In a significant development, Meituan has announced plans to launch drone delivery services in Hong Kong, aiming to be among the first companies to operate a drone fleet in the region. This initiative was revealed by Meituan's vice-president, Mao Yinian, during an event at the Hong Kong University of Science and Technology on November 21, 2024. The company’s drones are expected to deliver meals in just 15 to 20 minutes, which is half the time required for traditional manual deliveries. Initial service locations include Cyberport and Hong Kong Science Park, pending government approval. [c39042ea]
The push for drone deliveries aligns with the Chinese government's designation of the low-altitude economy—defined as airspace below 1,000 meters—as a strategic emerging industry, a move announced in December 2023. Hong Kong's Chief Executive, John Lee Ka-chiu, has expressed support for the development of this sector, indicating a favorable regulatory environment for such innovations. [c39042ea]
Meituan's entry into drone delivery comes as the company continues to dominate the food delivery market in Hong Kong, with its app Keeta capturing over 40% market share in Q1 2024. However, the company faces stiff competition from major players like Alibaba, JD.com, and PDD Holdings, all of which are also vying for a share of the burgeoning e-commerce and delivery market. [c39042ea]
In addition to its drone initiatives, Meituan's delivery workers earned approximately 80 billion yuan (around US$11.3 billion) in 2023, reflecting the significant role that gig workers play in China's economy. The company has reported a 21.2% revenue increase in Q2 2023, reaching 82.3 billion yuan, and has also expanded its international services, launching operations in Saudi Arabia in 2023. [2ebe3624]
UBS has raised the target price for MEITUAN-W to $146, maintaining a bullish outlook on the stock due to its high earnings visibility and growth potential. The rebound of China's internet sector has been attributed to improved market sentiment and the anticipation of strong 1Q24 results, with Meituan adapting quickly to changing consumer behaviors and market dynamics. [716a5036]