Kenya: How Uber Eats Is Transforming Online Food Delivery Business in Kenya
Nairobi — Sitted at home or in the office and feeling hungry. Worry no more as you can order food online and get delivered on your doorstep.
Ordering through online platforms such as Uber Eats and Bolt Food saves customers longtimenof looking for meals.
Uber Eats is one of the tech companies that is transforming food delivery services in the country through the power of technology.
Through this, it has partnered with a myriad of restaurants, whether big or small, and delivery guys to simplify lives of millions.
Capital Business had an interview with the Country’s General Manager Wangui Mbugua and this is what she had to say:
Briefly explain to us the current state of the Kenyan food delivery industry?
That’s a good question. I would say that the online food delivery market is a sunrise industry, with the potential for massive development and expansion, not just in Kenya but across the continent, and delivery in general, extending beyond food into other items like groceries, alcohol, pharmaceutical products.
Hospitality is one of our region’s biggest growth opportunities and with a huge and quickly growing middle class, the food and beverage industry in Kenya is set for substantial growth.
With the market developing, I think there is the growing need for access to new and international products.
We have lots of new supermarkets, grocery stores, convenience stores, new restaurants and new players constantly being launched.
We believe food should be delivered where life takes you. And based on our data. We see this as a trend across the country, not just in Nairobi, we are priding ourselves in building locally, but using global expertise to do so.
And we do know that each country’s needs are super unique. So we’re taking the time to understand each of the market needs so that we can be responsive and adapt accordingly.
Currently, Uber Eats in Africa is based in South Africa, and Kenya.
So, we’ve just scratched the surface so far, and there is virtually unlimited potential for Uber Eats to grow in the coming years.
As Uber Eats, how has your post Covid-19 recovery been?
Yeah, I think the pandemic was such a fundamental part, or had such a fundamental impact on how businesses operate and provided lots of businesses including our own, with valuable lessons.
Perhaps the most worthwhile of these lessons that we took to heart was diversification.
As a way of securing our business sustainability and success in an increasingly fast changing global business environment.
Business Growth actually did take off an orders in 2022, did grow by about 5.2 percent year on year, while our revenue grew by about 21 percent year on year, as well.
And this was largely driven by a steady increase in first time consumers but also by our deliberate upscaling and diversification of our platform, through working with our key restaurant partners, and the addition and expansion of what we call new verticals, which is non food.
So grocery convenience, alcohol, pet food, pharmaceuticals. And the growth of that segment as well really lended itself to the growth post pandemic.
Primarily, we were known as a food delivery marketplace and we did pivot during the pandemic and thereafter and we’ve now grown into an on demand convenient marketplace, where businesses and customers connect, as well as our courier partners.
It’s a hassle free platform, very user friendly and provides an array of products to our customers. While in general, the overall delivery industry has been experiencing a shift towards e-commerce.
I do believe the pandemic accelerated this trend and highlighted that on demand delivery was more than just a convenience play. It was a necessity for consumers, partners and businesses alike.
Over the two past two years, I think delivery of anything I think from toiletries to pantry staples has become the new normal and they and is only expected to rise.
Our customers continue to seek flexibility in their experience and we are super ready to respond to this demand.
Consumer behavior has experienced a significant shift. During the pandemic and post pandemic, we are committed to providing our consumers, our merchants, our delivery people with the support and resources that they need to make sure that they can maximize the delivery opportunity and succeed long term.
We definitely know that the success of our platform during the pandemic and post pandemic would not have been possible.
Without the dedicated community of delivery people that have chosen Uber Eats to operate their businesses.
And we are really proud of the strides we’ve made to improve the platform for our courier partners or delivery people or enters any of those terms are fine. And we are honored.
Which are the most popular meals ordered on the platform and why?
So the latest consumer trends on Uber eats have shown us that customers or consumers use the platform to order a variety of items to their doorstep, this range from vegetables, cauliflower, tomatoes, all the way to aluminium foil all the way to hot wings all the way to baking flour all the way to cold and flu medicine, vitamins and so on.
The most popular cuisines we’ve seen are American so the usual chicken, pizza, burgers, Italian, Japanese, Indian, Chinese African cuisine as well is really doing well.
And in terms of other consumer trends we’ve seen I think, some fun facts are the most expensive basket size we’ve seen has been about are approximately Sh59,000, the highest amount of items ordered by one person are north of 500.
The most popular grocery items we do see on our platform are tomatoes, sugar, avocados, and red onions.
And some of the other trends we’ve seen are the most popular time of the day for alcohol is between seven and 8pm. No surprise there.
Yeah, and, and I do think there’s lots of other interesting consumer data we’d be happy to share or chat about.
What are the number of restaurants currently on boarded onto the platform?
I think for us this is sensitive competitor information. So I would say it’s approximately 1,000.
And with continuing expansion into new categories, such as pharmacies, convenience stores, beauty and wellness stores, bookstores and more, this will only continue to grow.
In Nairobi, which areas register the most orders through the platform?
Again, this is sensitive competitor information which we cannot reveal. But Nairobi in general is doing quite well and growing.
