Quick-commerce startup YallaMarket eyes Saudi Arabia and Qatar next year after U.A.E expansion
YallaMarket, a Dubai-based quick-commerce startup, is planning to expand within the United Arab Emirates (U.A.E), and to enter Saudi Arabia and Qatar next year, to tap the appetite for speedy and convenient grocery shopping.
The startup, which was formally launched last month, is expanding in the U.A.E cities of Abu Dhabi and Dubai by setting up an additional 100 dark stores to offer 15-minute delivery services. Dark stores are order fulfillment centers for online retail outlets. These stores are inaccessible to customers but serve the important role of rapid order fulfillment. YallaMarket has two dark stores that are currently operational with plans to open two more in the next two weeks.
The instant delivery service will use the $2.3 million it has raised in the pre-seed round to fund expansion within the U.A.E. The round was co-led by Dubai Angel Investors and Wamda Capital, with the participation of a number of angel investors that focus on the Middle-East and North Africa (MENA). YallaMarket is planning to launch the production of ready-to-eat meals that will be available to order via the app, in the near future too.
The startup was founded by Dubai-based Russian entrepreneurs Leonid Dovbenko and Stanislav Seleznev, also founders of restaurant automatization services DocsinBox and Tawreed.
“We plan to use the majority of newly secured funding to boost our growth. The MENA region is actively developing…Our goal is to cover as much territory by on-demand fast delivery as possible,” said co-founder Dovbenko, who is also CEO of iiko Middle East, a cloud-based POS for restaurants.
The startup’s dark stores are located in residential areas that make it possible for delivery persons to collect orders within three minutes after purchase, and to deliver to several households on each trip. The company has its own delivery unit that uses e-scooters and bicycles. The average order of everyday goods bought through YallaMarket is $15 (55AED), with fruits, dairy and drinks leading in popularity.
YallaMarket makes a profit on each item it sells as it sources its inventory directly from brands or through large distributors.
“We see that the level of development of the e-grocery in the UAE is far from Russia, where express delivery services have achieved incredible success. Over the past few years, it has become clear that the dark-store model is supposed to replace classic convenience stores,” said Dovbenko.
As it gains more data on user habits, YallaMarket is now investing in product development by implementing a “behavior prediction system” to customize user experiences and offers based on their preferences to reduce the time spent when making orders.
The concept of the instant delivery business model (quick commerce) grew exponentially last year as the pandemic fueled the adoption of online grocery shopping according to a Coresight Research report. The report says that “permanent gains” are expected as consumers continue shopping online even after the pandemic.
Fast and reliable delivery and availability continue to be some of the most important factors when shopping online, as noted by a majority of consumers surveyed in a recent PwC study. The study expects online shopping to continue to gain ground as people continue to work from home, and as they adopt new habits like shopping online. The report ranked grocery spending as the category which consumers expect their spending to increase followed by takeaway food.