On Monday 9 June, Didi kickstarted its food delivery operations in Brazil through 99food brand. The launch took place in Goiânia, a city of 1.5 million residents in central Brazil.
The launch came after two months of preparations, and ahead of Meituan’s Keeta starting their own operations in Brazil.
A few thoughts and pointers:
- The choice of Goiânia is certainly for a test run before rolling out to bigger cities – a senior 99/Didi executive explained to local media that Goiânia to the local media that Goiânia was chosen because the city’s medium-sized market means that the knowledge acquired in this pilot phase can be replicated in other cities at a later stage. Meituan’s Keeta validated in Al-Kharj (Pop: 460k) before aggressive roll out across Saudi Arabia;
- We were asked a number of times recently about whether Meituan has plans for Southeast Asia, and if so, how local players should react. News also came yesterday that Grab said it and GoTo “are not involved in any discussions at this time and Grab has not entered into any definitive agreements”. Would a potential Grab-GoTo merger have created fewer, or more incentives for outsiders to come in and disrupt? And do not forget Shopee still has a sizable food delivery operation in Indonesia.
If the pilot in Goiânia is successful, that ‘later stage’ should come sooner rather than later. Didi should expand into the large cities (including São Paulo) rapidly to build up sufficient volume and density. That would be a much bigger test on leadership determination and organisational support. Didi’s first foray into food delivery in Brazil (2019-2021) failed partially because of the lack of these two – they would certainly have learnt from that episode; A number of long term Didi executives are leading the charge this time around, amongst them two Chinese (both names start with “M”) who have been working for Didi and In Latin America for a long time;
Didi’s primary goal seems to be countering Meituan’s entry rather than challenging dominant local player iFood. Prior to the Brazil launch, Didi also considered other countries for food delivery launch around Meituan’s path of expansion. In Brazil it already has a sizeable 2-wheeler mobility/deliveries fleet – that advantage might slide quickly if no actions are taken;
At the same, Meituan’s Keeta seems to be following its playbook of expansion with all the steps, with aggression. It seems determined to reach scale in Brazil at least before the presidential election in October 2026;
Didi’s battle with Meituan in 2017-2018 was epic – both launched into each other’s territories: ride hailing and food delivery respectively. Dozens of millions of yuan was burnt in subsidies every day and Meituan was at one point shipping riders by train loads from nearby cities to those under Didi’s assault. In the end, both withdrew into their areas of strength. Compared to that time, both companies are now a lot more focused on ROI instead of top line – so moves need to be much more calculated, and execution precise as well as ruthless. It would be an interesting battle to watch;
In the pre-launch party a week ago, 99food’s riders in Goiânia enjoyed a buffet of food while listening to the Didi executives telling them about the future. They are promised a daily earning of R$250 (US$44 – for ferrying both passengers & food) and restaurants are promised zero commission for 2 years.
For many in the sector across the world, that level of excitement has not been seen for a while, and would certainly not last very long.
The post China’s Didi starts food delivery operations in Brazil, ahead of rival Meituan first appeared on The Low Down - Momentum Works.
