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The Rise of Food Delivery in the Arab World

posted on: Jul 12, 2020

The Rise of Food Delivery Platforms in the Arab World

By: Noureldin Mohamed/Arab America Contributing Writer Your food is on its way” has been one of the favorite sentences among Arabs nowadays. As food delivery becomes more prominent in the Arab world, businesses and phone applications are growing simultaneously. Fast delivery and fresh food at great prices is an eye-catcher for anyone. In addition, this form of consumerist orientalism is a growing trend—it credits the Arab world for excellent start-ups allowing for investment and possibly even an end to hunger in their own backyard.

According to digital market outlooks, “the Online Food Delivery segment is expected to show a revenue growth of 14.6% in 2021. Growing from 254 million to almost 950 million in revenue with a user penetration rate increase of 8%.” 2017 was the highlight year for these applications, starting with an application called Talabat (طلبات).  Talabat was started by a group of young entrepreneurs who wanted to make ordering food an easy experience in 2004. They envisioned an online platform people could use to order delicious food in a few taps and later launched Talabat Kuwait. Do not make the mistake of mixing food-ordering applications and delivery ones. Unlike Carriage, for example, Talabat only offers a platform where people can easily order food and restaurants manage the delivery.

Entrepreneurship in Food Delivery Platforms 

The Rise of Food Delivery Platforms in the Arab World

According to Business Year, “food delivery applications are used by over 6 million people across the Kingdom of Saudi Arabia alone, making it the largest food delivery market in the MENA region.” This has not only benefited the Kingdom, but also allowed for competition with its neighbor country—the United Arab Emirates. In addition, most of the service applications that are mentioned below have started earlier than when they were launched. This gives future Arab entrepreneurs hope that anything is possible in our digital age. Will you be next?

To begin with, most of the apps have come from the Gulf region, especially from the UAE. Even though foreign and American delivery services like UberEATS and Postmates took the reigns in the beginning, home-grown applications are proving that they can show the same growth, if not more. Talabat was acquired by a small shareholder company of a bigger, German giant called Delivery hero for 52 million euros.

Founded in 2016, Kuwaiti food delivery startup “Carriage” has quickly spread across the Gulf region and plans to expand to the larger MENA region. It has set up companies in the UAE, Bahrain, and Qatar.

In 2017, Carriage was acquired by Delivery Hero for $84.8 million, representing a strategic investment in the MENA and GCC region. Several startups have only been allowed a year or two for growth, before selling it to bigger companies as a type of healthy investment. Not only will this expand Arab entrepreneurship, but it will also prove beneficial to consumers. Adequate management, consumer trust, and easy satisfactory results are the goal of most service platforms. In Dubai, food delivery is of utmost importance because of the intense business life in the city which requires an on-the-go lifestyle. With each application differing in usage, delivery quality, speed, and pricing, competition is high.

The Egyptian minority start-up “Careem” has also begun acquiring multiple food-delivery platforms as part of its delivery and human mobility enhancement project. Popular demand in Gulf countries like UAE and Kuwait allowed for exposure and the creation of the Careem option, CareemNOW. According to Reuters, “Careem said in June 2018, it would accelerate expansion plans after raising $500 million from investors, including German carmaker Daimler and Saudi Arabia’s Kingdom Holding.”

Applications like Deliveroo, Otlob, and Mrsool are on the rise in several countries in the Arab world gaining confidence by both investors and consumers, alike.

The Role of Food Delivery and World Issues

The Rise of Food Delivery Platforms in the Arab World

Regardless, there is still a struggle that remains in small family-owned restaurants that would appreciate the same exposure as big brand names highlighted on most of the applications. Furthermore, the future goal of these platforms is also sustainability and food-making and delivery options that are environment-friendly.

Not only that, but these platforms have also focused on consumer demands of not just food deliveries, but various products like electronics, groceries, clothing, and others. Applications like Sheeel.com, Taw9eel, and Layali.us deliver Arabic products in the United States. This leaves an important question; will the trend of entrepreneurial service/delivery platforms continue in the Arab world and will they have a role in ending global hunger?

Sources:

https://www.deliveryhero.com/delivery-hero-targets-middle-east-as-high-growth-region-for-food-delivery/

https://www.cnn.com/travel/article/dubai-food-delivery-apps/index.html

https://www.reuters.com/article/us-mideast-careem-m-a/careem-acquires-middle-east-online-restaurant-listing-platform-to-trial-food-delivery-idUSKCN1G203N

https://www.thenational.ae/lifestyle/food/ubereats-deliveroo-and-carriage-which-delivery-app-will-reign-in-abu-dhabi-1.661805

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