17-11-2023 (BEIJING) Meituan, China’s Largest Food Delivery Platform, Explores Acquisition of Foodpanda’s Southeast Asian Business (Beijing) – Meituan, China’s leading online food delivery platform, is reportedly considering the possibility of acquiring Foodpanda’s business in Southeast Asia as part of its diversification strategy beyond the Chinese market.
According to Bloomberg, sources familiar with the matter revealed on Friday (November 17) that Meituan has been in talks with Delivery Hero, the German parent company of Foodpanda, regarding the acquisition of Foodpanda’s Southeast Asian operations. It remains uncertain whether the two parties will reach a deal, and there is a possibility of other potential bidders emerging.
In September, Delivery Hero confirmed that it was in discussions to sell Foodpanda’s businesses in Singapore, Malaysia, Philippines, Thailand, Cambodia, Myanmar, and Laos. However, the potential buyer was not disclosed at the time.
There were speculations that Grab Holdings, the leading ride-hailing and food delivery company in Southeast Asia, could be a potential buyer. Analysts, however, pointed out that Grab already holds a significant market share in the relevant markets, and regulatory approval for its acquisition of Foodpanda would be a major consideration.
Bloomberg’s report on Friday highlighted that Meituan, founded in 2010, has become China’s largest food delivery platform, covering over 2,800 cities and counties across the country. In May of this year, Meituan expanded its operations to Hong Kong, launching a new food delivery brand called KeeTa. Meituan’s entry into Southeast Asia could pose a challenge to Grab Holdings, which has rapidly emerged as the market leader in the region. The Singapore-based company recently achieved profitability after a period of adjustments, and Meituan would be a significantly larger competitor to Grab than its current regional rivals.
Regarding Meituan’s potential acquisition of Foodpanda’s Southeast Asian business, Bloomberg Intelligence commented that it could pose a threat to Grab. Foodpanda holds a significant market share in Southeast Asia, accounting for 20% of the region’s total gross merchandise value in 2022.
“We believe Grab would be a better acquirer for Foodpanda compared to Sea Group and GoTo, which face competition and cash flow risks. Assuming Grab acquires Foodpanda, the deal would increase Grab’s market share from 40-50% to over 70%,” stated Bloomberg Intelligence.
