Dubai: How quickly will customers in the UAE switch from Zomato, the food order and delivery platform that has just confirmed it will cease operations in this market?
Zomato has a committed following among Indian and other South Asian residents, and this will be up for grabs once the operations wind down. On Monday, Zomtato announced that users who log onto the app would be directed to the Talabat platform. (Zomato had sold its UAE food delivery services to Talabat in 2019).
Except for removing this one service, users will still have access to Zomato Pro and Pay features, the company earlier confirmed to Gulf News.
“The impact of this change will be felt in a week – from November 24,” said Mehreen Raj, Partner and CEO of Zone Delivery, one of the largest delivery fleet providers in the UAE.
Zone Delivery has a fleet of 6,500 riders, and 72 per cent of them are employed with Talabat.
“Zomato has an estimated 2 million to 3 million online orders every month,” Mehreen added. “In this case, people used to Zomato must start getting comfortable with Talabat.”
F&B industry sources are unanimous that the November 20 to December 18 will all be about UAE residents ordering in their dinners, which are bound to be in front of their television sets as the FIFA World Cup matches play out in Doha. The forecast is that ordering in will deliver record volumes, and not necessarily for meals alone.
Apart from Talabat, UAE’s other food delivery apps will thus have an open field to try and aim for the Zomato user base. While a sizeable number would likely gravitate instantly to Talabat, sources say that with the right cuisine/restaurant options being provided, Zomato users could be convinced to look around.
What happens to delivery riders?
The other big question with Zomato’s imminent departure would be to do with the contracted delivery riders and other personnel. Already, the local online booking and delivery space is getting overcrowded, say market sources.
With the removal of almost all pandemic-triggered restrictions in the UAE, delivery riders have become a surplus resource, owners of third-party logistics (3LPs) companies have said. Shanavas Mohammed, Managing Director of Golden Fork Restaurant, said any effort to streamline services on Talabat could pay off and put to use full-time employment riders who are benched at the moment.
Mohammed said, “For dine-in focused restaurants such as ours, only 10-15 per cent of our businesses come from online orders. From fast food joints or quick service restaurants that serve pizzas, burgers, etc., almost 80 per cent of the daily business comes from online deliveries.”
Transition to Talabat, especially for the Asian customer, will take some time. Zomato customers will not move over in one day. I suspect consumer demand will drop and then improve
A surge in '3PLs'
The number of third-party logistics companies operating in the UAE has increased by 50 per cent since 2015. “When I started, barely 10-15 companies were operating as service providers,” said Ibrahim Al Shekaili, the owner of Orderat, a food distribution service based in Abu Dhabi. “The number of companies has exploded since.”
Mehreen said there at least 1,000 third-party logistics companies in the UAE and each company has fleets of varying sizes. “While a large majority of the riders are working, the supply of delivery personnel has surpassed demand,” she added. “Compared to peak-Covid time, online booking and delivery demand has reduced.
“While they were very much in demand during Covid, especially for retail, pharma, F&B, and e-commerce businesses, we cannot say the same now. People want to go out more.”
Now, that should change during the World Cup phase – ordering in and having that delivered is up for a bumper 30-40 days. UAE’s food delivery apps will be out to cash in.