Historic? Historic. China’s number one delivery app, Meituan, wants the best of two worlds: the Middle East and Brazil. Here’s the story.
A whopping $1 billion investments!
China’s business relations with Brazil is rooted in history. Over the previous two decades, China has remained the biggest trading partner of Brazil, particularly in bilateral trade. In 2023 alone, the trade between these two countries, miles and miles apart from each other, reached $159.6 billion, with China accounting for almost a third of Brazil’s exports.
So, to bolster the strong trade, the Latin American country’s leaders are on the move. Recently, Brazil’s president, Luiz Inácio Lula da Silva traveled to China for negotiations. The result: deals which include a five-year $1 billion commercial agreement with Meituan. Yes, $1 billion.
But, it isn’t a one-sided deal, or something like sign-the-deal-or-else system in favor of Brazil. Even Meituan is very interested in venturing into Latin America, especially in Brazil. Experts are saying that Meituan’s presence in Brazil will “reshape the delivery industry in the country.”
Restaurant owners in Brazil are optimistic about this. For one, there’s Leonel Paim, the deputy president of a trade organization for bars and restaurants in the country, saying that there are opportunities for growth in Brazil, which Meituan’s would-be competitors cannot grasp. Meituan could transform the food delivery scene over the next years.
This competition is being looked at as a challenge, rather than a hurdle. It will push Meituan to “develop and bring delivery services to a whole new level.” It could prompt other players in the industry to offer better products and rates.
“Every bit of new competition makes us happy because it helps us,” meanwhile, stated Pedro Facchini, a restaurant owner in São Paulo who also recently met with representatives from Meituan.
What’s more, Brazil holds the largest share in the Latin American food delivery industry. Specifically, the delivery sector is projected to reach almost $21 billion in revenue by 2025’s end, and a staggering 90 million users, that’s right, by 2030, statistics reveal.
However, interestingly enough, some are not 100 percent confident of this investment. For them, the benefits will just be short-lived.
“In the beginning, they will be paying well, so they can gain [the trust of] delivery workers,” commented Edgar da Silva, a union group for delivery workers in Brazil.
Da Silva added that as the market stabilizes, Meituan “will become just like the others.”
“There will be no difference but in who exploits us more,” he added.
In the Middle East
It is not only in Brazil that Meituan is eyeing to expand, but also in the Middle East, which, considering distance, is relatively more feasible.
Chinese media also recently reported how Meituan is going all-out in the Middle East, framing their stories in such a way that Saudi Arabi and the United Arab Emirates are their “second growth engines.”
Meituan’s food brand Keeta has been operating successfully in Saudi’s key cities – Riyadh, Jeddah, and Dammam, so the expansion isn’t far from happening.
However, the issues are present. Markets are jittery – experts fear subsidy wars, while Meituan’s investors worry about cash burn. According to specialists, success hinges on scaling efficiently in high-value, logistics-friendly but labor-sensitive Gulf industries.
What do you think? Share your thoughts by creating that account on Ridesharing Forum today.