Why cook when you can click?
How the exponential rise of food delivery apps in the region has changed consumption habits in the UAE - and led to the rise of some pretty neat trends as well (did anyone say
Growing up in the UAE, one of the most anticipated events of my childhood was our once-a-year outing to have dinner at a popular fast-food chain. Located on the Dubai-Sharjah road, this restaurant complex was the centre of all my dreams and aspirations at the time. I remember picking out my outfit at least a month in advance and then counting down the days to the evening of the dinner. In those days, we had just a handful of restaurants in the country and eating out was a rare luxury.
However, over the last decade or so, there has been an explosion in the number of restaurants in the country - which correlated to a spike in people's dining out habits too. With almost 12,000 restaurants registered in Dubai alone, diners are now spoilt for choice. Undoubtedly, the single most important development, which has fuelled the massive eating-out culture in the country, has been the arrival of third-party food apps.
Food apps can be broadly categorised into two - aggregators and delivery apps. The aggregators simply provide a platform where customers can browse menus, read reviews and place orders. They direct the orders to the restaurant, which then deliver food to the customer. The delivery apps provide restaurants with the logistics to fulfil orders. Most food apps in the UAE are a hybrid of aggregators and delivery apps. Together, they have revolutionised the F&B industry in the UAE.
How important are these apps to the local market? Very, according to business owners in the country. Their sway has resulted in several food concepts relying solely on these apps for their business. Asian restaurant Mmmbox is a classic example of this. After setting up shop in Jumeirah in January this year, the restaurant owners depend predominantly on food apps for their business.
"There has been an increase in the number of customers ordering food online and at a higher frequency," says Gaurav Sajnani, partner and CEO at Mmmbox. "More and more customers are looking for high quality delivery joints to cater to them from within the comfort of their home or order online for their office lunch. We have identified that food delivery is a growing trend in the market and have found a way to enhance that experience. We rely on social media to showcase the aesthetics of our food and let the food review sites speak for themselves when it comes to the quality and taste of our food."
This reflects the ground reality, as the annual KPMG food and beverage report of 2018 shows that three in four people order food through third-party aggregators at least once a week. With mobile penetration in the UAE being one of the highest in the world and the GCC food delivery market estimated at $350 million, it is evident that these apps are here to stay. Offering everything from delivery to ratings, these apps have completely transformed the dining out landscape in the UAE - and explains why 86 per cent of all restaurants in the country are listed on food apps. In fact, according to survey results, more than 50 per cent of F&B outlets in the UAE, like Mmmbox, depend on third-party food delivery to bring them a significant amount of business.
"They are a necessary evil," chuckles Chef Anish Mathew who, along with his partner, recently launched the restaurant Back to Grills in Oud Metha. "You can't live with them, but you can't live without them. For a brand-new restaurant like ours, the third-party aggregators are a great way to get visibility and brand awareness. However, apps need to focus on a win-win situation for everyone rather than just focusing on their profitability or offering deep discounts. Many don't realise that while deep discounts drive a lot of traffic to the restaurant and the app, the owners are barely making anything after paying the commissions and riders. It literally comes to a point where we are giving free food just for visibility. Having worked with almost all the aggregators in the UAE, we have found that some are better than the others."
Third-party delivery platforms and meal delivery plans have become vital channels for any food service operator in the country seeking sustained order volume, observes Monique Naval, food and nutrition analyst at Euromonitor. "The increased trend towards online ordering has also led to a decline in average order value as more restaurants push order volume through offers and promo codes. Consumers have thus gotten into a culture of maximising discounts without compromising on eating what they desire."
This is a sentiment echoed by Gurwinder Singh, popularly known as Pappi Singh who, along with his uncle Harinder Singh, opened up the iconic restaurant Sindh Punjab in Bur Dubai in 1977. "When we first started the restaurant, there were only four or five restaurants in the country," says Pappi Singh. "So, anyone who wanted Indian food, including Bollywood stars who visited Dubai, came to us. Today, that is not the case. There are thousands of restaurants to choose from. With food apps pushing offers and discounts, it affects the profits of restaurants even more. For us, we have been in the country for a long time and people have heard of us, but for a restaurant that is just starting, the market is becoming very difficult."
With so many apps on the market, how is the
future looking for these food apps? In the highly competitive business environment of food service, it is important to have a differentiating element to add value on top of the primary products or services offered, says Monique. "By focusing on the customer experience which entails both pre-purchase and post-purchase aspects, platforms can stand out to create a strong brand."
"Technology will become the core facilitator in this digital disruption," she adds. "And technological expertise will become crucial for players, both online and offline. It will help create a more seamless connection for consumer engagement both in-store and online."
Interestingly, there are several brands, which do not believe it is necessary to be on third-party food aggregators in order to make a mark in the F&B industry. One such brand is Doors Freestyle Grill in Al Seef, which opened its doors in December 2018. Described as a lifestyle experience, the brand has already created a buzz in the market with its extravagant settings and theatrical display of food.
"There are a lot of offers and discounts going around in the market with the third-party food apps," says Mohamed Farzad, the director of Doors Freestyle Grill in Dubai. "Restaurants are starting to understand the feasibility of this. We, however, do not indulge in third party apps for offers as we believe in our product. Customers are very well educated to understand an experience a restaurant provides them and take their call depending on that."
Soraya Sarif, a business consultant and wanderlust foodie who has spent the past 20 years travelling to exotic spots to savour the local cuisine of each region, agrees that consistent quality and authentic flavours are the key factors that drive a restaurant's success. "Restaurateurs are facing a growing need to innovate to continually find the sweet spot between flavour, quality, and concept/experience," she says.
It's the one thing all interviewees seemed to unanimously agreed on. Despite the changing technologies and the undeniable clout of food apps, it is the taste and good quality of food that keeps the customer coming back to a restaurant. Arva Ahmed, founder of food tour company Frying Pan Adventures, works closely with people who appreciate food as well as the experience of dining at some of the most authentic restaurants in the country. She is quick to note that "there are loads of people who appreciate honest, good flavours - regardless of what the food looks like or what kind of discounts are being offered."