Business News
The Ramadan delivery scene explained
Apr
Ramadan in the UAE carries connotations of community and large gatherings of family and friends for hearty iftars, both at home and lavish all-you-can-eat buffets. However, with Covid-19 forcing many residents to spend their days at home and dining out not an option, what does that mean for the meals we’ll be eating in the holy month?
One of the silver linings of the coronavirus pandemic has been a massive growth in the UAE’s food and grocery delivery sector, with players forced to scale up their services in a very short period of time.
“This year, everyone will be at home and preparing meals in their homes,” says Arun Krishnan, COO for the UAE at Fresh to Home, an online grocery platform that offers a range of seafood, meat and poultry. It has added fruits and vegetables to its offering in time for the holy month.
This year, everyone will be at home and preparing meals in their homes.
In a typical Ramadan, consumers spend 50-60 per cent more, explains Mohammed Dhedhi, Principal, Consumer Industries and Retail practice at management consultancy Kearney. “In light of the COVID-19 crisis, we expect food/groceries and gifting items to retain close to normal demand but expect to see a dip in other non-discretionary categories, particularly eating out and large-ticket items such as cars, gold and home appliances.”
In light of the COVID-19 crisis, we expect food/groceries and gifting items to retain close to normal demand but expect to see a dip in other non-discretionary categories, particularly eating out and large-ticket items such as cars, gold and home appliances.
For Lokesh Aswani, Founder and Managing Director of Down To Earth Organic, demand this Ramadan won’t be markedly different from normal years, However, he adds, “The channels will shift from purchasing from bricks-and-mortar stores to more online buying, given the situation created by Covid-19.” To keep pace with shifting consumer preferences, Down to Earth Organic has launched a shopping portal on its Facebook page.
With travel restrictions in place, moving online may be a matter of survival for small businesses. But for food delivery giants it’s a huge opportunity to diversify and consolidate.
The channels will shift from purchasing from bricks-and-mortar stores to more online buying, given the situation.
Earlier this month, the largest online food ordering platform in the Middle East, Talabat expanded its Daily by Talabat service to include grocery deliveries across many parts of Dubai.
While a number of delivery platforms and aggregators had been enjoying steady growth long before coronavirus went viral, lockdown measures have seen their orders boom at an unprecedented rate. For example, InstaShop reported a 53 per cent increase in orders in March over February, with pasta and rice products up 174 per cent.
However, at the same time, people stuck at home are needing to wait longer to receive their orders. “The cause of delivery delays can be three things,” explains Dhedi. “Product availability, lack of drivers and lack of vehicles to serve neighbourhood stores.” On the first point, he says availability shouldn’t be too much of an issue as retailers have their plans for Ramadan set months ahead and are likely to have much of the stock in hand. “There may be some slight delays in product arrivals, but as we have seen, essential items in the UAE remain stocked and easy to find.”
Meeting demand
Large-scale retailers are implementing a range of initiatives in preparation for meeting the heavier Ramadan demand. For Choithrams, which has seen home delivery and online orders double over the past four weeks, that means increasing the size of its fleet and picking orders at night for expedited processing and delivery, says Rajiv Warrier, CEO of Choithrams. Carrefour, which admits the huge increase in online orders has resulted in delivery delays, has opened six new fulfilment centres in the region to help cope with the increased demand. Parent company Majid Al Futtaim Group has redeployed about 1,000 employees from businesses such as Vox Cinemas and Magic Planet to its supermarket operation.
In the past four weeks, our home delivery and online orders on Choithrams.com have doubled. We have increased our delivery fleet and started picking of orders at night to expedite processing and delivery.
Smaller companies too have been able to ramp up their operations to meet the demand. “To cater to the growing demand in delivery services during lockdown, Barakat has increased the number of delivery slots, with deliveries running for 15 hours every day,” says Rajesh Desai, Managing Director at Barakat, which retails fresh fruits, vegetables and juices through groceries and direct-to-consumer channels.
To cater to the growing demand in delivery services during lockdown, Barakat has increased the number of delivery slots, with deliveries running for 15 hours every day.
Fresh to Home, Krishnan says, will be employing its expertise in engineering, supply chain knowledge and the agility that comes with running a smaller operation to rapidly adapt to changing situations. “Being a lean organisation with less bureaucracy we have been very nimble and responsive to changing circumstances and have been able to roll out solutions such as contactless delivery, online payment systems, scalable e-commerce and a robust logistics network.”
Supply chain disruption
Big or small, one challenge facing UAE operators is the coronavirus’ disruption to global supply chains. “Yes, there has been an impact, as quite a few of our products, like spices and lentils, come from India,” says Aswani. “However, we have sufficient stocks here to cater to our customer’s needs for quite some time. We’re optimistic our factory in India will resume operations soon.” Despite the disruption, Barakat has also leveraged its network and relationships with global suppliers and local farms to continue to provide fresh produce to UAE consumers, adds Desai.
With hygiene a top concern for consumers in the time of Covid-19, delivery services are focusing on cleanliness too. All the companies GN Focus spoke to offer some form of contactless delivery — where the order is paid for online and left at the customer’s door — while delivery vehicles, farms and factories are undergoing regular sterilisation too.
What’s on your iftar table?
A number of operators are keen to capitalise on consumers’ growing appetite for healthy options. “We tend to see a rise in immune-boosting products such as fruit, green juices, superfoods, and veggies that are high in antioxidants like spinach, kale and broccoli,” says Becky Balderstone, Founder of Ripe Middle East. “It is important that all calories count during fasting and the food that you eat is offering the best amount of nutrition to ensure your energy levels are maintained. Dates are also a popular item to be bought as well as dark chocolate and green tea.”
We tend to see a rise in immune-boosting products such as fruit, green juices, superfoods, and veggies that are high in antioxidants like spinach, kale and broccoli.
Besides all the essentials, Choithrams sees a growth in Ramadan-related items such as powdered and syrupy drinks, dates, nuts, cooking utensils and accessories, home cleaning and hygiene items.
For restaurants and cloud kitchens, DIY meal boxes delivered home and adapted for iftar could prove big business. For example, Mix N Match already lets customers create their own shawarmas at home by providing the sauces, shredded meat, breads, pickles and garlic paste — it’s cheaper than ordering readymade and, if done right, the meal tastes fresher too.
— R.N.