Food delivery apps shine like a bright diamond in the realm of on-demand applications. Since the inception of online food delivery, several apps have made their way into the market. Some of them have shut down, some are surviving, and some are point black dominating. Talabat is one of them when it comes to the Middle East.
In this post, we’ll delve deep into Talabat’s business and revenue model and why you should invest in Talabat-like app development.
- Food Delivery Apps in the Middle East: Past, Present, and Future
- The Rising Demand for Apps Like Talabat
- About Talabat App: An Overview
- Talabat Business and Revenue Model
- Business Model of Talabat
- Revenue Model of Talabat
- Talabat Features List
- Why Should You Invest in Talabat-Like App Development?
- How Much Does It Cost to Develop a Talabat-Like Food Delivery App?
- Why Choose Esferasoft for Talabat-Like Food Delivery App Development?
Food Delivery Apps in the Middle East: Past, Present, and Future
The online food delivery market is surging worldwide, and the Middle East is no different. The demand for online food delivery in the Middle East and North African (MENA) nations is on the rise, with Saudi Arabia, UAE, and Kuwait being at the forefront.
Image Source: Statista
Let’s crunch some numbers to provide you with a better idea of the food delivery market environment in MENA.
- The online food delivery market in Saudi Arabia is projected to reach $2.25 billion in 2024, with a CAGR of 8.2%.
- The UAE food service market was valued at $15 billion in 2019.
- The Restaurant-to-delivery segment in Kuwait is projected to reach $519 million by 2024, with a CAGR of 26.3%.
Besides, a report by The Business Research Company showed that the global online food delivery market could reach $154.34 billion in 2020. These numbers extrapolate that the global food delivery market will grow in the 2021-2024 forecast period, and the middle-east region will play a crucial role in this rise.
Now, what has led to the increasing popularity of online food delivery in the Middle East? Here are the three main reasons:
- The rise of the global online food delivery market
- The growth of online shopping and eCommerce in MENA
- The increasing demand for food delivery apps like Talabat
The Rising Demand for Apps Like Talabat
Of the three factors discussed above, the increasing demand for Talabat-like food delivery apps has been the biggest driver of the food delivery sector’s growth in the Middle East. Talabat is the biggest player in the market.
Earlier, the Middle East had three main food delivery services: Uber Eats, Talabat, and Zomato UAE. But in March 2019, Delivery Hero Group-owned Talabat acquired Zomato UAE, giving it a massive boost and majority market share in the region.
Uber Eats, which is regarded as one of the best food delivery apps in the world, had to shut down its service in Saudi Arabia, UAE, and Egypt. The service provider wasn’t able to keep up with the fierce competition and the increasing dominance of Talabat.
Another factor for Talabat’s massive success is its exclusivity. Talabat has put clear conditions that it’ll partner with only the restaurants that agree to cancer their partnerships with other food delivery apps like Deliveroo and UberEats.
Nowadays, businesses don’t want to get sandwiched between multiple delivery services, so they’re moving to exclusive partnerships.
Apps like Talabat are also in high demand because they offer more than just on-demand restaurant listing. Talabat organizes on-demand delivery partners to facilitate food delivery. Restaurants can decide the delivery partner that will deliver their food orders.
About Talabat App: An Overview
So, what is Talabat, and what’s so special about it? Talabat is a Kuwait-based food and grocery delivery company founded in 2004 by Abdulaziz Al Loughani. It operates in seven countries: Kuwait, Saudi Arabia, UAE, Qatar, Bahrain, Oman, and Jordan.
For the most part, it works similar to other globally renowned food delivery apps like UberEats and GrubHub. Restaurants can list themselves on the platform, and customers can order food from the restaurants for their choice.
Talabat is available in the form of a website and mobile app for Android and iOS. In addition to food delivery, it enables the hiring of delivery persons and managing logistics.
Talabat Business and Revenue Model
In this section, we’ll discuss the business and revenue model of Talabat. Let’s begin with the business model first.
Business Model of Talabat
Talabat’s food delivery side of things is similar to other popular food delivery apps. Here’s how the process works:
- Restaurant partners with Talabat and lists itself on the platform.
- The customer registers on the app and browses dishes from his favorite restaurants.
- The customer selects the dishes, chooses the payment mode, and confirms the order.
- The restaurant receives the order and starts preparing the meal.
- The restaurant chooses the delivery person to deliver the order.
- The delivery person picks the order from the restaurant and delivers it to the customer.
- The customer gets real-time order status updates.
The on-demand delivery model also works the same way. The delivery service providers partner with Talabat and list themselves on the platform. The restaurants can browse from the delivery providers and select the one they like.
Target Customers: Talabat targets people who prefer to order food online instead of walking in restaurants to collect their orders. The customer base mainly includes Gen Z and millennials who want warm and delicious food delivered to their doorstep.
