Chinese companies “shake up” competition in the app-based delivery market

The entry of Chinese delivery companies promises to shake up the app-based delivery market, with impacts for competitors, consumers and delivery people.

The giant Meituan, owner of the Keeta brand, announced investments of R$5.6 billion in the country. And 99Food, a Brazilian startup acquired in 2018 by the Chinese company DiDi Chuxing, plans to allocate another R$1 billion to increase its home delivery strategy by building a “superapp”.

The billion-dollar investments aim to capture a large part of the Brazilian market, made up of around 1.2 million establishments, of which 71% operate with the delivery method, according to data from the Brazilian Association of Bars and Restaurants (Abrasel).

“Competition will affect the market, companies, workers and consumers,” says consultant Paulo Renato Fernandes, a professor at Fundação Getulio Vargas (FGV-RJ). “But any investment coming to Brazil is excellent. Above all, we need investment in technology. If they bring it, it will be spectacular.”

Biggest impacted, iFood says it is prepared

The company that is likely to be most affected by the arrival of the Chinese companies is iFood, which accounts for 80% of the country's deliveries. In Brazil, the platform faces marginal competition from Rappi, which is also planning to expand operations, with a planned investment of R$1.4 billion over the next three years, 40% of which will be allocated to restaurant deliveries.

Last week, iFood announced a partnership with Uber to integrate the apps. iFood users will be able to order Uber rides without leaving the app, and on the Uber platform, it will be possible to access iFood delivery services.

Rafael Corrêa, head of institutional communications at iFood, says that the initiative was already being designed before this debate about competition began. “By integrating services into a single environment, we offer more convenience.”

Recently, the company launched the campaign "iFood is Everything for Me", which reinforces its role as a complete convenience platform, integrating supermarkets, pharmacies, beverages, pet shops and other retailers.

It also invested in supporting the growth of partner businesses with iFood Pago, which facilitates access to credit, generating a 37% increase in restaurant membership in January.

“The Brazilian market is dynamic and competitive, but it also offers great opportunities for those who understand local needs and invest in customized solutions,” says Corrêa.

Meituan is known to be aggressive

Confronting the Chinese strategy, however, will not be a trivial challenge. The weapons selected by the Asian companies include zero taxes for bars and restaurants, promotions for consumers, integrated service tools, and the capture of the network of workers, currently estimated at 6 million across the country.

Meituan is known for its aggressiveness. The brand dominates the food delivery market in China and has managed to oust its main competitor in Hong Kong, where it is worth more than R$600 billion on the Hong Kong Stock Exchange. It also does business in Saudi Arabia.

Since its 2023 debut in Hong Kong, Keeta has captured 44% of the local delivery market in less than a year. The meteoric rise directly contributed to Deliveroo’s exit and cemented a duopoly with local company Foodpanda.

The brand's entry into the city, just a few months after the end of pandemic restrictions, was supported by robust capital injections. The strategy involved a veritable price war: aggressive discounts for consumers and more attractive salaries for delivery drivers.

The impact was immediate. Within three months, rival platforms Deliveroo and Foodpanda were struggling to recruit workers. Within a year, Keeta was responsible for 85% of orders and Foodpanda for 10%. In March 2025, Deliveroo announced its exit from the market.

Consumers recognize price and agility

For Hong Kong consumers, the Chinese brand's offensive was well received. Combined with competitive prices, technical support and the platform's agility, residents prioritized Keeta's services, highlighting the company's origins, even with relations between the two countries marked by political tensions and growing attempts at control by Beijing.

Paulo Renato Fernandes, from FGV, says that gaining market share in any segment worldwide follows market logic. “You open a business, and soon a competitor comes along and opens another business offering lower prices — that’s capitalism,” he says. “I think that, this way, everyone wins.”

Even so, in the case of Hong Kong, the dominance of Chinese capital has raised questions. Experts warn that the strong concentration could drive away foreign investors and reduce competition in the long term, reported the Hong Kong Free Press , an independent local newspaper.

Restaurant owners also told HKFP that they were facing new pressures. A week after Deliveroo’s exit was announced, Keeta raised its commission rate from 25% to 28% on delivery orders if establishments did not sign exclusivity agreements — that is, prevent partnerships with Foodpanda.

Cade can prevent unfair competition

The measure was seen as a move to consolidate dominance and opened the debate on predatory practices in the Brazilian market.

For Competition Law specialist Francisco Zardo, from Dotti Advogados, the law that regulates the Brazilian Competition Defense System establishes penalties for strategies that prevent the establishment of other players.

If proven, the Administrative Council for Economic Defense (CADE) may order decentralization actions. Zardo notes that the European Union frequently imposes sanctions on large technology companies that adopt a market dominance stance.

“Now, the demonstration of this is very complex,” he says. “And regulatory measures to avoid market control cannot prevent free competition.”

In 2023, Cade itself reached an agreement with iFood to limit the platform's exclusivity contracts with restaurants.

It was a response to the “open delivery” system implemented by the company in 2021, which standardized communication between restaurant management systems and those used by delivery platforms. In practice, the system served as a barrier to entry for iFood’s competitors.

The agreement with Cade opened space for new business and led iFood to focus its efforts on the interior of the country.

Scenario for delivery people is more complex

The impact on delivery workers has also been observed. Fernandes believes that the scenario is promising, with an increase in supply and higher wages.

“I think this system will make the competition more advantageous for workers, with more options and possibilities for the delivery drivers themselves,” he says. “They can earn two, three times more with the competition between the apps, which is already happening.”

The Hong Kong experience paints a more complex picture. The initial promise of high earnings—about HK$40 (HK$5) per order—was short-lived. By April 2025, the average had fallen to HK$20. Part of the pay was now dependent on weekly targets, such as minimum number of deliveries or on-time rates.

Competition has also increased within the platform itself. Keeta’s scoring system, which rewards the most active with preferential access to orders, leads to constant competition between delivery drivers, exhausting routines and increasingly tight earnings.

Under the country's law, delivery workers are classified as independent contractors. This means they do not have access to employment protections such as accident insurance or rights in the event of dismissal.

Critics say it is a "race to the bottom", driven by the company's search for profitability to recover its initial investments.

"Shaking" can help organize delivery people

Paulo Renato Fernandes believes that the movement in this market can favor the union of “platformized” workers, who are now the majority. “They can demand their rights together, through unions or cooperatives,” he says.

Today, delivery workers are represented in a diffuse manner, through regional leaders and associations. The government tried to regulate app-based work with the parties involved, but delivery workers did not reach an agreement and were left out of a bill that has been in Congress since last year.

“It’s still in its early stages, but when they realize the potential of organizing, they will have a world of possibilities,” says Fernandes. One of them, according to him, is to create their own platforms and work through cooperatives.

iFood says it is willing to resume discussions on the regulation of delivery drivers to “build solutions that take into account the sustainability of the sector, the autonomy of partners and the expansion of rights”.

The company's dialogue with the government was compromised after the Minister of Labor, Luiz Marinho, classified, in 2024, the iFood system as “highly exploitative” .

President Lula has also publicly criticized the work model adopted by iFood. In September 2023, the president stated that the working conditions imposed by digital platforms on delivery workers are "almost slave labor."

Lula did not hesitate, however, to pose alongside the founder of Meituan, billionaire Wang Xing, during his official visit to China last week, in a photo that went viral on social media.