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The company entered the Egyptian market in 2017 through its acquisition of Otlob, as part of a deal with Rocket Internet’s food delivery businesses.7.
ArabFinance interviews Sofiène Marzouki, managing director at Delivery Hero, to explore the aftermath of the rebrand from Otlob to talabat, the pandemic’s driving force, and the company’s investment plans.
How do you evaluate the online food delivery market and its potentiality in Egypt compared to its regional peers, in terms of size, growth potential, and maturity?
Egypt represents a market of vast and untapped opportunities. In fact, it has the highest potential of all the markets that we operate in, and we are continuing to invest significantly in the country to stimulate growth in a range of delivery-related sectors.
Many restaurants still use phone orders as the primary means for takeout or delivery, and we are looking forward to helping them transform their way in line with the Egyptian government’s digitalization efforts. This will ultimately lead to an increase in their orders, visibility, capabilities, while helping them to be more profitable and expand their business.
Can you tell us about your journey in Egypt, your recent acquisition of Otlob, and the motives behind it?
We have been operating in Egypt since 2017 and have been continuously strengthening the organization in Egypt since then.
Rebranding from Otlob to talabat has been much more than simply changing our name, it has included unifying our regional and international know-how to best serve the Egyptian market through providing amazing experiences to our entire ecosystem, customers, restaurant partners, riders, employees, and the communities where we operate.
One of our major synergies is that Egypt's talabat app had a major upgrade, bringing it in line with the rest of the region by giving the people of Egypt an enhanced and improved ordering experience.
We continue to heavily invest in other areas to create value for our ecosystem to continue to provide amazing experiences.
How are your clients responding to the rebranding? Were there any challenges in this regard?
Since our rebranding, we have seen a huge appeal from our customer base in Egypt, and are really excited that the country is as positive about this transition as we!
We invested heavily in our offering to make sure we are creating the best experience possible for our ecosystem, which created a very positive response to our platform. We are present in 26 cities, which is a great contribution for customers in these areas and we are working hard every day to make sure that talabat Egypt is the perfect platform for our customers to order from.
Generally speaking, what are the challenges you faced when you entered the Egyptian market? How do they differ from the challenges you encountered in the region?
Every market has its opportunities, rules, and challenges. Otlob has been operating since 1999, which makes it the oldest online food delivery platform in the region. So people were already aware of online food delivery and as they’re becoming more digital-savvy, the opportunity is massive here. The pandemic is a testament to that!
Tell us more about your business volume in Egypt?
As we are publicly listed, we can’t comment on profits but what we can say is that food delivery aggregators remained operational in most of our markets including Egypt despite the pandemic, and we were able to be the industry leader in safety.
Combined with the fact that people in the region needed to stay home and stay safe, our customer base grew regionally by 20% and we expect this number to keep increasing.
Do you plan to expand to more cities in Egypt? How do you view the potential vs the challenges in smaller cities in Upper Egypt and Delta, for example?
We’re currently operating in 26 cities which means we cover most of Egypt. We are working on enhancing our logistics to ensure we’re reaching all of our customers nationwide.
As previously mentioned, Egypt offers tremendous potential, but of course, there are challenges to running a business like ours. We’re working on onboarding more partners, finding logistic solutions to avoid traffic delays, and creating employment opportunities. By the end of 2020, talabat will have approximately 20,000 additional restaurants, which in turn means more varieties to cater to all of our users cross-country.
Do you have a plan to launch talabat Mart before the end of this year? Tell us more about this service and when it’s expected to be rolled out?
That’s correct, talabat will be initially launching talabat Mart (tMart), our quick commerce (q-commerce), delivery-only concept, in Cairo. tMart enables people to order their groceries 24/7 and have them delivered to their doorstep within 30 minutes.
Q-Commerce - our own concept - is essentially the natural successor of e-commerce. Offering ultra-fast delivery through hubs across the city, q-commerce offers unparalleled convenience to our customers. We have already rolled out tMart in some of our other markets such as Bahrain, the UAE, and Kuwait.
tMart will be coming to 4 cities and we aim to have more than 20 stores by mid-2021. We are very excited to bring this change to Egypt and have no doubt that it will be a game-changer for the market.
How has the pandemic impacted your operations?
During COVID-19 and as everyday life was severely impacted, orders decreased heavily at the start of the pandemic and we saw a huge revenue drop as customers were cautious about ordering in. It was a hugely tough time for our restaurant partners, with a knock-on effect on ourselves.
The safety of our ecosystem continues to be of the utmost importance through the pandemic, and we have taken a leadership position for the industry in that regard.
We were the first in the region to introduce gloves, masks, and sanitizers for our riders and solutions such as contactless delivery from the start. We were constantly liaising with governments to raise awareness about high industry safety standards and the importance of allowing food deliveries even after curfew. As people have understood the safety precautions around the preparation and delivery of food, the orders have returned to near pre-covid levels.
Furthermore, we invested almost 2.5 times in our marketing efforts to support our restaurant partners. Our most recent campaign is a discount campaign alongside the renowned band Sharmoofers to highlight that customers can enjoy discounts throughout the holiday season. All in all, it’s all about understanding your audience and reaching them in new ways.
What are your future plans, locally and regionally? Has the pandemic shifted any of your investment plans?
Whilst the pandemic had a huge effect on our plans in 2020, we can say that we recovered quite quickly and are currently in a strong position to keep on doing all that we can for our ecosystem in 2021.
Furthermore, we recently announced our launch in Iraq, with operations kicking off in January 2021, and this is a testament to our incredible team’s efforts throughout COVID-19.
In regards to our plans locally, we have a few interesting partnerships coming up when it comes to youth, health, and employment. Our aim is to continue to redefine the way Egyptians experience ordering food, groceries, and more online.
With this change, we bring a new mindset. Our goal is to provide Egyptians with a truly world-class experience, based on affordability, variety, and speed.
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