Revenue Model of Talabat
Like most food delivery services, Talabat relies on three revenue streams: commissions, delivery charges, and advertisements. Let’s understand these components in detail.
Talabat doesn’t have a flat commission model. It charges 15-25% of the total order amount from the restaurant. However, Talabat focuses on exclusivity. So, restaurants that partner exclusively with Talabat get a 5-10% reduction in commission rates.
The commission charged by Talabat on every order depends on multiple factors, such as restaurant location, order frequency, reliance on the restaurant, etc.
2. Delivery Charges
Talabat charges a delivery fee on every order. The delivery charge is not fixed and depends upon factors like the distance from the restaurant and environmental conditions. The rates are higher in the case of a storm, late-night delivery, or high demand.
Talabat enables customers to cut down and eliminate delivery charges by ordering above a threshold amount. This is a prevalent strategy used by many other food delivery providers.
3. Advertising Costs
Talabat offers two types of advertising opportunities to restaurants: priority listing and banner ads. In the priority listing model, the restaurant gets a chance to appear on the top of the restaurant listings.
Banner advertising, as you probably already know, involves showing banner ads within the app. Talabat deploys these two models to generate advertising revenue.
Talabat Features List
Talabat has a comprehensive range of features and modules divided across four panels:
- User Panel
- Restaurant Panel
- Delivery Boy Panel
- Admin Panel
Let’s explore the key features of each panel.
1. User Panel
The user panel comprises the following features:
- Login and signup
- Setting pickup location
- Cart selection
- Offers and discounts
- Order status and tracking
- Contact information
- Part orders
- Review screen
- Multiple payment methods
2. Restaurant Panel
The restaurant panel consists of the following features:
- Accept or decline orders
- Accept payments
- Dedicated restaurant account
- Order requests
- Calls and chat
- Push notifications
- Order history
- Delivery boy information and real-time status
- Transaction history
- Withdraw payments
3. Delivery Boy Panel
The delivery boy panel comprises the following features:
- Order status
- Commit or cancel the order
- In-app call preference
- Multi-payment mode
- History maintenance
- Revenue history
- Ratings and tips
4. Admin Panel
The admin panel consists of the following features:
- User accounts
- Content management
- Discount functionality
- Coupon codes
- User management
- Location tracking
- List of orders
- Order processing
- Push notifications
- Reports and analytics
- Revenue management
5. Additional/Miscellaneous Features
In addition to the panel-specific features discussed above, an app like Talabat can have additional features, such as:
- CRM Integration
- CMS integration
- Loyalty program
- Application Personalization
- Security Guarantee
- Multi-Currency & Language Support
- Cloud Environment
- Social Sharing & Registering / Entering
Why Should You Invest in Talabat-Like App Development?
If you’re a business owner, entrepreneur, or solopreneur, investing in Talabat-like app development can lead to numerous opportunities. The food delivery sector is growing, and the next four to five years have a lot in the store for online food delivery businesses.
Here are some top reasons to invest in on-demand food delivery app development.
1. Guaranteed Growth
As mentioned earlier, the food delivery market is booming, not only in the Middle East but worldwide. Yes, the market is largely dominated by Talabat, but there’s always room to break in. If you come up with a unique, innovative idea, you can experience substantial growth.
Another reason why a food delivery business is destined to succeed is the increasing number of people ordering food online. With COVID-19, in hindsight, rarely anyone wants to go to a restaurant to dine or pick up food. Everyone is ordering food online, which has given birth to numerous opportunities in the food delivery sector.
2. Easy to Get Investment
Zomato UAE had grown big in UAE and probably would’ve outranked Talabat in the future. To neutralize competition, Talabat acquired Zomato UAE.
Moral of the story? Investors are continuously looking for on-demand food delivery apps. If you have an amazing idea, you can raise a significant amount of capital to support and scale your operations.
3. Endless Possibilities
As discussed, Talabat generates revenue from three income streams. And the interesting fact is that the company hasn’t even exploited all the revenue options. Here are some common revenue models you can deploy in your on-demand food delivery app.
- Commissions from restaurants
- Delivery charge
- Transactional commission from customers
- App subscription fee
- Peak hour fee
- Sponsorships and partnerships
You can also develop exclusive relationships with restaurants like Talabat does. Now, of course, you don’t need to deploy all the revenue models at once in your app. Select the best revenue stream that suits you depending on your customers and the business environment.
4. Seamlessly Target Millennials and Gen Z
We live in a time where the youth has outnumbered middle-aged adults and baby boomers. The worldwide Gen Z population in 2020 was 2 billion, followed by 1.8 million millennials. Together, they make up 3.8 billion, which is more than half of the world’s population.
