Yallamarket Expansion: Saudi Arabia and Qatar Next for Quick-Commerce Startup

YallaMarket's Expansion Plans Across the Gulf Region

YallaMarket, a quick-commerce startup headquartered in Dubai, is strategically planning to broaden its reach throughout the United Arab Emirates (U.A.E). Furthermore, the company intends to launch operations in both Saudi Arabia and Qatar within the coming year, capitalizing on the growing demand for rapid and convenient grocery solutions.

Rapid Growth and Dark Store Network

Formally launched just last month, the startup is currently focused on expanding its presence within the U.A.E.’s major cities, Abu Dhabi and Dubai. This expansion will involve the establishment of an additional 100 dark stores, facilities designed to facilitate 15-minute delivery services.

These dark stores function as dedicated order fulfillment centers for online retailers, remaining inaccessible to direct customer traffic but playing a crucial role in accelerating order processing. Currently, YallaMarket operates two dark stores, with plans to open two more within the next fortnight.

Funding and Future Initiatives

The company will utilize the $2.3 million secured in its pre-seed funding round to support its expansion efforts within the U.A.E. This funding round was jointly led by Dubai Angel Investors and Wamda, with contributions from several angel investors specializing in the Middle-East and North Africa (MENA) region.

Looking ahead, YallaMarket is also preparing to introduce a line of ready-to-eat meals, which will be accessible for ordering through its mobile application.

Founding Team and Expertise

YallaMarket was founded by Leonid Dovbenko and Stanislav Seleznev, both Dubai-based entrepreneurs of Russian origin. They also previously established DocsinBox and Tawreed, companies specializing in restaurant automatization services.

Strategic Vision and Market Opportunity

“Our primary focus will be leveraging the newly acquired funding to accelerate our growth trajectory,” stated co-founder Dovbenko, who also serves as CEO of iiko Middle East, a cloud-based point-of-sale system for restaurants. “The MENA region is experiencing significant development, and our objective is to provide on-demand fast delivery services across as much territory as possible.”

Efficient Delivery Logistics

The startup’s dark stores are strategically positioned within residential areas. This allows delivery personnel to collect orders within a mere three minutes of purchase and efficiently deliver to multiple households per trip.

YallaMarket maintains its own dedicated delivery fleet, utilizing e-scooters and bicycles. The average order value for everyday goods purchased through the platform is $15 (55AED), with fruits, dairy products, and beverages being the most popular items.

Profitability and Sourcing

The company generates profit on each item sold by directly sourcing inventory from brands or through established large-scale distributors.

Market Comparison and Growth Potential

“The development of the e-grocery sector in the UAE currently lags behind that of Russia, where express delivery services have already achieved substantial success,” Dovbenko observed. “Recent trends indicate that the dark store model is poised to supersede traditional convenience stores.”

Personalized User Experience

As YallaMarket gathers more data regarding user behavior, the company is investing in product development, specifically implementing a “behavior prediction system.” This system aims to personalize user experiences and offers based on individual preferences, thereby reducing order completion time.

The Rise of Quick Commerce

The instant delivery business model, also known as quick commerce, experienced exponential growth last year, driven by the increased adoption of online grocery shopping during the pandemic, as highlighted in a Coresight Research report.

The report anticipates “permanent gains” in this trend, with consumers continuing to favor online shopping even as the pandemic subsides.

Consumer Preferences and Future Trends

A recent PwC study emphasized that fast and reliable delivery, alongside product availability, are among the most crucial factors influencing online shopping decisions. The study projects continued growth in online shopping, fueled by remote work arrangements and the adoption of new shopping habits.

Grocery spending was identified as the category where consumers anticipate the largest increase in expenditure, followed closely by takeaway food purchases.