In this episode, we dive into Didi’s launch of its food delivery service in Goiânia through its local brand 99Food — and why it did so before Meituan’s Keeta.
Tune in as we unpack:
- Didi’s decision to launch in Goiânia, a mid-sized city, over São Paulo;How past experience in Brazil shaped Didi’s approach;Will we see a repeat of the 2017–2018 Meituan vs. Didi battle;Whether Didi’s existing fleet and org structure give it an edge
Competition is heating up in Brazil’s food delivery scene, and it would definitely be an interesting battle to watch.
00:00:49 – Why Didi chose to launch in Goiânia, not São Paulo?
00:01:55 – Did Meituan force Didi to accelerate its relaunch?
00:03:03 – What Didi learnt from the 2019 failure
00:05:07 – Didi vs Meituan battle in China, 2017–2018
00:08:01 – What about iFood, the 90% incumbent?
Also available on Spotify and Apple Podcast
[AI-generated Transcript]
[00:00:00] Jianggan: Think was that in the city of Wuxi, in my province? Mm. I mean a small city of 10 million people. Um, yeah. Small city. 10 million people.
[00:00:10] Sabrina: hi everyone and welcome to the Impulso podcast by Momentum Works. So today it’s almost the fourth episode where we’re going to be talking about Brazil in a year because Didi has just launched food delivery this Monday, or by the time you’re watching it last Monday on ninth June in Goiânia.
[00:00:27] Jianggan: you been there?
[00:00:28] Sabrina: No. I had to Google how to pronounce, how to pronounce it. Yeah. Goiânia
[00:00:34] Jianggan:It’s a, it’s a small city. Uh oh no, it’s not really small city. It’s like a 1.5 million. Yeah. 1.4, 1.5 million. Yeah. But Asian standard, quite small. Um, it’s the 10th largest city in Brazil, uh, uh, located in the center of the country.
[00:00:47] Jianggan: So that’s the first city that is launching.
[00:00:49] Sabrina: So DiDi has launched in Goiânia. Why do you think they chose to launch in, like you said, the 10th largest city? Instead of a bigger city
[00:00:57] Jianggan: first. Why would you launch in a bigger city first,
[00:01:00] Sabrina: I, bigger population, higher density.
[00:01:03] Jianggan: Yeah. I think, uh, I think this launch is a, is a test.
[00:01:06] Jianggan: Um, so, so basically when you test, you try to do that in an environment where it’s easier to control. Mm-hmm. And that’s, that’s actually a strategy, um, tested by, uh, many players. You, you look at me, Keeta, when they first launched in, in, uh, Saudi Arabia, they started in the city of Al-Kharj, which is, uh. Um, I think fairly small city, but once they, the test validate, see how the whole process, the product works and, uh, and they’ll expand very quickly across the country.
[00:01:34] Jianggan: So,
[00:01:35] Sabrina: so you test in a smaller, smaller field sample testing?
[00:01:40] Jianggan: Yeah, but once you, you have finished the test, uh, you should very quickly, uh, go into the bigger cities. Sao Paulo, et cetera.
[00:01:48] Sabrina: Mm-hmm. So it’s likely that we’ll see Meituan sort of doing something similar, right? Because they have announced their intention to enter Brazil as well.
[00:01:55] Jianggan: I think many people in China believe that, uh, Didi accelerated their plan to do it in Brazil, um, because Milan is doing that ’cause they want to stay ahead of Meituan
[00:02:05] Sabrina: because, I mean, this is not the first time that it is entering food delivery in Brazil. Right. They entered a couple of years back
[00:02:12] Jianggan: 2019. 2019. End of 2019.
[00:02:14] Jianggan: So. And, and, and at that time they already had some reasonable presence in Mexico. Um, I think internally they discussed whether they should like, you know, really, really, I mean, ramp up to win Mexico, or they should also expand to Brazil, which is a larger market. I think Brazil population, like twice that of Mexico.
[00:02:32] Jianggan: Um, I think the team wanted to do Brazil. Uh, so the, the leadership said, sure, fine. You, you, you go and do it. And that’s the end of 2019. And, uh, but I felt that, uh, from an organization point of view, um, they were not very sure how much they should invest in Brazil. ’cause they didn’t have the chance. Mm-hmm.
