Saudi Arabia Food Delivery Market Overview 2021
Saudi Arabia’s on-demand food economy is currently growing due to an increase in food ordering and mass consumption as newcomers are rapidly leveraging the strength of the food delivery landscape for geo-expansion of their restaurant and cloud kitchen ventures..
Saudi Arabia has globally competitive segments for business investment today. It attracts the attention of emerging brands to attain market leadership in a strong and stable economy. These players have high aspirations about what to expect from their experience in the Middle-East. Saudi Arabia’s on-demand food economy is currently growing due to an increase in food ordering and mass consumption as newcomers are rapidly leveraging the strength of the food delivery landscape for geo-expansion of their restaurant and cloud kitchen ventures -
Foraying Into the Delivery Landscape
Within Saudi Arabia, there are major vendors such as HungerStation that have provided massive opportunities to all the emerging startups who wish to enter the foodservice market. To the same extent, food delivery platforms such as Talabat, Jahez, and Yemeksepeti are ramping up their fleet to look after the food delivery logistics to connect restaurants, fast-food chains, cafes, and cloud kitchens with the end customers.
Talabat, Yemeksepeti, and HungerStation are owned by Delivery Hero, the Berlin headquartered company, which continues to dominate the food delivery landscape in the Middle East, North Africa, and Turkey. HungerStation’s market share continues to expand and is responsible for half of Delivery Hero’s revenue and most of their growth in Saudi Arabia. It is also worth noting that the Middle East is the only region where Delivery Hero has been able to witness a positive EBITDA for two consecutive years - USD 24 million in 2017 and USD 18 million in 2018.
The online food delivery platforms represent 8% of the total foodservice market, and it is estimated that the penetration rate will double within five years. Within the 8%, Delivery Hero, along with its portfolio brands, dominate 70% of the market. Deliveroo, Careem NOW, and other competitors, including those that are focused on corporate meals and grocery delivery, represent the rest 30% of the market.
Dubai-based company Careem launched its food delivery service ‘Careem NOW’ into the Saudi Arabia capital Riyadh, in 2018. While the potential is clearly there, the food delivery business brings with it a certain set of challenges that must be navigated. Amidst the Coronavirus pandemic, Uber Eats announced that it would discontinue its delivery services in 7 countries, including Saudi Arabia.
Starting Your Own Food Business
Restaurateurs often get bogged down by the taxing job of delivery orders, having to sometimes train their staff to do more jobs than one. Suppose someone wants to handle the complexity that comes with managing food delivery via a restaurant, or a cloud kitchen, they should think about making use of aggregator apps.
Saudi Arabia has an 88% smartphone penetration and there is a huge potential for food startups, who want to cater to the customers’ needs. To bring the most convenient food delivery experience to customers, delivery platforms charge restaurants/business owners a fee if they want to make use of the delivery platform’s name and network. Therefore, it is imperative that restaurants manage their operations efficiently in order to achieve profitability.
UrbanPiper x Food Delivery
Here’s how you can strategically scale up your business growth on aggregator apps; enter UrbanPiper.
Trusted by 10,000+ businesses such as McDonald’s, Subway, KFC, Taco Bell, and Dunkin’ Donuts, UrbanPiper is the preferred integration partner to get timely updates about the new feature developments on Saudi Arabian delivery platforms such as Jahez. You may also take advantage of timely reports from the UrbanPiper’s API integration to manage your business successfully.
With ever-increasing operational demands, it can be hard to keep pace with aggregators who may complain about orders not going out on time. But with UrbanPiper’s integration solution, you can control your catalogue in real-time right from your POS system. Here’s a glimpse of the benefits you can get after an integration with UrbanPiper:
1. Efficiency: Restaurants can meet their objectives on time and do more in less time due to integration support.
2. Reliability: UrbanPiper’s API integration has more than 99.95% uptime, ensuring that you don’t have to worry about outages
3. Ease-of-use: With UrbanPiper’s Hub, you can handle menu management, inventory control, order relay, & order status reports all from your POS.
4. Laser focus: UrbanPiper API integration allows you to streamline operations without hassle. Quickly eliminate the chaos of using multiple dashboards.
Find out more about UrbanPiper's integration solution Hub.