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The innovations in the Online Food Delivery Market are growing with all leaps and bounds worldwide and the Middle East is no exception. Especially, if we talk about the UAE, Saudi Arabia, and Kuwait, the demand for on-demand food delivery apps is on the rise in all these nations.
The main reason behind this growth is the increasing popularity of online shopping in MENA due to the convenience it provides. As a result, food delivery apps like Talabat are generating millions of dollars in revenue by catering to the needs of a growing economy and some of the richest countries in the world.
At present, Talabat is the greatest player in the market having more than 6 million active users. And all because of its amazing strategies and business model. A few years ago, the Middle East had three major food-delivery apps - Talabat, Zomato UAE, and Uber Eats.
However, in March 2019, Talabat acquired Zomato in the UAE which gave it a massive edge over other competitors and its market share increased in the region. Later, Uber also had to shut down its services in the UAE, Saudi Arabia, and Egypt as it wasn't able to compete with the major players and was running in losses.
So, at present, the market is relying on Talabat and it is today the leader in the food delivery market of the Middle East. In this article, we will talk about the Talabat Business Model to find out how the app works, makes money, and what strategies it followed to beat major players like Uber and Zomato. So, let's get started.
A subsidiary of Delivery Hero, Talabat is today the biggest online food ordering service in the Middle East. But, it had its own share of challenges and obstacles in the journey to become the giant in the food-delivery industry.
When a 33-year old entrepreneur figured out the ample opportunities available in the local food delivery market of Kuwait in 2005, nobody believed him. But, he did not lose hope. And that's how innovations are made.
At that time, just 23% of the country's population was using the internet, and thinking of a digital startup-like Talabat was considered something rubbish or a waste of time. Also, they had to go through the pain of finding delivery locations without Google Maps and the internet was as slow as a turtle back then.
But, disruptions are caused by those who don’t lose hope.
Entrepreneurs in the MENA region thank the founder of Talabat today for his stubborn nature, as he worked hard to scale the company and successfully set an example of how an industry can be transformed. Its acquisition for a whopping $170 Million, the biggest purchase of an internet company in its time, has encouraged many budding entrepreneurs and helped them realize the potential of the regional tech startup sector.
Here's what Talabat's CEO said about UAE in an interview with the local press:
Talabat has evolved from a small Kuwaiti-based startup to a leader in tech and the UAE was the top priority for us. The market in the UAE has grown incredibly fast in the last few years - from being a $10 Billion market in 2011 to a $14 Billion market in 2016. So there are ample opportunities for newcomers in the field
- Abdulhamid Al Omar, CEO, Talabat.
Presently, Talabat is known as one of the most technologically sound food delivery companies in the MENA region. The app operates in seven countries, namely, the UAE, Kuwait, Egypt, Qatar, Bahrain, Oman, and Jordan. Thus, we can say that "from a foolish-looking idea" to "a startup worth millions", Talabat has come a long way.
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If Talabat would have stuck to an ordinary business model, it would have died long ago. Every year, millions of food delivery startups are launched but only a few are able to survive profitably.
For example, Uber Eats had to shut down its services in the UAE and Egypt because of its inefficiency to withstand the competition. But, Talabat is still the leader. The app won the hearts of the people in the Middle East by providing convenient and unmatchable services. Along with restaurants, it now lets users purchase items from gift shops, grocery stores, and flower shops.
1) Talabat follows an on-demand hyperlocal delivery model and its main focus is on the food delivery market. The app leverages robust technology to eliminate the gap between food lovers and restaurants.
2) It works on a dual partnership basis. Thus, along with customers, it is also responsible for providing benefits to the restaurants. The value proposition it provides to all its stakeholders is the key to the platform's massive success.
3) Another factor behind Talabat's popularity is its exclusivity. The company provides a discount to restaurants that cancel their partnerships with other delivery services. It saves businesses the hassle of maintaining a presence on multiple platforms. So, they like to move to exclusive partnerships.
4) They operate using a website and a mobile app. The users can order food or groceries either via the website or mobile app. Along with ordering, customers can explore nearby restaurants and their menus on the app.
5) Rest of its work is the same as any on-demand hyperlocal service. A restaurant partners with Talabat and gets listed. Customers can register and start ordering food or other items. Once the restaurant gets an order, it starts preparing the food and notifies a delivery agent to deliver the order to the location.
6) During this entire cycle, the customer keeps getting notifications about the order status and can also track the order in-app.
7) Some of the features using which Talabat provides an amazing CX are easy app onboarding, a simple check-out process, multiple payment options, GPS tracking, order history, in-app chat, robust search, and many more.