[00:02:51] Jianggan: Right. They never had full resources. And a few months after launched COVID hit. Mm-hmm. And COVID is supposed to be
[00:02:59] Sabrina: help you accelerate this Yes. Support delivery business at all.
[00:03:03] Jianggan: Right. Of course it creates lots of demand. Yes. But, um, but for them it’s just a few months into, into operations. So the, the infrastructure is not ready to catch that demand.
[00:03:11] Jianggan: So that opportunity, they didn’t manage to catch,
[00:03:13] Sabrina: but of course now I think this time round, Didi is a lot more confident in terms of they have a pretty large fleet. So obviously they had the riders on the Didi app.
[00:03:23] Jianggan: Yes. They have the mobility, right? They have the mobility, yeah. Which
[00:03:26] Sabrina: they can engage to do food delivery.
[00:03:27] Sabrina: And of course they also have their long term executives leading this now, right? Mm-hmm. Who are the. Both names
[00:03:35] Phyllis: I think announced publicly. No,
[00:03:38] Jianggan: no, no. I mean, there’s no point for them to announce publicly, but, uh, but yeah, there, there are, there are, there are a group of people who have been working with Didi in Latin America for about 10 years, and they’re leading this, I mean, it shows that the organization is serious about this launch.
[00:03:52] Jianggan: Um, and, uh, I think they also have some pretty, uh, capable executives who are hired locally. Mm-hmm. Or who have been with, the acquired company in 99 for a while. So, um, so I, I think, I, I think overall we would compare the teams of Didi Andan. I just feel that, uh, Didi people are, they’re much more international.
[00:04:14] Jianggan: So many of them, I mean, many of the Chinese executives on Didi are hired from Hong Kong investment banks, or hired from, uh, MNCs. So, so they have sort of. I mean, compared to many executives we have seen, I mean the Didi ones will speak better English. They have experience communicating with people outside China.
[00:04:32] Jianggan: Um, yeah. So, so that’s probably one advantage that they have. Um, so I think
[00:04:37] Sabrina: another advantage is that Didi has been in Brazil for a while, even though it’s not food delivery. They have been operations there, there since 2018, whereas this is made one’s first venture into Brazil. Yeah. So there would definitely be some advantage there in terms of at least knowing the market.
[00:04:52] Jianggan: Yeah. The, the question is that how do you turn that into actual advantage? Right? I mean, you could, I mean, the, the existence, uh, structure could also be a baggage if you don’t use it effectively. That’s true.
[00:05:02] Sabrina: But of course, this is not the first time that we see Didi made on competing at this scale. Right?
[00:05:07] Sabrina: Yeah. The last time was, I think 2017. 2018, yes.
[00:05:10] Jianggan: 2017. That was much larger scale, so it was like crazy than me.
[00:05:13] Sabrina: So that was in China where started. They piloted their ride hailing. Yes. And then Didi also tried entering food, food delivery in China.
[00:05:22] Jianggan: And uh, there was a famous, uh, famous saying that Didi, founder Cheng said back then, he said, oh, if you want fight, let’s fight.
[00:05:30] Sabrina: And they did. They burned a lot of money, I think. Yeah. A lot of subsidies. Subsidies a lot of, like
[00:05:35] Jianggan: someone was telling me that, uh, that each of them were burning about, um, 20 million rmb a day. Which is smaller than what, what JD is burning on for delivery now. But, but, but the standard then it was like pretty aggressive I think.
[00:05:49] Jianggan: Was that in the city of, in my promise, I mean a small city of 10 million people. Um, yeah, small city million people. So, so when JD was attacking Meituan there, I think Meituan is like fair riders by chance or by, by law into the city to defend. Just, just to make sure that merchants on Meituan have the. Have enough, uh, sort of fulfillment capacity.
[00:06:13] Jianggan: So, so, so they build this network. Right? Right. Uh, whenever there’s a city on attack from Rival, they could quickly send people from other cities to, to Interesting. Yeah. That’s, that’s not the
[00:06:23] Phyllis: mobilize. Yeah. There’s something that we talk about in another of our podcast episode. We say that, um, in larger countries like this, there is usually an over subline rider.
[00:06:34] Phyllis: So, so they can move them around more easily. Easily,
[00:06:36] Jianggan: yeah. Yeah. And of course in China you have the expressway, you have the high speed rail, it’s even easier. And, uh, yeah, so I, I mean this discussion I’ve discussed with, uh, lots of executives in Southeast Asia as well. Mm-hmm. And, uh, the, their challenge is, I mean, is Southeast Asia is a lot of the economies ated in capital cities.
