UK company enters Dubai’s crowded rapid-delivery market

• Zapp bets on sector growth
• Company delivers groceries
• Market driven by young population

Despite the congestion – in the market and on the streets of the UAE’s most populous city – yet another competitor, UK company Zapp, is entering Dubai’s rapid-delivery market.

This is evidence there is still room for growth, analysts say.

Zapp focuses on rapid grocery deliveries from its own so-called dark stores. A dark store is a retail outlet or distribution centre that exists exclusively for online shopping.

Having outlasted competitors in the UK market such as Turkish company Getir and Germany’s Gorillas, Zapp is now seeking out new markets.

Despite the challenges, Zapp’s business model, which focuses on driving higher-value orders with its premium grocery offering, may yet stand a chance in Dubai, Andrey Dyatlov, CEO of Rapid Delivery Analytics in Paris, told AGBI.

“Zapp thrives in highly competitive markets, while some other competing platforms had to shut down,” Dyatlov said.

The rapid-delivery market in the UAE – home to more than 11 million people – is valued at approximately $170 million, and projected to grow to $260 million within the next five years, according to LOGIC Consulting.

Zapp is “considering launching in the region as early as this year” and has started hiring staff and holding partnership meetings with competitors in Dubai, Bloomberg reported.

The Gulf delivery market, and particularly in Dubai and the wider UAE, is already congested, with companies like Talabat Market, Noon and Careem Groceries.

Zapp’s average order value (AOV), a key metric for assessing how much consumers are spending per delivery, is more than double the average, according to Rapid Delivery Analytics.

“Our data depicts a higher share of frequent and high-AOV users in Dubai vs London,” said Dyatlov.

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Partnerships with competitors to widen coverage and leverage their logistics are becoming increasingly common in the rapid delivery market. This is something in which Zapp is well versed from its work in London, where less than half of its deliveries are via its own app, said Dyatlov.

The UAE’s rapid-delivery market still has room to grow, said Seif Rabie, managing partner UAE at LOGIC Consulting.

“Pharmaceuticals, particularly over-the-counter medications and wellness products, are another key growth area,” he said.

The Gulf’s demographics also play a role: with more than half of consumers under the age of 35, speed is becoming a priority over discounts, according to Rabie.

“Despite the intense competition, there is still room for new entrants who can differentiate themselves through innovation and superior service quality,” Rabie said.