Egyptian startups use technology in food sector innovation
Egyptian startups are betting on digital solutions to drive business growth in the local and regional food sector, which has mostly operated offline and is in dire need of digitization to increase efficiency and productivity and reduce costs.
The ultra-fast delivery model is still a relatively new concept in the Middle East and North Africa (MENA) region, according to Yasmine Abdel Karim, co-founder of on-demand logistics and delivery startup Yalla Fel Sekka (YFS).
“It is present in Southeast Asia and Latin America, but it was not yet reflected in Africa and the MENA region. That’s why it’s a very exciting market [for us and investors alike]she told PYMNTS in an interview.
Read more: Ultra-fast delivery model creates new opportunities for on-demand services in the MENA region
The business-to-business-to-consumer (B2B2C) startup, launched in early 2020, now fills this gap by enabling businesses such as e-commerce companies, supermarkets and pharmacies to sell to their customers by leveraging its network of dark mini-warehouses and stores.
So far, YFS has quickly caught on with enterprises. To date, the company has made over 2 million deliveries through its network of 1,000 active motorcycle and van drivers and currently operates in five cities across Egypt: Cairo, Giza, Alexandria, Mansoura and Tanta.
See also: Food delivery service in MENA bucks global downward trend as European firms pull back
In another example of an Egyptian startup leading the way in the MENA region’s food sector, Cairo-based cloud cooking service provider The Food Lab helps aspiring restaurateurs minimize costs, increase margins and improve operational efficiency by giving them access to shared and managed dark kitchens.
Related: Cloud Kitchen Software Helps MENA Restaurants Optimize Costs and Expand Reach
According to The Food Lab CEO and co-founder Ahmed Osman, third-party aggregator costs — often between 25% and 30% — are so high they leave restaurants with a measly 0% to 5% margin. . This, he said, ultimately deters potential business owners and operators from venturing into the food business because of the time it will take to break even.
But from a margin of 0% to 5%, Osman told PYMNTS that the firm’s customers can now earn 15% to 20% without having to incur the capital expense or risk involved: “It’s is a pure revenue share model, which means that every time you sell, I take my cut; if you don’t sell, I don’t get a discount.”
And earlier this year, Cartona, an Egyptian B2B e-commerce marketplace for the fast-moving consumer goods (FMCG) space, partnered with multinational consumer goods company Unilever to help boost the number of offers from retailers, suppliers and distributors in its B2B marketplace.
Read more: Egyptian B2B e-commerce startup Cartona partners with Unilever
The retail technology company, which raised $12m in Series A funding last month, is seeking to digitize the country’s mostly offline-operated shopping system as part of broader plans to disrupt the market Egyptian retail of $120 billion, according to a PYMNTS report.
See also: B2B marketplace Cartona raises $12 million for expansion
“This cooperation [with Unilever] enables both parties to offer unique solutions, revolutionizing Egypt’s traditional commerce and expanding our potential user base in various governorates,” Cartona CEO Mahmoud Talaat said of the agreement.
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