[00:06:54] Jianggan: So you don’t have a, a depth, strategic depth that you can, you can defend,
[00:06:59] Sabrina: but it’s unlikely that we’ll see a very, such a similar strategy play out between Didi and obviously the economic environment now is very different from what it was in 20 17, 20 18.
[00:07:10] Jianggan: Uh, you must have, are much more demanding Yes. For you to show results.
[00:07:12] Jianggan: And of course, course
[00:07:13] Sabrina: these companies are also a lot more our eye focused now. Right. They wouldn’t burn as much money.
[00:07:18] Jianggan: Or rather, I mean, whatever money they burn, they need to have very, very strong justification. So they can’t just say that, okay, I want increase market share, therefore I bring money. So, so they need, have, they need to have had done the calculations.
[00:07:31] Jianggan: So what RI of this money that, I mean, everybody has this, uh, I mean, Temo has this, TikTok shop has this, everyone’s forced to calculate what their RII think you and I, we, we, in a few workshops, we talk about ROI and investment. They, they try to track everything. Hmm.
[00:07:47] Sabrina: It’s interesting ’cause we discuss this topic a lot and I feel something that we always don’t, something that people don’t mention as much is, of course, the current player in Brazil, which is, so like you said, they have a 90% market share, almost 90% market share, right?
[00:08:01] Phyllis: Mm-hmm.
[00:08:02] Sabrina: But when we bring up this discussion of it, or entering food delivery in Brazil, people tend to forget about I food that’s already there. No, no,
[00:08:11] Jianggan: no, no. People don’t forget about them. I mean, they’re there. I mean, it’s just
[00:08:14] Sabrina: in the back of your.
[00:08:16] Jianggan: I mean, it, it is there, right? I mean, uh, no, obviously, uh, the company has been around for a long time and uh, and uh, they, they, they managed to kick out all, all the competitors to build this market share.
[00:08:26] Jianggan: So, so they, they, they, they’re pretty formidable. Um, but I think because ’cause, ’cause it is preoccupation is really meituan, right? Um, because they already have the advantage. I mean, if Meituan enters there and, and do something ahead of Didi and I think they’ll face lots of pressure because. Especially ’cause I think they probably have very similar investor base.
[00:08:47] Jianggan: So, so I, and also a few months ago I heard that Didi was planning to, was really thinking very hard saying, okay, where will may possibly expand to, is there any country, even including some countries in the Middle East where we can actually go in first? So, so, so, so that’s their pre preoccupation. Just
[00:09:05] Sabrina: trying to beat other you guys for turning into another episode of the Impulso podcast.
[00:09:10] Jianggan: Yes. Uh, funny enough that we have done a poll on WeChat,, so we’re asking people,, who do you think will win the, the food delivery war in Brazil? So, of course, I mean, it’s on WeChat, so it’s most the audience, I think the audience who voted, uh, our Chinese, I suppose. So we had, uh, oh, by now it’s like 500 votes. Um, about. 60%, uh, would vote, have voted for either Meituan or Didi and about 15% voted for Mixue.
[00:9:45] Sabrina:Why is people are thinking that?
[00:09:50] Jianggan: Okay. Oh, now, I mean, you have, uh, you have all this like, uh, Chinese background, uh, for delivery players entering there. Mm-hmm. And, uh. They, they, they’re gonna need key accounts. They’re need to go in the chain stores who can actually, actually help them build up the volume. Ah, and of course, um, I, I do think that if food has a, has a, has a very firm grasp of the, of the existing chains there.
So, so for Australian, some of the Chinese chains to, to be in a market is probably something that, uh, Meituan has been thinking about that, that’s probably also why I think once she, the founder of Mixue showed, showed up the same time as the main executive to meet the Lula.
[00:10:30] Sabrina: We hope that you guys enjoyed this episode, and if you did, do like and subscribe to our YouTube channel or newsletter to stay up to date on the latest happenings and trends in tech, new retail, and the broader digital economy. Bye-bye. Thank you.
The post 99food vs. Keeta, Quem vai ganhar? | Impulso E121 first appeared on The Low Down - Momentum Works.
