Food on-demand: In conversation with Talabat.com
Abdulhamid Al Omar, CEO of Talabat.com, on his company’s growing appetite…
Talabat recently crossed the 100,000 order milestone. How would you describe your journey so far?
We were naturally very proud when we hit that 100,000 order milestone last month. Initially, Talabat was established by young Kuwaiti entrepreneurs, and it’s an inspiring regional success story for passionate young minds in the region. In 2015, Talabat was acquired for US$170 million and is now owned by Delivery Hero, the global leader in online and mobile food ordering. It was the largest tech exit the MENA region had seen at the time. The idea behind Talabat was to create a platform that was both efficient and easy to use, and now we are the biggest online food ordering service in the GCC, present across all six markets. As a leader in this sector, we are aiming for further growth and to solidify our leadership stance in the Middle East region.
From signing up over 4,000 restaurants, hitting the 50m order mark and the 6m download app mark, each new milestone we hit is a great new success for us as a team. We are also proud to say we recently won BBC Good Food’s Food Delivery App of the year and were selected as a Google Play Best of 2016 winner in the MENA region for “Best Local”.
There have been many similar apps that have been launched since Talabat. What keeps you ahead of the competition?
We’re a home-grown company that’s been around for many years, growing alongside the e-commerce and food tech industries in the region. Unlike other players in the market, Talabat is also GCC wide and we have 13 years of local knowledge and reach behind us. This means we have market understanding and localised services catering to the different needs of a wide range of people. We are also committed to constantly evolving our product and services to keep up to speed on the developing food trends. We focus a lot on our customer service, and our operations run 24/7 to ensure the experience is both convenient and hassle free. With years of knowledge and development behind us, we continue to be firmly focused on creating and curating an amazing customer experience through product and customer service enhancement.
Another great thing about Talabat is the size and range of restaurants available. The app and website collectively house the region’s largest online selection of F&B outlets. There is a built-in functionality to view individual menus before placing orders, and users can choose a restaurant based on cuisine and location. Payment can also be made using credit and debit cards at the time of ordering, rather than just cash on delivery, which saves a lot of time and decreases inconvenience. Finally, there are no delivery fees from Talabat itself, which saves money for the customer. You’ve quickly expanded from Kuwait into the GCC territory.
Was UAE an attractive proposition?
Talabat has evolved from a Kuwaiti-based start-up to become a regional leader in the e-commerce business, and the UAE was definitely a huge priority for us. The overall UAE F&B market has grown spectacularly in the last few years – from being a US$10 billion industry in 2011 to a US$14 billion industry in 2016, according to a research by KPMG. So there is plenty of opportunity in the field.
What were the biggest challenges when expanding to other GCC countries?
We realise that the industry is growing and so we are constantly finding new ways to adapt. We make it a point not to treat every market the same and maintain an ongoing due diligence process so that we understand each market’s nuances. Being a home-grown business that is part of a global food ordering giant puts us in the unique position of balancing local insights with global learnings. At the same time, we continue to be very close to our restaurant partners and customers, continuously channelling their feedback into our business to ensure that we stay ahead of the curve in the online food ordering ecosystem in the region. The delivery and takeaway market is estimated to be around US$3.5 billion, and is set to grow at a rate of six per cent annually – or at least in the next five years – and we will continue to be a driving factor in that growth.
How did you manage to stay competitive in a challenging business climate?
While 2015 and 2016 saw an increasingly tough economic climate, the UAE is unique in that it has one of the highest F&B outlets per capita in the world. In fact, three in four people surveyed in the 2016 KPMG Report for the UAE ordered food at least once a week. People are drawn to the convenience of ordering online. In the current macroeconomic climate, we see that takeaway and delivery is growing faster than dine-in, and this is a trend visible globally. We are a business that exists because of the disruption brought about by technology, mainly smartphones. Specific to the UAE, a recent research led by Google found out that 99 per cent of the consumers use a smartphone and 89 per cent use the internet daily. Also, it is interesting to see that 70 per cent of smartphone owners would choose to do a task digitally if it were possible to do so.
Technology is constantly evolving and so are customers’ expectations. This gives us the impetus to keep pushing ourselves in all areas of our business. We are always striving to elevate our value proposition, particularly in the context of convenience and choice for both restaurant partners and customers. We have several exciting updates in our product and service pipeline, and working to see these materialise are a top priority for us. Currently, we are working on some new features which will help restaurants better manage and operate their delivery processes. This will also translate into a better experience for our customers.
How has the acquisition helped the brand?
The e-commerce landscape in the region is shifting, and global players are increasingly taking notice of companies in the region. As mentioned earlier, when we were acquired in 2015, the acquisition was the largest of its kind in the Middle East. These types of acquisitions help expand our growth, our reach and, ultimately, our success, exponentially.
Did the cultural transition present any challenges internally?
With any acquisition, some changes are inevitable and I am proud of my team for embracing new methods whilst maintaining the core values that have made Talabat so successful. As well as being an excellent place to work, we still have the mind-set of a start-up!
What do you feel will be the biggest challenge to Talabat’s growth in 2017?
The F&B sector as a whole is becoming increasingly competitive across the region. In addition, dining and eating out options also continue to increase and expand in a region that is already saturated. This may see a correction soon, with operators taking a more cautious approach rather than expanding or opening new outlets. The growth of online food ordering through aggregators is shaking up the F&B industry, and customers are becoming more educated about the service. Unfailing ease and exceptional service are becoming the standard, bringing with them exciting challenges. The upward trajectory of the industry will be keeping us on our toes, striving to elevate the experience for our customers to find their favourite foods easily and conveniently from home, work, or on the road. That said, food consumption in the GCC is expected to grow at a compounded annual growth rate (CAGR) of 3.5 per cent between 2014 and 2019 as the region’s population expands, according to Alpen Capital’s GCC Food Industry Report 2015. It also mentions that food consumed in the region is likely to reach 51.9 million metric tons by 2019, which put us in a very good position!