The food delivery space has been having a rough time lately, particularly in Europe.
Since the beginning of the year, U.K.’s Deliveroo and German online delivery service Delivery Hero have lost about half of their value on the stock market, and another German on-demand grocery delivery company, Gorillas, has pulled out of Italy and Belgium.
Dutch multinational firm and Grubhub owner Just Eat Takeaway has fared even worse, currently trading at around one-sixth of its May 2020 peak.
While the stock market is not always a good indicator of financial health, considering that none of the above food delivery giants has yet turned a profit, declining investor confidence is certainly a concern.
Read more: Delivery Hero Eyes Profits by Next Year
But while food delivery services might be on the retreat in Europe, the Middle East and North Africa (MENA) region appears to be somewhat bucking the trend of slowing down on aggressive growth strategies that delivery companies have pursued in recent years.
MENA Remains Resilient
Far from winding down their operations, local and international delivery players operating across MENA seem to be ramping things up.
For example, Deliveroo has recently rolled out its grocery delivery service, Deliveroo Hop, in the United Arab Emirates (U.A.E.), where the service is currently available in five cities.
More on this: Deliveroo U.A.E. Debuts Rapid Delivery Grocery Service
Delivery Hero also has its eyes set on the MENA country following its purchase of Kuwait-based Talabat, considered the largest online food ordering company in the Middle East, as well as the U.A.E. subsidiary of Indian restaurant aggregator and food delivery company Zomato.
Meanwhile, Uber’s Middle Eastern subsidiary Careem also has a strong proposition in the country, operating a food delivery service app called Careem Now since 2018.
Careem has bolstered its presence in MENA markets where the company has ambitions to consolidate its ride-hailing, food ordering, and financial services into an integrated super app. In June, the firm purchased Dubai-based Munch:On, enhancing its food delivery capacity in the country in an attempt to gain an edge over rivals.
Outside of the U.A.E., Careem has purchased a stake in Egyptian food discovery startup Elmenus, giving the company exposure to the food delivery market in a country where it already has a strong foothold in ride-hailing.
Not to be outdone, talabat last month announced that it was launching its aggregator service in Baghdad and prior to that in March, the Kuwaiti firm launched its dark store grocery delivery business, Talabat Mart, in four new Egyptian cities.
UAE’s Upward Innovation Trend
As Talabat’s latest expansions reveal, both the aggregator and quick commerce delivery formats are steadily gaining traction across MENA markets. In contrast, the sector appears to be battening down the hatches in Europe and America where rising food prices and declining consumer confidence paint a gloomy picture of difficult times ahead.
MENA’s strength in the face of the global economic storm didn’t happen overnight. The U.A.E. in particular has been at the forefront of pioneering new delivery solutions. Long before Europe’s COVID-fueled instant grocery boom, Dubai’s Insta Shop was connecting a network of merchants to MENA consumers in need of quick supplies.
And the innovation trend doesn’t look like it’s slowing down anytime soon. Another Dubai-based q-commerce platform, veppy.com, last week invited suppliers and sellers to register their companies and list their products online ahead of its commercial launch this August.
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