From shop to your shelf, El Grocer grows
Delivery services are a part of Dubai’s residential lifestyle, and some residents are even spoilt for choice with stores at the bottom of their building or a few blocks away. In either case, after one phone call you can get anything from a chocolate bar to a full meal delivered to your door.
Such service is a welcome respite from the unforgiving desert heat or the occasional bout of laziness.
So, in the spirit of a true Dubai venture, El Grocer is looking to make the delivery of groceries even easier. The on-demand grocery delivery app currently serves 11,000 users from an inventory of nearly 50 grocery stores around Dubai.
Through the iOS app, the user can browse stores, then select products, then receive an alert once the order has gone through. They are then alerted once it has left the store. Apparently, all orders will arrive within 60 minutes.
Founder and country manager Mickael Costache told Wamda that in working with brands they are able to offer special product promos and optimize customer behavior through data analytics.
Turning to the Instacart model in the US where “they are trying to build a habit” of grocery delivery, Costache got together with Raed Hafez of Nuummite Ventures to begin building the app. Hafez noted that because the incubator’s “partners / advisors all hail from mobile, technology and FMCG industries (fast moving consumer goods), getting involved with El Grocer was a no-brainer”.
Though a straightforward service, grocery delivery has a “lot of pain points we can solve with technology”, Costache said. The store could get the order wrong, mess up the substitutes all while the customer has no idea of the items available in the store, as well as its actual pricing.
While onboarding store owners was a challenge, their three-point pitch worked.
“We said, your current customers who are calling you might want a better solution, there are a huge pool of customers that don't know you, and instead of opening branches in other parts of town, we’ll open those markets for you,” Costache explained.
Saeed, manager at Business Bay grocery store Better Mart 1, partnered with El Grocer earlier this year and was surprised to find the locations he could reach.
Every store manager receives a smartphone device to track customer orders and can access purchase habit data to improve their business. Geo-location and tracking is also in development. Membership and delivery service is free for the user.
Lana Darwan, a resident of Jumeirah Lake Towers, is the ideal El Grocer user. She was first attracted to the app because the “summer was just starting and [she] didn’t want to have to walk to the store in the heat.”
With plans to expand in UAE, Saudi Arabia, Kuwait and Qatar, starting out in Dubai was obvious to Costache - with every store already having a delivery force, they did not have to concern themselves with the logistics. Also, their investors were there and he saw the market as big enough.
Over a year in, El Grocer is building their revenue streams by charging the stores 2 percent commission, and looking at value added services like urgent delivery. They are also working with research firms like Nielsen to build on the brand experience.
“Brands are the bigger picture for us,” Costache told Wamda. “The way we designed the app was to put the accent on the brand from the beginning and have a huge volume [of stores] to become interesting to brands.”
Home and laundry care brand Henkel just signed on to “capitalize on the digital platform” and work out promos for their flagship brands like Persil, Prill and Dac, said Jad Salman, Henkel’s trade marketing category manager for the GCC.
“[Our] grocery channel is not as developed as we wanted to be,” Salman said. “We wanted to tap into the convenience of shopping from an application, and the model of el Grocer is very close to the consumer’s heart, [which] is feasible and convenient”.
In July the startup won the Gold Award at the Publicis90, receiving 100,000 euros in prize money and a year-long of mentorship. The app is about to close its Series A funding.