Since Uber lowered commission for cab drivers amid high fuel costs, among other things, was this also extended to courier delivery guys as well as cyclists?
Great question. So we do know that the recently implemented ride hailing regulations by MTC and the Ministry of Transport only covered mobility and only covered our mobility business.
However, as Uber Eats, we’re continuing speaking to our owners to find ways of supporting their businesses as much as possible.
So examples are we’ve recently launched direct earnings disbursement via M-Pesa.
For drivers and couriers, which will see them receive and collect their earnings faster without incurring bank transaction charges.
We also continually look at the earnings opportunities for our owners, and look for ways to optimize this apart from Nairobi.
Apart from Nairobi, are you also looking to expand to other towns in the country? If so, which areas are you interested in?
We are always interested in extending the benefits of delivery to as many consumers as possible, and we will share any updates in due course this year.
What are some of the challenges that the food delivery industry is currently facing?
Well, as one of the fastest growing regions in the world, that is the African continent, we found that each country offers its own unique opportunities and challenges.
We do believe that the key to success lies in our ability to continuously utilize our technology to improve the experience of internet delivery people and users on the app, we’ve seen that the online food delivery market has the potential for massive development and expansion not just in Kenya but across the continent.
And for us, this provides an opportunity to work with local partners across the region. From our research, we have seen that consumers wanted a diversity of offerings to satisfy their cravings.
So being able to provide a diverse selection on your platform is a key one. I think also being able to work alongside restaurants and merchants to identify any selection gaps in the cities where they operate.
And then this ability to launch data driven approaches for partners is also a big one.
An interesting development we’ve seen has been the popularity of virtual kitchens across the world, which we now see our local entrepreneurs embracing, as able to test an experiment to their menus incredibly, easily, leverage the feedback tools and data that the Uber Eats platform provides continuously optimize their product market fit while offering, you know, new variety of food for every taste, bud.
So quite a lot happening in the industry, I think being able to balance the ecosystem. Since we do have, you know, the three players in the marketplace, the consumer, the courier or delivery person.
And the merchant is also a key challenge which we continue to navigate with our really, really strong technology, and smart tools as well as a really strong data driven approach to every single decision that we do make.
How are we coping with fierce competition from competitors such as global and bold foods?
What makes Uber Eats the go to platform in the market? Yeah, since we launched in 2018, we started by only having restaurants on our platform. But we’ve since expanded this to a lot of new categories.
And this is a testament to our global motto that one can truly get anything on Uber Eats.
So we have supermarkets, beauty and wellness outlets, such as Chandarana, Artcafe, gas and water delivery outlets, books workshops, such as textbooks center, office supply stores, such as office Mart, pharmacies, such as pharma plus and vital pharmacy.
So this extension into new categories for us has unlocked unique growth opportunities. And this has started to differentiate ourselves.
We’re also proud of our technology overall, and have really amazing technology on the backend for our merchants and our engineers to be able to truly get the data they need to optimize their businesses.
Furthermore, we’re always innovating and launching new product features for our consumers so that they have a seamless experience.
Some examples of this are group ordering, where you can enter the annoying challenge of choosing everyone for their orders to split the bill.
And you can sort of put set deadlines on. For group orders and auto reminders for everyone to place the orders, you can share your delivery, to allow cars to allow consumers to easily send treats and share the status of a delivery with a simple tracking link.
You can schedule your orders in advance so that they are then prepared and delivered at a time of your choosing. You can also look up restaurants according to specific criteria like speed, price, dietary constraints, we have lots of opt in features where you can opt in for utensils or not.
And this also ties into our sustainability mission. And then overall, we have worked tremendously hard on developing strong operations when it comes to the delivery experience.
So ensuring that deliveries are timely, done in a speedy way and are effective and that consumers have a seamless experience, as well as all the information they need from when they place their order to when they receive their order.
I think for us the past few years have been significant in that we’ve drawn key lessons on how to transform our business to keep up with the changes in the consumer and economic landscape.
Remember, we are addressing or servicing consumers from all age groups and all demographics.
So Gen Zs, millennials, boomers, etc. So making sure that we’re innovating to meet our consumers needs has been really important. doubling down on new categories and showing our apps performance is really really superior.
And the significant positive performance we’ve achieved through this multi pronged strategy is definitely a testament testimony to the value that this thought process has brought us.
What is your outlook for the year in the food delivery sector?
I think when we consider the potential that exists in Africa from a delivery and ecommerce perspective, and the transformative role that technology platforms like ours can play across the continent, we are extremely proud of how presence has helped impact Africa’s economic and social contours.
We know that revenue in the online food delivery market is projected to reach $462 million.
In 2023, we will meal segment showing a revenue growth of about 51.6 percent in which 24 and the users as well as to grow to 25 million users by 2027.
So we are excited for the food delivery sector and beyond. It is now just overall delivery versus food delivery.
And we are now clocking five years this May in Kenya.And it’s been really a thrilling growth experience as when we first launched we didn’t realize the impact we would have on our consumers, our delivery people and our restaurant partners.
So very, very optimistic about delivery, going forward and very excited to be a part of shaping that journey.