How Hongkongers Fuel Chinese App Keeta’s Dominance in City’s Food Delivery Market

Table of Contents

1. Key Highlights
2. Introduction
3. The Shift in Market Dynamics
4. The Aggressive Pricing Tactics
5. Impact on Consumers and Restaurants
6. The Labor Perspective: “Race to the Bottom”
7. Keeta's Strategic Moves and Future Prospects
8. Conclusion: A Cautionary Tale
9. FAQ

Key Highlights

• The exit of Deliveroo from the Hong Kong market has paved the way for Keeta, a Chinese food delivery platform, to dominate local delivery services, controlling over 85% of takeout orders at some restaurants.
• Keeta's aggressive pricing strategy and substantial backing from parent company Meituan enabled it to capture significant market share through a "cash-burning" campaign, leading to concerns over competition and long-term implications for businesses and workers.
• As delivery workers flock to the Chinese platform for higher wages, fears arise about labor conditions and potential future price wars that could undermine Hong Kong's local delivery economy.

Introduction

In March 2025, a heavy cloud loomed over the Hong Kong food delivery sector as Deliveroo, a well-established platform, announced its exit from the local market. The announcement came just a week after restaurant owner Chris Chow received an ultimatum from Keeta—a new contender backed by China's Meituan, which demanded increased commission fees and exclusivity contracts from establishments like his. The exit of Deliveroo not only left an expansive void in the market but also fueled apprehensions regarding the increasing dominance of Chinese capital in Hong Kong’s economy.

Historically, food delivery in Hong Kong has been characterized by fierce competition, but the recent exit of a significant player illustrates a worrying trend. The ramifications extend beyond mere business interests; they affect the local economy, consumer choices, and ultimately, the livelihoods of delivery workers. This article explores how Keeta leveraged its entry and aggressive pricing strategy to become a dominant force and what this means for the future of food delivery in Hong Kong.

The Shift in Market Dynamics

When Keeta launched in May 2023, shortly after Hong Kong lifted its pandemic restrictions, it employed a strategy focused on rapid market penetration, offering significant discounts to attract both consumers and delivery workers. This approach was so effective that months later, more than 85% of takeout orders at Chow's restaurant in Kwun Tong were processed through Keeta—despite many of his customers initially claiming allegiance to Deliveroo.

Chow's experience reflects a broader trend. Business owners observed that Keeta’s discount pricing and attractive pay for workers significantly drew clients and riders away from competitors like Deliveroo and foodpanda. "When you’re purchasing the same product, there’s no reason for you to choose the one that costs a few dollars more," Chow remarked, highlighting the practical consumer mindset in terms of pricing.

The Aggressive Pricing Tactics

Keeta’s strategy, often described as a "cash-burning" campaign, involved deep losses leveraged by substantial investment capital from its parent company, Meituan. Within just ten months of entering the market, Keeta secured a commanding 44% market share by order volume, overshadowing foodpanda and Deliveroo, which held 35% and 21%, respectively. This rapid ascent was compounded by Keeta’s aggressive recruiting of delivery workers, attracted by promises of higher wages and commissions.

A former delivery worker cited that Keeta offered rides at around HK$40 per order initially, which has since plummeted to as low as HK$20 as competition for orders intensified. This drop can be linked to Keeta's need to stabilize costs and adjust its strategy in the face of its growing dominance. The platform also launched an “earnings guarantee” program, offering orders but with stringent performance expectations, creating a precarious work environment for delivery staff.

Impact on Consumers and Restaurants

While consumers have benefited from lower prices due to Keeta’s market disruption, the strategic shift from a competitive landscape to one potentially dominated by a single entity raises significant concerns. Restaurant owners like Chow noticed an immediate drop in business when Deliveroo exited the scene, as many patrons opted for the cheaper Keeta platform despite their previous brand loyalties.

Such changes catalyze questions regarding consumer choice in the long-term. Chow explained that while many diners claim they would prefer to support local platforms, price sensitivity tends to silence such sentiments. “In this sense, Hongkongers are very pragmatic, and they can understand what benefits them," he added, reflecting a prevailing attitude in favor of lower prices even against possible concerns about the source of the capital behind the platform.

The Labor Perspective: “Race to the Bottom”

A significant pointer in this dynamic is the impact on labor. With Keeta and foodpanda both vying for a dwindling pool of riders, conditions for delivery workers have become increasingly precarious. Many delivery workers accuse Keeta of maintaining poorer labor conditions compared to its competitors, hinting at a "race to the bottom." As Justine Lam, from the Riders’ Rights Concern Group, noted, growth in salaries during peak hours seems overshadowed by the platform’s demanding expectations and an overarching fear among workers regarding possible job security.

The implications of Keeta's entry and market behavior might put pressure on delivery workers, narrowing their options as the two dominant players continue to vie for market control. Notably, those who refuse the stringent requirements risk facing diminished opportunities altogether.

Keeta's Strategic Moves and Future Prospects

Understanding Keeta’s trajectory in Hong Kong laid bare the broader implications of Chinese capital's encroachment on local economies. The financial strategies employed by Keeta, leveraging significant investments to outpriced competition, could pave the way for similar movements across different sectors. As Keeta seeks to replicate its success in regions like Saudi Arabia, it must confront the same competitive frameworks that drove Deliveroo to exit Hong Kong.

Critics argue that the influx of Chinese tech giants deploying aggressive pricing could deter foreign investment and disrupt local markets. “If [Hong Kong’s] entire delivery platform economy becomes dominated by Chinese capital… it will be hard to attract foreign investment,” Chow cautioned.

Additionally, the forthcoming arrival of competitors like JD.com could restart the price wars, exacerbating the existing issues within the labor force and leading to an unsustainable cycle of instability within food delivery services.

Conclusion: A Cautionary Tale

The rise of Keeta in Hong Kong's food delivery scene illustrates an archetypical narrative of capital-driven dynamics at play in competitive markets. While consumers may enjoy immediate benefits from lower prices and better service, the overarching consequences for restaurants, delivery workers, and the market at large warrant a careful examination.

As the story unfolds, the question remains: what does a hyper-competitive landscape driven by significant investment ultimately mean for the principles of fair competition, labor rights, and consumer choice within the city? The situation serves as a stark reminder, showcasing the delicate balance between consumer benefits and the overarching need for sustainable market practices.

FAQ

What led to Deliveroo's exit from Hong Kong?

Deliveroo's exit was largely attributed to an intensified competitive environment, characterized by heavy discounting from the Chinese platform Keeta. The company indicated that sustaining a profitable scale would require considerable financial investment, which was not aligning with their projected returns.

How productive has Keeta been for restaurant owners?

Although Keeta's aggressive pricing has boosted order volumes for many restaurant owners, it has also led to increased commission demands. Owners must often choose between higher costs and being submerged in a competitive pricing war.

What challenges do delivery workers face in the current environment?

Many delivery workers feel compelled to accept lower wages due to the economic pressure of competing platforms. The conditions may also deteriorate with the emergence of more competitors, potentially leading to exploitation and precarious job security.

What measures could mitigate the disadvantages of labor in the food delivery industry?

Improved recognition of delivery workers as employees rather than independent contractors could enable them to access legal protections, including minimum wages and benefits, which would provide them with greater security in this volatile industry.

What may be the strategic direction for Keeta moving forward?

Keeta is likely to continue its aggressive pricing strategies aimed at maintaining market dominance while potentially expanding into new markets. However, balancing sustainable labor practices and financial viability will be crucial for its long-term success.