Also Read: 10 Outstanding Features to Make Online Food Delivery Apps Standout
Using Talabat, customers can order everything from food, groceries to flowers, and medicines online from hundreds of shops and restaurants nearby. Just like its business model, Talabat's revenue model is also unique and it makes money using various revenue streams.
1.
CommissionsLike other food delivery apps, Talabat doesn't have a flat commission model. It charges 15-25% of the total bill from the businesses. But, as it focuses on being exclusive, it offers a 5-10% reduction in commission rates for exclusive partners.
This exact commission amount depends on various factors like the location of the restaurant, order frequency, etc.
2.
Delivery ChargesA customer has to pay delivery charges on every order. Just like commissions, the delivery rate is not fixed and it again depends on various factors like location, environmental conditions, and more. For example, rates will be higher on a rainy day or during festivals.
It also eliminates the delivery charges on orders above the threshold limit. This is a common tactic in the eCommerce industry for increasing the average order value.
3.
AdvertisingIn order to get more exposure to the app, Talabat provides advertising opportunities to businesses. For example, it has priority listings and banner ads.
When opting for priority listing, the businesses get a top spot in the rankings. On the other hand, banner advertising means you are showing banner ads inside the app. Talabat uses these two strategies to generate advertising revenue.
Let's get down to the detailed features of a food delivery app like Talabat, with special emphasis on the three main panels: User Panel, Restaurant Panel, and Delivery Agent Panel.
The User Panel is the core of the food delivery app, providing an intuitive and smooth user experience for customers. Here's a list of its key features:
Various sign-up modes, such as email, phone number, and social media handles, make onboarding simple and effortless.
Automatic location detection or manual entry allows users to find restaurants delivering to their area.
Users can browse a pre-curated list of restaurants or apply deep search filters to discover a particular cuisine, dish, or dietary requirement.
Detailed menus with item descriptions, images, and prices enable users to make informed decisions.
It should be simple to add or remove items from the cart without having to jump through hoops for checkout.
There are varied payment options in the form of credit/debit cards, digital wallets, or cash on delivery to accommodate a range of customer preferences.
Real-time tracking of orders, from preparation to delivery, keeps users informed every step of the way.
Easy reordering of favorite foods is made possible through access to previous orders.
Ratings and reviews by users help them share their dining experience and leave feedback, enabling others to make a well-informed choice.
Customized offers and discount codes enhance user engagement and loyalty.
In-app chat or call support ensures prompt assistance for any queries or issues.
Through the Restaurant Panel, customers can handle their business activities with enhanced efficiency. Key features include:
The system allows restaurants to establish profiles that display branding information as well as product menus while managing open and closed business hours.
Easy addition, modification, or removal of menu items, including setting prices and availability.
Real-time notifications of incoming orders with options to accept or decline based on capacity.
Order Tracking functionality allows clients to monitor order statuses between preparation and delivery times to maintain service speed.
The accessibility of sales statistics, together with customer opinions along performance indicators, allows managers to prepare strategic choices.
Ability to create and manage special deals or discounts to attract and retain customers.
In-app messaging or calling features facilitate direct communication with customers and delivery agents.
Transparent tracking of payments received and commissions deducted ensures financial clarity.
The Delivery Agent Panel is designed to streamline the delivery process for couriers. Its features include:
Delivery personnel can register, providing necessary identification and vehicle details.
Real-time alerts for new delivery assignments, with options to accept or decline based on availability.
Integrated GPS and mapping tools provide the most efficient routes to the restaurant and customer locations.
Agents can update the status of deliveries, from pickup to successful drop-off, keeping all parties informed.
Detailed records of completed deliveries, earnings, and any bonuses or tips received.
Direct messaging or calling options to coordinate with restaurants and customers as needed.
Agents can set their working hours and mark themselves as available or unavailable for deliveries.
Access to help resources or support teams for resolving any delivery-related issues.
To further enrich the user experience and operational efficiency, consider integrating the following advanced features:
Reward systems that offer points or discounts for frequent users encourage repeat business.
Catering to a diverse user base by offering multiple language options and accepting various currencies.
Allowing users to share their experiences or favorite dishes on social platforms enhances brand visibility.
Comprehensive dashboards for administrators to monitor app performance, user behavior, and other key metrics.
Enabling users to search based on dietary restrictions, preparation time, or user ratings for a more personalized experience.
Let's get real here, all businesses begin with one thing in mind: making money. And passion, purpose, and innovation are all necessary components of the equation, but no founder is interested in pouring their heart (and bank account) into a product that won't bring in a decent return. That's why it's important to know how much investment goes into creating a food delivery app like Talabat before taking the plunge.
