Delivery 2.0

The food delivery market has undergone a global transformation, driven by advanced technology options and increased smartphone usage. The Middle East has a strong culture of food ordering, thereby providing a fertile ground for new players. How do major market players in the GCC region experience the business and what are pros and cons from the restaur ant operators point of view? Bettina Quabius reports.

- Bettina Quabius

According to a 2016 McKinsey report, the global food delivery market stands at €83 bn, or 1% of the total food market and 4% of food sold through restaurants and fast-food chains. Growth rates vary depending on the matureness of the respective markets. For the GCC market PwC estimates the online food ordering business to reach €195 m by 2020.

Strong culture of home delivery

In the region’s general retail culture, home delivery is very popular, from small independent corner shops and eateries to casual dining restaurants and QSR chains. KPMG’s 2016 UAE Food and Beverage report finds that three out of four survey respondents order take away or have food delivered at least once a week. This can be attributed to several factors such as the region’s hot summers that prevent people from going out, the issue of mobility when high traffic in the big cities motivates them to order, or religious and social aspects as is the case in Saudi Arabia, where particularly female consumers find it more appealing to be in the comfort of their own home environment rather than being restricted in an outside place. Though the use of technology is picking up – smartphone penetration in the UAE and Saudi Arabia is among the highest in the world – still by far most common is the traditional model of ordering via phone directly at the restaurant, describing the location to the driver and paying cash when receiving the food on the door.