It was a trip to the Indian tech city of Bangalore in an earlier role that Amjad Puliyali, the chief executive of Bahraini grocery startup GetBaqala, realised the stark differences in the seamlessness of using e-commerce in India versus the Middle East.
"When you land at an Indian airport, you tend to book your Uber or Ola, and when you step into the car if I've got to be there for two weeks, I order my groceries. So I open the BigBasket app and order items that I need for breakfast, lunch, dinner and everything is sorted out. In the morning, your clothes are delivered fully ironed. So in Bangalore, you never had to step out and it was all sorted out. Why don't we have this in Dubai?" he wondered.
The fast-growing Middle East e-commerce market, which is estimated to be worth $48.6 billion in 2022 up from $26.9bn in 2018 according to Fitch Solutions, is still fairly nascent. E-commerce developers largely focus on fashion, electronics, with last mile delivery remaining patchy and the seamless integration of e-commerce with everyday life still far from realised.
Mr Puliyali, who spent around a decade working with the UAE’s biggest players such as Emirates and Etihad on search engine optimisation and other digital marketing strategies before moving on to work in big data, quickly realised the missing gaps in the market.
"Across the industry people see grocery as an important category to make e-commerce as part of Middle Eastern customers' everyday life,” says Mr Puliyali.
Visitors to regional e-commerce websites typically spend once a month or during sales and are unlikely to make repeat purchases. Groceries on the other hand - an essential part of a household’s spending - allow for the greatest retention online, if done right. And it was this sector that Mr Puliyali decided to zone in on, but realised quickly that Dubai may not be the right market to launch his startup.
A meeting with Bahrain’s Economic Development Board, which has been at the forefront of nurturing homegrown businesses with various financial incentives, made Mr Puliyali realise his initiative, including cost differentials would have more traction in the island versus Dubai.
Bahrain’s labour fund Tamkeen has also sweetened the deal for startups looking to launch in the island by paying for 70 per cent of salaries to nationals employed by such firms.
Mr Puliyali, with his digital marketing background, also realised that the cost of retaining customers in a transient Dubai market was higher.
“It was very complicated and the problem was users would not stay for long, they would leave, they tend to move on,” he says.
In his earlier role with digital marketing firm Vizury, Mr Puliyali worked closely with Indian online grocery platform BigBasket and realised the Middle East was in need of a similar service.
While hypermarkets such as Lulu now offer online services, GetBaqala focuses on getting the freshest produce to customers using their team of shoppers and also focusing on last mile delivery to ensure that delivery needs are met in two hours.
Delivery for orders above 5 Bahraini dinars (Dh48.8) are free with anything below carrying a fee of 500 fils, with no limits on order size.
"There are people with diabetes who order just one bar of Snickers. If you don’t like the produce for example, then you can return it on the spot, no questions asked,” says Mr Puliyali.
His marketing insight also made him realise that the focus of online websites of supermarkets skewed in favour of fast moving consumer goods such as detergents, with customers remaining wary of buying perishable produce.
GetBaqala, which today has a team of 45 up from 4 in a year, has tie-ups with supermarkets as well as local Bahraini farmers to offer the freshest fruits and vegetables, picked off shopping aisles or procured directly from the farms.
The firm, which has this year expanded to Saudi Arabia’s Eastern Province, has also discovered the travails of local farmers, particularly growers of dates, who’ve traditionally had to deal with middlemen.
“Ninety per cent of the dates are consumed in Saudi Arabia with only 10 per cent sold outside,” says Mr Puliyali.
During every date harvest season, families refrigerate freshly plucked dates in exclusive refrigerators for use until next Ramadan.
"We are connecting the farmers to consumers. These are some of the secrets of these local tribes and their fresh produce,” he says.
Unlike other e-commerce websites GetBaqala is unlikely to scale broadly across the region, with the emphasis being on growing deep and hyper-local rather than have scattered presence across the GCC.
“We’ll be busy at least for the next three quarters in Saudi Arabia, but end of next year we’re aiming to get into Kuwait,” says Mr Puliyali.
"We’re focussed on getting more households in the same markets. That would be our focus."