The delivery market war in Brazil between companies has gained another chapter. After being accused of espionage by iFood , Keeta, a platform controlled by the Chinese company Meituan , decided to counterattack the market leader. And the strategy involves reducing the number of restaurants that can only offer services to the competitor.
Keeta 's plan is to pay the exclusivity penalties to medium-sized restaurant chains with up to 30 stores in Brazil that had contracts to operate exclusively on the platform of the company led by Diego Barreto.
In the case of food chains with more than 30 units, the Administrative Council for Economic Defense (Cade) has already prohibited the maintenance of this exclusivity, having signed a Commitment to Cease and Desist Agreement (TCC) with iFood in 2023.
The Brazilian branch of the Chinese company does not disclose the number of restaurants that have already opted to terminate their contracts with iFood, but some fines paid by Keeta exceed R$ 1 million.
“Many restaurants have been contacting us, asking for help to break these exclusivity contracts. This means paying the penalty so they can get rid of this rule. We are already doing this,” says Danilo Mansano, vice president of Keeta in Brazil, in an interview with NeoFeed .
According to the company executive, the equation is based on the cost of the fine and the network's growth potential following its entry onto the Chinese platform. "This investment is worthwhile because it will increase revenue with another platform to operate on," he states.
However, there is one condition for Keeta to pay the full fine: that the restaurant does not join the 99Food platform, a competitor that also entered Brazil last year to compete in the market.
“To pay the full amount, he can’t join 99Food. That’s why we have another model, which is to pay half the fine, then they split the bill. Because otherwise we’ll be paying for other platforms to use. It’s not fair,” says Mansano.
Today, Keeta claims to be in talks with at least five food service chains every week. Not all of them necessarily agree to pay the fine, but in most cases, the agreement moves forward. “The negotiation time is sometimes long. The first agreement took more than three months,” says Mansano.
According to the vice president, 99Food also engages in an anti-competitive practice, which is to demand a ban on access to Keeta when closing contracts with networks. In this case, the Chinese network Meituan will not act to eliminate this barrier. "We don't have commercial relations with anyone who has this ban."
The company's new strategy is a way to offset the impact of the difficulties Keeta has been facing in advancing the implementation of its service in metropolitan areas. In March, the company postponed its entry into Rio de Janeiro, arguing that there was a "closed market" for other players.
Mansano acknowledges that entering the Brazilian market was more difficult than the company anticipated, precisely because, according to him, they encountered a closed market in many cities and the difficulty in attracting new restaurants, already committed to iFood or 99Food.
“More than 50% of the restaurants relevant to consumers in São Paulo today cannot be included on the platform. In Rio de Janeiro, it's more than 55%. And we only discovered this number in the São Paulo capital when we were already operating. This harms both restaurants and customers,” he says.
With this, the executive states that Keeta will only expand to more cities after these issues are resolved by CADE (Brazil's antitrust authority). "We will only go to the largest metropolitan regions when Brazil has clarity about the environment it wants from the point of view of an open delivery market," he affirms.
NeoFeed revealed in a June 15th report that the three platforms will begin competing simultaneously in a second city, Santos, on the coast of São Paulo state, starting in July. Until then, the companies only competed in the market in the city of São Paulo.
Today, Keeta operates in 11 cities, all located on the coast and in the metropolitan region of São Paulo. Both iFood and 99Food have accused their rival of anti-competitive practices due to the Chinese platform's aggressive strategy of distributing coupons with high values and a large volume of discounts.
“It’s very easy for platforms with a large user base to say that offering coupons is anti-competitive. Ask the consumer. Keeta does this to increase its user base. We just arrived in Brazil,” he says.
The executive states that the company has the cash to use in this strategic plan. When it entered the country last October, Keeta revealed that it would have R$ 5.6 billion to get the operation up and running.
“When we open up a country, we don’t go back. The money is already here. The company has the resources for this. Keeta has the patience to grow the delivery market in Brazil,” says Mansano.
Regarding the lawsuit filed by iFood accusing Keeta and Meituan of spying on and paying current and former iFood employees to obtain sensitive information, the vice president denies the practice and says it's a "smokescreen" from the competitor.
"In the same week that they publicized this case, Cade opened an investigation against iFood regarding restaurants being retaliated against for breaking contracts. This accusation of theirs is unfounded," he states.
Regarding the @meituan.com domain, associated with emails that allegedly participated in these meetings, based on information provided by the Zoom platform, Mansano says that "this means nothing." "Anyone in the tech world knows this doesn't mean anything."
