Then, Now, and Next of talabat – Tomaso Rodriguez, CEO
talabat is celebrating its tenth anniversary in Bahrain this year. Gulf Insider interviews Tomaso Rodriguez, Chief Executive Officer of talabat to unlock the story of a successful decade and beyond.
Tell us about your venture into Quick-Commerce (Q-commerce).
People nowadays demand speed and convenience. Q-commerce is an evolution of the eCommerce business and our venture started in early 2020 with the concept called talabat Mart. We wanted to get anything delivered in 20 minutes, around the clock.
Although most companies struggled during the pandemic, some companies were able to grow – such as talabat. What was the hardest challenge you had to face during this period?
In hindsight, it was a blessing-in-disguise, but initially it was extremely tough.
When the lockdown first started, nobody knew much about the virus and there were a lot of rumors spreading on the internet. People were panicking and concerned about their safety. They didn’t know who prepared, packed, and delivered their food. In the first three to four weeks of lockdown, our orders were almost nonexistent. We thought it was the end for talabat.
We then worked hard on implementing safety practices and solutions, like ensuring that social distancing is being observed, and contactless delivery. We were the first in the region to introduce gloves, masks, and sanitizers for our riders. This gradually built up the trust from customers and orders started to ramp up again.
Many restaurants were struggling to run operations during the lockdown. To help them, we shifted to tri-weekly payments and gave them loans to survive throughout the pandemic. This served as a lifeline to continue and later on see a boom in their food delivery. These restaurants now have much more business compared to the pre-pandemic period. Therefore, overall, it was indeed a blessing-in-disguise.
There are a lot of grumblings about talabat taking large commissions for its service. How do you ensure that the percentage taken is fair to smaller businesses?
Our commission revenues are allocated in three ways: delivery, marketing, and operations.
There are two sources of revenue for talabat – the delivery fee charged to customers and the commission charged to the restaurants. Cutting these revenues will not just impact us, but our ecosystem, including restaurants and our riders.
We make very little on each transaction, but we do a lot of transactions – it’s a matter of volume, not margin.
In 2015, talabat was acquired by Delivery Hero, the global leader in online food ordering and delivery. Do you think this contributed to your massive success?
Definitely! Delivery Hero operates globally on a large scale with several similar brands based in Europe, Asia, and Latin America, which we learned a lot from.
The most strategic move that happened after the acquisition was shifting from a marketplace to all-delivery business. Initially, talabat was only connecting restaurants and customers – restaurants had to deliver the food themselves. Back then, the delivery time was unpredictable and customers could not track their riders. Now, we have the talabat fleet to manage this, which was a game-changer for us.
How is talabat helping restauranteurs attain sustained growth in their business?
First, as a restaurant is listed on talabat, it automatically gains access to thousands of customers which they would normally require a great amount of marketing to gain access to. We spend a lot on our marketing to boost demand and bring in more customers, increasing their market exposure.
Second, we have tools for restaurants to increase their visibility on the app, which is helpful for new restaurants to be discovered and well-known restaurants to increase customer retention. Our account managers work closely with the restaurants. They are constantly monitored and we ensure they get very good ROI.
You have recently introduced female drivers to your team. How is this working out and have you faced any problems?
It’s too early to say now, but so far, it’s going very well and we look forward to expanding this throughout the region. The customers are really pleased to see women riders. We believe that this could potentially be a big source of income for women in the future. We’re very bullish on this program.
Are there any plans to expand talabat outside of the MENA region?
We believe that talabat is a local player. Our products are catered to the people in the MENA region.
We have recently opened in Iraq, Jordan, and Oman, so this will keep us busy for the next couple of years. Egypt is an underpenetrated market, so we still have a lot of work to do in terms of expansion in this region.
talabat is constantly coming out with new initiatives, what have been the most successful and what in hindsight didn’t work out?
One of the initiatives that we’re most proud of in the recent years is talabat Mart. Considering that the food delivery business has been around for 18 years and talabat Mart for just 2 years, we’re extremely happy to see its rapid growth across the region.
We experiment a lot with our initiatives, and some don’t go well such as the ‘Smart Lunch’ (renamed talabat Lunch) which we launched in Dubai as a test. The idea was for office workers to subscribe and have lunch delivered to the workplace every day at the same time. This was launched just before COVID and lockdown. It wasn’t an appealing value for business then, therefore, we discontinued it. We may reconsider it in the future.
It’s hard to predict the future, but how do you envisage delivery services in the coming years?
We are working on some innovations like our pickup and subscription programs. Around 70% of our customers use debit cards which means that the majority don’t have access to credit. We are exploring buy-now-pay-later schemes in partnership with banks around the region.
We are also experimenting more on the hardware front. We have built a two-storey kitchen at the Dubai Expo with around 30 partners. We have fully automated robot baristas and delivery robots in place. We are also working to experiment with drones. All of these were exhibited at the Dubai Expo, but we will see them in the real world soon.
For more information on talabat, visit their website or follow them on social media @talabatbh.