Now, here's the thing, there ain't no universal price to create a food delivery app. The cost will change significantly depending on several decisions you make during the process. Just like building a house, the price relies on the size, shape, materials used, and who you get to build it.
Here's a breakdown in a way that makes sense.
The price tag on your dream app depends on several factors. Let’s dive into the big ones:
1.
Feature SetThe more features you add, the more time and resources go into building them. Real-time GPS tracking, multiple payment gateways, ratings & reviews, and advanced filters? All awesome, but they do raise the cost.
2.
Platform (iOS, Android, or Both?)Want to reach both Android and iPhone users? That means developing two separate apps (or choosing cross-platform development). While cross-platform tools like Flutter can cut down costs, native apps often deliver better performance.
3.
UI/UX DesignA sleek, intuitive, and user-friendly interface can make or break your app. But designing that kind of experience takes skilled designers and more hours.
4.
Backend InfrastructureFood delivery apps run on complex backend systems that manage users, restaurants, delivery partners, and real-time order data. A strong backend provides smooth performance, but also higher cost.
5.
Location-Based ServicesWant your app to show restaurants nearby and track delivery in real time? You’ll need location-based APIs, which require integration efforts and testing.
6.
Third-Party IntegrationsNo matter if it's payment gateways (Stripe, PayPal), maps (Google Maps), or analytics tools (Firebase, Mixpanel), integrating these services takes time and amplifies the development costs.
7.
Development PartnerWho builds your app matters. Freelancers might be economical, but agencies or experienced development companies bring a complete team, better project management, and long-term support.
8.
Maintenance & UpdatesYour app needs periodic updates, server maintenance, and occasional bug fixes. Set aside a portion of your budget for post-launch support.
There is something to learn from every business model and success story and Talabat is no exception. Here is what you should learn from the success story of Talabat:
1.
Think Big and Solve ProblemsAn app idea needs sheer dedication, effort, and focus to be successful. No matter what others say, if you believe in a concept, it is your time to put your blood and sweat into it to drive disruption.
Initially, people criticized the founder of Talabat for executing such an idea that relied heavily on the internet and technology. But, he saw the potential and scaled the startup to new heights. Hire mobile app developers to stay ahead of the competition.
2.
Have an Eye on the Global PlayersIf a concept is new in your location or country, it doesn't mean it is not having any potential. If you see some of the global players validating the concept which is yet unknown in your nation, it is your opportunity to take action and introduce that innovation to your people. When Talabat was launched, even though it was a new concept for the Middle East, it was validated in the Western markets a long ago.
Later on, a German-based company acquired the startup and it transformed the way people shop in the entire region.
3.
Always Strive to ScaleWhile building a tech startup, it is not a good idea to limit it to one region. Talabat was just a Kuwait-based startup but today it is the giant of online food delivery in the entire Middle East. It is crucial to not restrict yourself to boundaries if you want to scale and do something big in the modern digital world.
If you're serious about building the next big thing in food delivery, you need more than just developers. You need Apptunix.
We’re not just coders; we’re creators of success stories. At Apptunix, we transform your idea into a powerful, user-centric, and revenue-generating app that stands tall among giants like Talabat. With years of hands-on experience, a top-tier team, and deep industry know-how, we help startups and enterprises launch food delivery platforms that actually thrive in today’s competitive market.
So, this was all about the Talabat Business Model. The company surely came a long way from being a tech startup in the early days of the internet to being the biggest food delivery business in the Middle East. Especially in the UAE, the on-demand food ordering industry is growing fast.
Thus, there is plenty of room for any new food delivery startup to flourish in the region and earn millions of dollars in sales. Get in touch with Apptunix, a mobile app development company to help you, we are just a call away!
Q 1.How do you build your own food delivery app like Talabat?
To create a food delivery app similar to Talabat, you will require a great idea, the correct features, and a good app development partner. Plan your app’s design and functionality first, then get it developed by professionals like Apptunix. After it’s developed, test it thoroughly and release it to your audience.
Q 2.How long will it take to make a food delivery app like Talabat?
The timeframe will vary based on the features and complexity you require. A simple app will be ready in about 3–4 weeks, while a sophisticated app with many features could be ready in 3–6 months. With ready-to-go solutions, even launching in a few days is feasible.
Q 3.What are the major challenges of food delivery app development?
Some of the typical issues are dealing with real-time deliveries, maintaining a smooth user experience, processing payments securely, and scaling as you grow. But with the right technology partner, most of these can be addressed before they become issues.
Q 4.How do you generate money from food delivery apps?
Food delivery apps make money via delivery charges, restaurant commissions, ads, and subscription-based models. You may also earn cash by charging extra using surge pricing when it is busier or via premium listings on restaurants.
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