Online delivery is ‘new normal’ in Middle East says ride-hailing firm behind grocery platform

By Guan Yu Lim contact

- Last updated on GMT

Between April to June 2020, Careem Shops observed a higher demand for daily necessities such as fresh produce and frozen goods  ©Careem
Between April to June 2020, Careem Shops observed a higher demand for daily necessities such as fresh produce and frozen goods ©Careem

Related tags: Uae, Middle east, grocery delivery

UAE-based ride-hailing and food delivery company Careem, which recently launched its grocery delivery service (Careem Shops) has revealed about 40% of its 33 million users are now on the new service.

Careem Shops was first launched in Dubai in April 2020, in the middle of the COVID-19 pandemic, and has since expanded to Saudi Arabia (Jeddah, Dammam, Riyadh), Jordan (Amman) and Pakistan (Karachi).

Between April to June 2020, the firm observed a higher demand for daily necessities such as fresh produce and frozen goods.

Gheed El Makkaoui, general manager of Careem UAE told FoodNavigator-Asia​: “Online grocery shopping became the norm for many UAE consumers starting March this year, we believe it is part of our new normal now given the convenience, safety and ease it offers​.”

Merchants on Careem Shops include Lulu Hypermarket, 7-Eleven, 800-Pharmacy, Al Manara Pharmacy, Nescafe, The Pet Corner, Rootz Organics, Four Seasons Pharmacy and others.

It works in the same way as its food delivery service (Careem Now), where users choose their preferred merchants, add items to their basket and checkout.

The groceries will then be delivered straight to consumers’ house, with an average wait time of 45 minutes.

The deliveries are made by both Careem’s ride-hailing drivers as well as its food delivery drivers. El Makkaoui said: “Due to the pandemic and total lock down in almost all cities across the region, we found deliveries as an opportunity for ride-hailing captains to make an earning​.” Captain is the name that Careem gives to its drivers.

El Makkaoui told us the firm was in discussions with other supermarkets, pharmacies, roasteries and pet shops to add onto its platform, and hoped to expand this service to more cities in the future.

Accelerate digital

This online grocery service is part of Careem’s ‘super app strategy’. Recently, the firm announced a US$50 million investment to develop its super app, by combining all its transport (car, bike, rickshaw), product (food, grocery) and money (bill payment, peer-to-peer transfer) services into one platform.

El Makkaoui told us that the investment would be used to expand its store offerings and ensuring a fast, safe and hygienic delivery, amidst the ongoing pandemic.

Mudassir Sheikha, co-founder and chief executive officer at Careem said its super app strategy aims to be similar to those in China, Europe and US, where 20 to 40% of spending were done on digital platforms, unlike the Middle East region which only sees 2 to 3% of digital payments. The ongoing pandemic is also said to accelerate the adoption of digital payments.

On the future, Sheikha said: “We see many tech companies start in one place and expand to many others. Amazon started by selling books and they do many more things, but they still sell books. For us, transportation, ride-hailing is at the core of who we are, but from that base we are going to offer more and more services to make it easy for people to lead their lives more holistically and focus on things that matter​.”

Careem’s ride-hailing service is currently present in 100 cities, with 33 million users, and more than one million drivers.

Wamda earlier reported that Careem had suffered an 80% drop in revenues during the lockdown period, resulting in 31% of its staff laid off.

Related topics: Market Trends

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