When Gokhan Akan and his friends launched Yemeksepeti.com in their native Turkey at the turn of the century, they were a bit ahead of their time. The idea was great – using the internet instead of the phone to order food from restaurants to be delivered at home. But the timing was a bit off. The internet, which was in the dial-up modem era, didn’t have the infrastructure to cope with the demands of home delivery, even if it was beginning to be taken seriously as a retail platform in the developed world. The dot.com bust dealt a further blow to its credibility.
The times have changed
The fledgling company received orders just ‘five or six times a day’ and had to rely on cash from family and friends to survive, despite the fact that Turkey had a promising food delivery market. It took five years of struggle to reap the benefits of the e-commerce wave post- 2005-06, as greater internet penetration, faster connections and advanced mobile devices brought a sea-change in the scenario. Today, the website processes 60,000 orders a day and has 1.2 million registered users.
Fast-forward to the UAE in 2010, when Akan launched Foodonclick.com, a regional branch of the parent company, in Dubai. The portal has been witnessing 200% growth per annum, with operations spreading to five countries – the UAE, Oman, Qatar, Saudi Arabia and Lebanon – in three years and plans to cover the other GCC countries – Kuwait and Bahrain – soon, the expansion being funded by a $44 million cash inflow from New York-based growth equity firm General Atlantic last year. The site processed 147,000 orders in the UAE last year, a 300% increase over 2011.
However, it’s early days yet. Foodonclick.com has a long way to go before rivalling its Turkish parent, currently averaging just 600 orders per day and having 100,000 registered users – a number that’s growing by 2,500 every month – with over 800 restaurants available on its network across five cities.
But Akan is bullish on prospects in the region, given the rapidly-rising number of internet users – the UAE alone has six million – its attractive marketplaces with a large number of restaurants, and a delivery culture similar to Turkey.
“The idea is simple. We operate as a real-time, online intermediary between users and restaurants, our website being an up-to-date directory to browse different food delivery options in each listed neighbourhood. Our system enables users to conveniently order food online, thereby saving time and also minimising problems that may occur because of language barriers or human error while ordering food on the phone. It’s also cost-effective since users only need to have an internet connection to place orders online. Plus we are always able to provide accurate information to them since we update in real time – as soon as we receive information from the restaurants. Hence, there is no such thing as an outdated menu or prices,” says Akan.
Here’s how it works
Users have the option to check menus either by cuisine, location, restaurant name or special deals on offer, or make a self-customised order. They can also benefit from general or Foodonclick.com exclusive discounts and promotions offered by the listed restaurants. The service is free for users but the restaurant pays a commission based on how many orders it receives and fulfils.
“Foodonclick.com offers convenience by allowing users to search for food offerings by cuisine, location, budget or special offers and place orders seamlessly at no extra cost. The food is delivered to their home directly by the restaurant. It’s a very robust system in which we presently offer 20-plus cuisines through a network of over 800 restaurants in the UAE,” explains Akan.
This restaurant network includes global chains like Domino’s, Subway and Nando’s as well as regional or local restaurantslike Arz Lebanon, Just Falafel and Al Farooj Fresh.
“Users are generally sceptical to begin with. They doubt whether food will be delivered properly or on time. But once their orders are delivered quickly and accurately, they start using the platform regularly,” says Akan.
Currently, Foodonclick.com offers its services in Dubai, Abu Dhabi and Sharjah. The concept is also present in Qatar and Oman and more recently expanded to Lebanon and Saudi Arabia. In the near future, Foodonclick.com would also like to establish its presence in the wider MENA region.
“Of all these markets, Dubai is a very important hub from where we would like to undertake future international expansion. The emirate has proved a success story, largely because of its predominantly young population that is looking for convenience and accessibility in their fast-paced lifestyle. Moreover, Dubai has a truly cosmopolitan culture, with people from across the globe residing here, many of them already accustomed to using the internet. They use Foodonclick.com on a daily basis and I expect our 200% year-on-year growth pattern to sustain in the days to come as users increasingly shift to online delivery instead of using their phones,” observes Akan.
“However, we are still only scratching the surface and there is definitely potential for more rapid growth. In Turkey, we process close to 160,000 meals daily compared to around 2,500 meals in the UAE. We will continue to leverage the winning formula that people must eat daily, so they will order online on a daily basis as opposed to buying apparel, electronics and other products online, which they do once in a while,” believes Akan.
The growth is being catalysed by smartphone penetration in the region, which currently exceeds 60%. “More than 25% of our orders are placed through these smart devices, with the iOS platform currently being used by most of our visitors although Android is also catching up fast,” he reveals. It’s not just customers – restaurants also see an upside in collaborating with Foodonclick.com. “They instantly gain exposure to our 100,000 subscribers when they join us, which is a lucrative proposition, especially for newly-opened restaurants that often offer promotions to drive sales, which they can advertise on the site. Most listed restaurants have recorded 20% increases in food orders, on an average, since partnering with us. Their work is also made easier since the orders we pass on to them are accurate so they can concentrate on preparing and delivering good food on time and in a palatable manner,” Akan explains.
Users can also review the restaurants on the site on three parameters – quick delivery, presentation and taste. This valuable feedback enables the restaurants to better understand their strengths and weaknesses. “In addition, we provide strategic reports using data from Foodonclick.com that benefits them in terms of improvising their services, undertaking expansion and so on. Our central idea is to remain in sync with our users, understand their needs and offer them exactly what they are looking for while also benefitting our partner restaurants,” adds Akan.
The F&B sector is doing quite well in the region but, as in all businesses, there are challenges. “While market dynamics in Turkey and the UAE are quite similar, some key differences exist that we have incorporated in the Foodonclick.com business model. For example, the harsh Gulf summer keeps people indoors so they tend to order food home, whereas in Istanbul people prefer going out to dine since the weather is still pleasant during summer. Then Dubai is quite different from Saudi Arabia. So we have to bear in mind what users are looking for in every market we enter,” says Akan.
According to him, one interesting challenge is the internet itself, a space that is changing so rapidly. “We have to periodically update our website and the ordering platforms to keep pace with developments. For example, we recently rolled out a more user-friendly version of our website in Sharjah and will soon introduce it in Dubai and Abu Dhabi,” observes Akan.
There is also stiff competition from rival sites that a liberal economy inevitably gives rise to. “Our endeavour is to stay ahead in the race by remaining close to our users and meeting their evolving demands. Our goal is simple: when people decide to order food online, the first name to figure in their mind should be Foodonclick.com,” he concludes.