Food delivery service Talabat aims to expand its UAE operations by doubling the number of riders to reduce delivery times and adding new services on its app to tap into the potential of "quick commerce", its executive said.
The food and groceries delivery app plans to increase the number of riders to 30,000 by the end of the year, up from 15,000 currently, to cut down delivery times to 15 minutes, Jeremy Doutte, vice president of Talabat's UAE division, said in a press conference on Monday.
The online platform is also considering adding more services on its app, as it seeks to diversify its offerings and increase the frequency of customer orders by 50 per cent by year-end, he said, citing examples such as the delivery of medicine prescriptions or the offer of at-home Covid-19 testing services. Research, trials and customer focus groups will guide the new offerings, he said.
Food delivery aggregators such as Talabat and Deliveroo have benefitted massively from an uptick in online orders amid the Covid-19 pandemic.
Online sales for the UAE’s food and beverage market surged 255 per cent year-on-year in 2020 to $412 million, according to a study by Dubai Chamber of Commerce and Industry released in February. The value of online food and beverage sales in the country is projected to reach $619m by 2025 and record a compound annual growth of 8.5 per cent in the period between 2020 and 2025, it said.
Talabat, which in 2015 was acquired by Germany's Delivery Hero, recorded 90 per cent year-on-year growth in online orders and 100 per cent year-on-year growth in app downloads during the first half of 2021, according to a company presentation.
The company reduced delivery times to 28 minutes in 2020, from an average of 40 minutes in 2018-2019, it said.
Talabat may not reach the target number of riders this year due to Covid-19-related travel restrictions on key source markets such as India combined with the long timeframe to acquire driving licences and complete training , Mr Doutte said. Talabat's riders are provided by third-party logistics companies, it said.
As part of its UAE expansion plans, Talabat will also be adding more cloud kitchens. Also known as ghost kitchens, these are commercial establishments built to prepare food specifically for delivery and they have benefited from the shift to online services during the coronavirus crisis. They have no physical presence as a restaurant and offer delivery-only services from a centralised location through a mobile app.
Talabat plans to add 12 cloud kitchens, in addition to its existing seven units, by the end of this year as they help reduce costs and increase operating margins, Mr Doutte told reporters.
The executive expects that about 30 to 40 per cent of its future deliveries in the next three to four years will be prepared in cloud kitchens to cut down on food delivery timings.
Last year, the online food delivery platform introduced initiatives to help its restaurant partners weather the impact of the Covid-19 pandemic that took a huge toll on the sector. Talabat waived and deferred fees for restaurants for six months but this agreement is no longer in place, Mr Doutte said.
In March 2021, Talabat also settled commission payments to restaurants twice a week, up from once a week previously, to help them manage cashflow, he said.
Delivery app commissions became a point of dispute between restaurants and the major food delivery apps last year during the height of the pandemic.
Founded in Kuwait in 2004, Talabat operates in markets in the Middle East and North Africa, including the UAE, Saudi Arabia, Oman, Bahrain, Qatar, Egypt and Jordan.
It expanded into Iraq earlier this year with operations into Erbil, the Kurdistan region's capital and the most populated city in northern Iraq, Mr Doutte said.
In 2019, Talabat bought the Middle East operations of Zomato but it has allowed it to retain its brand identity. However, it absorbed earlier acquisitions such as Kuwait's food delivery platform Carriage and Egypt's Otlob under its own brand.
Mr Doutte declined to comment on any potential new acquisitions.
The company's network includes more than 15,000 restaurants and stores and nearly 24,000 branches. Some of its partners include global brands like Burger King, KFC, Pizza Hut, Papa John's, TGI Fridays and Subway.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
RESULTS
Welterweight
Tohir Zhuraev (TJK) beat Mostafa Radi (PAL)
(Unanimous points decision)
Catchweight 75kg
Anas Siraj Mounir (MAR) beat Leandro Martins (BRA)
(Second round knockout)
Flyweight (female)
Manon Fiorot (FRA) beat Corinne Laframboise (CAN)
(RSC in third round)
Featherweight
Bogdan Kirilenko (UZB) beat Ahmed Al Darmaki
(Disqualification)
Lightweight
Izzedine Al Derabani (JOR) beat Rey Nacionales (PHI)
(Unanimous points)
Featherweight
Yousef Al Housani (UAE) beat Mohamed Fargan (IND)
(TKO first round)
Catchweight 69kg
Jung Han-gook (KOR) beat Max Lima (BRA)
(First round submission by foot-lock)
Catchweight 71kg
Usman Nurmogamedov (RUS) beat Jerry Kvarnstrom (FIN)
(TKO round 1).
Featherweight title (5 rounds)
Lee Do-gyeom (KOR) v Alexandru Chitoran (ROU)
(TKO round 1).
Lightweight title (5 rounds)
Bruno Machado (BRA) beat Mike Santiago (USA)
(RSC round 2).
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Russia's Muslim Heartlands
Dominic Rubin, Oxford
