Steep competition in home market in China and operational issues here are slowing food-delivery app’s expansion.
About three months after launching operations in São Paulo, Keeta has postponed plans to expand to Rio de Janeiro and laid off employees hired for that operation. Valor has learned that, although exclusivity agreements with competitors have complicated the app’s expansion, strong competition in China and operational problems in Brazil have also weighed on the company’s progress in the country.
With investments of $1 billion — about R$5.2 billion at the current exchange rate — Chinese giant Meituan, which controls Keeta, announced the launch of the platform in Brazil in May 2025. The operation began with a pilot project in the coastal cities of Santos and São Vicente in the state of São Paulo and, in early December, expanded to the capital and metropolitan region. The launch in Rio de Janeiro had been scheduled for the first week of March.
In the last week of February, however, the company announced it would delay entry into the Rio market. Speaking to Valor, Keeta vice president Danilo Mansano said the Brazilian market is “broken” because of exclusivity clauses. According to him, these restrictions prevent more than 50% of restaurant chains in Brazil from working with Keeta.
The company has filed a lawsuit against 99 Food — controlled by Chinese firm Didi — over the issue. When 99 resumed its food delivery operations in Brazil, it included clauses in contracts with some restaurants requiring them not to operate with Keeta in exchange for financial benefits. In October last year, a São Paulo court issued a ruling requiring the suspension of the practice, but 99 appealed and managed to overturn the decision at the appellate level.
The issue has also been brought before the Administrative Council for Economic Defense (CADE), which has opened an investigation but has not yet issued a ruling. At the antitrust authority, Keeta is also following an administrative proceeding involving iFood and the Brazilian Association of Bars and Restaurants (Abrasel) over exclusivity practices. Paulo Solmucci, president of Abrasel, said the agency’s “sluggishness” is a concern.
“If CADE does not want to see the market close again, it will have to act swiftly,”
he said.
CADE’s General Superintendence (SG) is monitoring compliance with an agreement signed with iFood in 2023 that limits the platform’s exclusivity agreements with restaurant chains. In February this year, the SG requested explanations from iFood regarding alleged anticompetitive practices in the cities of Goiânia, Rio de Janeiro, Santos, São Paulo and São Vicente. iFood had until last Friday (6) to submit its response.
After the delay in entering Rio, the market was surprised by the layoff of more than 200 Keeta employees who had been hired to work in the city. In a statement, the company said the process was conducted “in full compliance with local laws and requirements.” It added that the decision regarding Rio was taken to “focus on improving service standards” and to “resolve structural issues that hinder healthy competition” in the market.
“I do not rule out that exclusivity agreements with restaurant chains influenced the decision, but my reading is that this was far from the main reason,”
said a market source. In this person’s view, the competitive pressures Meituan faces in China combined with operational difficulties in Brazil carry greater weight.
“They did not assemble a strong team here, which made interactions with restaurants more difficult,”
the source said. The company’s value proposition may also have caused friction, as its model charges establishments a fixed fee based on delivery radius, which may not provide an attractive economic return.
Another executive familiar with the matter also mentioned the situation in the Chinese market and added that the platform lacks strong regional brands in its ecosystem, which discourages consumers.
“It is a combination of factors,”
the executive said.
In China, Meituan’s main market, the company faces strong competition from other delivery platforms, especially Alibaba. In a statement released to the market in February, the company said it expects to post a loss between 23.3 billion yuan (R$17.7 billion) and 24.3 billion yuan in 2025, compared with a profit of 35.8 billion yuan in 2024.
Earlier this month, the rating agency S&P Global Ratings downgraded Meituan’s credit rating from “A-” to “BBB+” due to its “weaker competitive position” in China. In a report, analysts said “Meituan’s ability to defend and grow its market share has weakened.”
According to the report, while Meituan’s market share fell from around 70% at the end of 2024 to just over 50% by the end of 2025, Alibaba’s share increased from about 20% to roughly 40%. Analysts also said it is becoming more expensive for the company to retain or attract customers.
The agency lowered its forecast for the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) this year to between 20% and 30% of its 2024 peak, down from a previous estimate of 70%. Profit margins are also expected to remain lower in 2026 and 2027 compared with 2024. According to analysts, this scenario should limit the scale and pace of expansion in Brazil.
Contacted for comment, Keeta said intense competition in China is not new and does not affect its expansion plans or long-term commitment to Brazil.
“The delivery sector has been harmed by exclusivity clauses imposed by competitors.” The company added that “we will continue working for a more open, competitive and sustainable ecosystem.”
iFood said it fully complies with the Cease-and-Desist Agreement (TCC) signed with Cade and that the authority’s monitoring is “routine.” Regarding Rio de Janeiro, the platform said it is “incorrect” to claim that the city’s delivery market is closed. Meanwhile, 99 reiterated the court’s understanding that recognized the legality of its practices with partner restaurants.
Source: Valor International