What’s more, most purchase decisions in today’s age come from the younger generation. And since these younger customers are the majority of consumers of food delivery services, a food delivery app provides you with an excellent opportunity to target them. So, if you’re looking for a youth-centric business model, an on-demand food delivery app is your way to go.
5. Employee-Friendly Business
When you launch an on-demand food delivery business, you provide more than better earning opportunities for restaurants and a seamless food delivery experience to customers. A food delivery business enables you to generate employment and job opportunities.
COVID-19 continues to wreak havoc on the job market, as the world lost more than 600 million jobs during the second and third quarter of 2020.
To run an on-demand food delivery business, you need delivery agents. So, you can increase employment in your country and locality. Besides, you can provide a flexible working opportunity for your employees.
Your delivery agents can work either full-time or part-time and earn incentives on completed deliveries. Customers can also tip the agents for their efforts.
6. Global Opportunities
Talabat acquiring Zomato UAE is just one example. In the US, Uber acquired Postmates, one of the biggest food delivery apps in the country. Nowadays, online food delivery is booming in every country, and people like options. So, entering the food delivery sector comes with a plethora of global opportunities for you to explore.
How Much Does It Cost to Develop a Talabat-Like Food Delivery App?
If you’re looking for a ballpark figure, it can be anywhere between $10,000 and $100,000. However, depending on your requirements, the cost can end up being lower than $10,000 or cross the $100,000 mark. Several factors affect the cost of development, such as:
1. Type and Size of App: The type, size, and complexity of the app will govern its cost of development. Hybrid apps with simple functionality are less expensive, whereas native applications with complex functionality tend to cost more.
2. Platforms and Devices: You can develop a mobile app for myriad platforms, such as Android, iOS, Windows, Blackberry, Android TV, wearables, and more. The more devices you choose, the more the costs will rise. Developing and maintaining a website, if you decide to make one for your business, will also add to your operational costs.
3. Structure of a Team: You can either hire a freelance developer or a full-fledged on-demand app development company like Esferasoft for your project. Freelancers are cheap and often unreliable, especially if your project is large-scale. Companies, on the other hand, have an entire team, including a project manager, app developers, QA engineers, UX/UI designers, and more. For this reason, development companies charge more.
4. Location of the Developer: The same quality of app development costs $10-80 per hour in South Asian countries like India and Indonesia, $50-150 per hour in Western Europe, and $100-250 per hour in the US.
5. Features: As discussed, a typical food delivery app has four panels: user, restaurant, delivery, and admin. Each panel has a set of features. Developing an app with more panels and features will cost more. Hence, feature-rich apps are costlier to develop.
6. Post-Development Expenses: Developing an app is just the beginning. You’ll need to launch the app, market it, and continuously upgrade it to ensure customer satisfaction. All these add-ons come with additional costs depending on the developer.
Technology Stack for On-Demand Food Delivery App
The technology stack you deploy will depend on the type, platform, and requirements. That said, here are some general elements a technology stack for an on-demand food delivery app would consist of.
- Backend Development: Languages, frameworks, web servers, database management systems
- Android Development: Kotlin, Java, Android Studio, Android SDK
- iOS Development: Objective-C, Swift, Apple Xcode, iOS SDK
- Hybrid Development: PhoneGap, Ionic
- Payment: Stripe, Braintree, PayPal
- User Location Finding: Google Places API
- Direction Finding: Google Maps, MapKit
- Registrations: Gmail SDK, Facebook SDK
- Storage: AWS, Azure, Google
- Analytics: Google Analytics, FireBase
Why Choose Esferasoft for Talabat-Like Food Delivery App Development?
So, you have a unique on-demand food delivery app idea in mind. Now what? Is your idea viable? What about analyzing the competition?
And even if you sort these things out, you’ll have the monstrous task of developing a full-fledged food delivery app from scratch. Sure, you can try getting it developed in-house, but then you’ll be losing out on the expertise and experience outsourced developers bring to the table. Besides, in-house development is almost always more expensive.
Esferasoft can help as we have over a decade of experience in on-demand app development, we offer the perfect blend of expertise, innovation, and flexibility. Our client-focused solutions help you turn your dream food delivery app idea into reality.
Here’s why you should choose Esferasoft as your technology service provider.
- White label solution
- One-time cost
- Own your code
- Free technical support
- Customizable and scalable
- Save time and money
Note: This is to clarify that Esferasoft Solutions is not involved in the development of the Talabat app and in any other way. Our team of experts reviews the successful on-demand businesses and shares their insights and understanding via the Esferasoft blog. However, if you have a similar project idea in your mind, then you can discuss the same with us and, our ready to launch on-demand solutions can be helpful to you. Contact us to know more.