Naspers is prepared to sell down its R71bn stake in the world’s largest food delivery company following moves by China’s Meituan to enter Brazil, a market in which the JSE-listed group is already dominant.

In May, Chinese technology and delivery giant Meituan said it was preparing to launch its food delivery service, Keeta, in Brazil. The company plans to invest $1bn (R17.78) over the next five years to establish and expand its operations in the country. This expansion marks Meituan’s entry into the South American market.

Competing forces

For Naspers, which holds a stake in Meituan of about 4%, the move presents a conundrum as it already operates one of the largest food delivery businesses in the region, iFood. Meituan’s entry would see two of its associated companies directly competing in Brazil.

During an investor call late on Monday, Naspers and Prosus CEO Fabricio Bloisi said the group may sell part of the stake in Meituan, using the funds to invest in its own e-commerce businesses. The former iFood CEO is bearish about the Chinese company’s ability to crack the Latin America market, saying there is a high chance of failure.

“Our strategy is to invest more in companies that reinforce our ecosystem and we are going to keep doing that aggressively. I think Meituan has less probability of winning internationally,” said Bloisi

“They’re going to face some tough competition. As a Meituan shareholder I’m disappointed because their risk of failing increases. Therefore, we might sell part of the Meituan shares, [to invest] in other areas with more connection to our existing ecosystems.”

Such a move is likely to unlock a big cash pile for Naspers, whose Meituan stake is valued about $4bn (R71.1bn).

Naspers acquired this stake in 2022 after Chinese internet giant Tencent decided to distribute its 17% stake in Meituan to shareholders.

The Cape Town-based group is Tencent’s largest investor, owning the stake indirectly via its Dutch-listed e-commerce business, Prosus.

“For example, if we say let’s invest more in some businesses in Latin America that we believe will reinforce our ecosystem, we could sell part of [our] Meituan shares, or everything that we think is reasonable, to invest more to reinforce our ecosystem,” Bloisi said.

“And we are going to do that, looking to our shareholders. If we have opportunities to grow faster and better than Meituan in some of our ecosystems, we will do it”.

For Meituan, this move is part a broader global expansion strategy, following its previous expansions into Hong Kong and the Middle East.

Naspers shining star in Brazil

Brazil’s iFood has become a star in Naspers’ portfolio as it works to unlock the value trapped in its portfolio outside Tencent, the biggest component in its more than R3-trillion combined valuation.

Prosus took full control of the business for €1.5bn in 2022, growing the enterprise to 100-million orders a month for the first time in late 2024, and increasing to more than 120-million orders in March of this year.

On Monday, the group reported that iFood delivered strong top line growth for the year to end-March 2025. Gross merchandise value, which reflects the total dollar value of all transactions on a platform, was up 32%, while orders were up 29% and revenue increased by 30%.

According to the group, iFood’s core food delivery business grew its adjusted earnings before interest and tax (ebit) by 71% to $306m, improving its adjusted ebit margin to 27%.

This performance has been attributed to higher advertising revenues, increased order frequency and retention driven by iFood’s Clube loyalty programme, and investments in its merchant platform.

Growth initiatives and investment helped to boost revenue by 34%, “driven by strong performance in its groceries marketplace and credit businesses”,

Overall, iFood achieved a record profit, with adjusted ebit of $226m, up 178%.