Dubai online retailer Noon to launch a ‘fair’ food delivery platform

Alabbar says the F&B sector has been held ransom by food aggregator platforms

Dubai businessman Mohamed Alabbar has hit out at food aggregators for charging “exorbitant” fees while announcing that his online retail platform, noon.com, will launch its own “fair” food delivery platform.

At a webinar attended by F&B outlet owners, the noon.com founder lamented the high fees charged by aggregators, that can go as high as 35 per cent of the cost.

“Can we, as businessmen, survive with this? No. We have been held ransom by food aggregator platforms. And that’s not acceptable,” Alabbar said.

“Our F&B industry is a part of the beating heart of this economy, and it has been severely impacted. We must do all we can to support and protect it. This is out of love for our businesses, families, nation and economy. We must think beyond profit,” he added.

Noon Food will be built into the noon.com app. It promises fair commissions to restaurants who sign up, in addition to various unnamed incentives. Businesses that join can tap into noon’s large customer database while utilising its payment gateway. They can also choose to use noon’s delivery network. The service will be rolling out across the region in the coming months.

A cold war has been brewing for months between local restaurant owners and F&B aggregators.

At the heart of the dispute is the apparent reluctance by the delivery companies to reduce their fees while Covid-19 ravaged the sector. Additionally, restaurant owners are compelled by the aggregators to run aggressive discounts, eating further into their margins.

Most restaurants were forced to turn to online delivery platforms when countries went into lockdown. Although economies are opening up, restaurants can only operate at limited capacity due to social distancing restrictions.

Local restaurants have banded together to launch their delivery service, GoFood, in an attempt to circumvent the aggregators. GoFood says it will charge 2 per cent on orders, a fraction of what the established players charge. The service will also offer a delivery option for restaurants without their drivers to be charged at Dhs10 for the first 10 kilometres and Dhs0.50 per kilometre thereafter.

Read: Dubai’s GoFood app launches grocery delivery service

The local online delivery market is dominated by Careem Now, Zomato and Talabat. Both Zomato and Talabat are owned by German firm Delivery Hero. Another player, Uber Eats, exited the UAE, Egypt and Saudi Arabian markets earlier this year, with its operations handed over to its Middle East subsidiary Careem.

By launching a food delivery option on noon.com, Alabbar is following on the footsteps on Careem which has created a “super app”, bringing ride-sharing, food delivery, bike-sharing, online grocery shopping, and courier service all under one umbrella.

Gulf Business. July 27, 2020