Research Reports

The rising popularity of online food delivery platforms and cloud kitchens in the UAE

June 07 , 2022

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Executive Summary

The traditional business model of having only dine-in and takeout options has evolved over time in the UAE, with many customers now preferring to consume their food at the convenience of their homes. Third-party platforms, also called food aggregators play an important role in the food and beverage sector of the UAE now, much similar to many developed countries. The food delivery platforms - Talabat, Deliveroo, and CareemNow have all experienced revenue increases in the United Arab Emirates over the last two years. Due to an increase in average order frequency and customer volume, Talabat's YOY growth in 2020 and 2021 is much higher compared to previous years.

A cloud kitchen is a restaurant kitchen that solely accepts delivery orders and does not have a dining area. Many restaurants have adopted this new business model known as "cloud kitchens," sometimes known as "dark kitchens" or "ghost kitchens. "The number of Emirati food companies that have chosen to join the Dark Kitchen ecosystem has kept increasing. In the UAE, the number of Cloud kitchens is increasing with notable brands like Kitopi, Kitch, Kitchen Nation, Kitchen Park etc., Cloud kitchens can reach customers all across the city without the need for massive facilities, and they can be more efficient than restaurants. Because of their minimal cost and wide reach, cloud kitchens are expected to become lucrative earlier than restaurants. When compared to a brick-and-mortar restaurant, the initial investment necessary to start a cloud kitchen is far lower.

Key Discussion Points

  • Evolution of Food delivery platforms in the UAE
  • Timeline of important events in UAE's food delivery market
  • The Rising Popularity of Cloud Kitchens in the UAE
  • Profitability of Delivery platforms and Cloud kitchens
  • Economics of a Food Delivery Order
  • Unit Economies of Food Delivery Companies in the Mena Region
  • Key developments in the Food delivery and Cloud kitchen space
  • Online Meal delivery
  • New Innovative Model of existing Food Delivery Platforms
 

Did you know?

  • The UAE online food delivery market is predicted to develop at a CAGR of 23% with over 400 brands and more than 80 locations in the UAE.
  • Deliveroo had tremendous growth in the UAE, progressively putting itself in the second position since the second quarter of 2020.
  • Talabat maintains a market share of around 74 per cent.
  • When compared to the U.K., the average order frequency in UAE has shown a significant growth.
  • The food industry in the Gulf Cooperation Council (GCC) is expected to develop at a rate of more than 7% every year.
 

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