Raki Phillips was tired of cupcakes.
There are many reasons to found a business — to save the world, to make one’s fortune — but the most common story we hear about here at PYMNTS is the one about the founder who discovers a pain point in his or her own life. Realizing the market has not yet come up with a good method to fix the problem, they decide to build their own solution and solve the problem for everyone.
And Phillips, on the eve of founding his dessert delivery on-demand business SugarMoo in 2014, had two problems to solve. The first was cupcakes, which were everywhere five years ago. Artisanal cupcakes, savory cupcakes, exotic cupcakes — in every major city on Earth for a few short years one could not walk more than few hundred yards without someone trying to sell them a cupcake.
Dubai, Phillips noted was no exception. “Everyone was doing cupcakes or they were doing specifically Arabic sweets. If you wanted anything out of that range, it was almost impossible to find in Dubai. I like both of those things, but we knew we wanted to offer more. Our ‘anti-cupcake’ concept sparked the idea of hybrid — East meets West.”
The firm's solution to the cupcake problem was hybridized desserts — saffron mousse rice pudding, kunafa cheesecake, and the company's signature dessert, the cupookie (which, despite its appearance is definitely, “not a cupcake” even though it is definitely the shape of a cupcake and involves icing and cake. The cookie dough bottom, SugarMoo insists, makes it a totally different thing.
But bigger than the cupcake-replacement innovation, perhaps, was the realization five years ago that the dessert on demand market in Dubai was basically non-existent — but not unwanted. Consumers, Phillips reasoned, would have dessert delivered to them directly if it were reasonable priced and easy to get — and if the desserts themselves were worth ordering.
“This was a pretty big leap since online food delivery business in Dubai was worth $750 million per year at the time. But we thought it was growing, and we saw a hole so, we sought to capitalize on that market by delivering freshly baked desserts,” Phillips said.
The products were solid. And SugarMoo got lucky — consumers were in fact tired of repetitive dessert offerings in Dubai and they were looking for something a little bit unusual to appeal to their tastebuds. Dubai’s status as a highly international city with travelers from all over the world with differing palates, he noted, plays to the brand's strength. The hybridized approach to offering freshly prepared sweets is designed to ensure customers will find something familiar and something exotic in the offerings no matter where they are from.
SugarMoo has physical stores in Dubai, Abu Dabi and as of last year had expanded into Saudi Arabia with the opening of its first location in Riyadh.
And while SugarMoo has a fairly diverse stream of clients — from its physical stores and its B2B connections — the vast bulk of its business comes from online sales. There are many consumers who want to go to the bakery to buy the goods and inspect them in person, Phillips said. But for a large portion of the company's client base, seeing is believing, and they’d rather have the ease of the cake coming to them than the strain of venturing out to get it themselves.
“Over 65 percent of our customers are tech-savvy millennials ordering online or through our app,” said Phillips. “In a day, an average of 100 orders come in.”
It is a challenging market to be in, and one that is now far more riddled with challengers than it was when SugarMoo first got its start.
“Back in 2014, we didn’t have any competition, but now, with online food delivery business worth over $1 billion, many online platforms have joined the food delivery business, giving other already-established dessert makers a medium for home delivery,” said Phillips. “That is a big change and a big hurdle for us. However, we are still the market leader when it comes to desserts.”
And, he said, SugarMoo intends to keep that perch — even as the market around it continues to crowd. The company has spent half a decade building and expanding the brand, and consumers who come to click through for sweets aren’t just looking for any sugar fix, according to Phillips. When a customer wants a cupookie, apparently no substitute will do.