downloads, the number of restaurant and store partners, the number of registered drivers, and the average daily orders since Keeta’s launch?

A: We currently work with 7,000 restaurant partners from local coffee shops and restaurants to global chains, including KUDU, McDonald’s, Herfy, KFC, Domino’s, Shawarma House, Al Romansiah, Mama Noura, etc … We have registered more than 10,000 riders. Both numbers are rapidly increasing.

We focus on the continued growth and success of Keeta in the Kingdom and while specific metrics like downloads or daily orders are confidential, we are really pleased with the way users in the Kingdom have embraced Keeta.

Q: What commission does Keeta take from restaurant and store partners, and do you plan to maintain one of the lowest rates in the market?

A: Our commission rates are in-line with local market standards, and we aim to leverage our technology and operational expertise to help our restaurant partners increase both sales and profitability. Additionally, we are committed to onboarding more restaurants to ensure that customers have access to a diverse range of options that meet their needs.

Q: What are your growth expectations for the food delivery market in Saudi Arabia in the near future?  

A: We expect the food delivery market to grow by at least 20% year-on-year. This is driven by several factors. Key among these is the Kingdom’s young and tech-savvy population, increasing urbanization and a strong shift toward convenience-oriented services.

Additionally, the Saudi government’s “Vision 2030” initiative, which promotes economic diversification and digital transformation, will likely contribute to a more favorable environment for tech-driven food delivery services.

Q: How do the spending habits of users on food delivery apps in Saudi Arabia compare to those in China on a yearly basis?

A: Consumers in Saudi and China are both high frequent food delivery users compared to the rest of the world. In Saudi Arabia, there is a strong emphasis on family-sized meals and group orders. In contrast, Chinese consumers order more set meals, driven by fast-paced urban lifestyles.

Q: What are your targets for this year and the next in the Saudi market?

A: Our first goal is to offer a solid service for our users in the Saudi market. Even though we have strong technology and more than ten years of operational experience in China, we are new to the Kingdom. When you start in a new market, it’s normal to make mistakes. Our approach is to be humble, learn as we go, and make our product so great that Saudis will fall in love with Keeta.

Our second goal is to build a strong team. Today, we already have more than 300 employees in Saudi, with half of them Saudi nationals. We are hiring more people. We are looking for passionate talents who share our mission and are eager to learn and develop. And we believe Keeta can provide them tremendous growth opportunities.

Our third goal is to expand across more cities in the Kingdom. If all goes well, users in every Saudi city will be able to enjoy Keeta by the end of next year.