Egyptian startups are banking on digital solutions to drive business growth in the local and regional food sector, which has primarily operated offline and is in dire need of digitization to increase efficiency and productivity and lower costs.
The ultrafast delivery model is still a relatively new concept in the Middle East and North Africa (MENA) region, according to Yasmine Abdel Karim, co-founder of on-demand logistics and delivery startup Yalla Fel Sekka (YFS).
“It is there in Southeast Asia and Latin America, but it wasn’t yet reflected in Africa and MENA. That’s why it’s a very exciting market [for us and investors alike],” she told PYMNTS in an interview.
Read more: Ultrafast Delivery Model Creates New Opportunities for On-Demand Services in MENA
The business-to-business-to-consumer (B2B2C) startup, launched in early 2020, is now filling that gap by enabling businesses such as eCommerce firms, supermarkets and pharmacies to sell to their customers by leveraging its network of mini-warehouses and dark stores.
So far, YFS has caught on quickly with businesses. To date, the company has completed over 2 million deliveries via its network of 1,000 active motorcycle and van drivers and currently operates in five cities across Egypt: Cairo, Giza, Alexandria, Mansoura and Tanta.
See also: MENA Food Delivery Service Bucks Global Downward Trend as Europe Business Retreats
In another example of an Egyptian startup blazing a trail in the MENA food sector, Cairo-based cloud kitchen services provider The Food Lab is helping budding restaurateurs minimize costs, increase margins and improve operational efficiencies by offering them access to managed, shared dark kitchens.
Related: Cloud Kitchen Softwares Help MENA Restaurants Optimize Costs, Expand Reach
According to The Food Lab’s CEO and co-founder Ahmed Osman, third-party aggregator costs — which often fall between 25% to 30% — are so high that they leave restaurants with a meager 0% to 5% margin. This, he said, ends up dissuading potential business owners and operators from venturing into the food business because of the time it will take for them to break even.
But from a margin of 0% to 5%, Osman told PYMNTS that the company’s clients can now make 15% to 20% without having to take on any of the capital expenditure or risks involved: “It’s a pure revenue share model which means whenever you sell, I take my cut; if you don’t sell, I don’t get paid a cut.”
And earlier this year, Cartona, an Egyptian B2B eCommerce marketplace for the fast-moving consumer goods (FMCG) space, partnered with multinational consumer goods company Unilever to help increase the number of retailer, supplier and distributor offerings on its B2B marketplace.
Read more: Egyptian B2B eCommerce Startup Cartona Partners With Unilever
The retail tech company, which raised $12 million in Series A funding last month, is looking to digitize the primarily offline-operated trade system in the country as part of wider plans to disrupt the $120 billion Egyptian retail market, per a PYMNTS report.
See also: B2B Marketplace Cartona Raises $12M for Expansion
“This cooperation [with Unilever] allows both parties to offer unique solutions, revolutionizing Egypt’s traditional trade and broadening our prospective user base across various governorates,” Cartona CEO Mahmoud Talaat said of the deal.
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