With the launch of the UAE, Careem owned by Uber has entered the booming “dark store” market

Car-hailing app Careem, a subsidiary of Uber Technologies, is joining the fast-growing “dark store” field by launching a new fast grocery delivery service, Careem Quik.

This service combines the warehouse infrastructure of dedicated stores with shortened delivery times, adding Careem to a pool of international start-ups whose investments are booming and aim to completely disrupt the traditional grocery shopping model.

Dark shops and dark kitchens are shops and kitchens that are closed to the public and store goods that are only used for online ordering.

“Our real competitor is offline supermarkets. This is where most customers spend their time,” Careem’s head of groceries Zeis Lario told CNBC before the announcement. “In the past 100 years, from the customer’s point of view, the grocery store is one of the few industries that has not undergone fundamental changes.”

“We generally think that this is not a good way to solve the problems faced by users,” Lario said. “This is what we really want to do here, to radically simplify the way people buy groceries.”

The company’s goal is to be able to provide fast delivery services to nearly half of Dubai and the entire city next year by the end of this year, and plans to open 100 stores in the UAE and Saudi Arabia in 2022. Careem also plans to automate the process over time through cooperation with Kiwibot, a US robotic sidewalk delivery startup.

Careem already provides grocery delivery services on its app through cooperation with local retailers. The delivery times of these retailers vary, but usually exceed one hour. With Quik, Careem controls the entire supply chain, which is said to allow better control of prices, speed, reliability and inventory. It said its goal is to shorten the delivery time of groceries to 15 minutes.

This news was released in the context of the tightening of the global supply chain, which has impacted almost all aspects of e-commerce. But Lario said that so far, Careem Quik’s surgery has not been affected.

“Part of the advantage of dark shops is that their requirements are relatively simple. Refrigerators, freezers and shelves, and some basic fixtures, which make them so efficient,” he said. “You said revenue per square foot is 10 times that of a traditional supermarket. Fortunately, everything we need is ready.”

Lario said that the dark shop model will reduce consumer price points to completely parity with supermarkets, which highlights the threat it poses to traditional retailers, who have often strained their financial models to keep up with demand.

“It takes longer to prepare, and it’s much more complicated,” Lario added. “You will see things like price increases. With Careem Quik, this model is very effective and we will be able to compete with some of the biggest supermarkets there.”

Although the investment figures for the new service have not yet been disclosed, Lario said that the expansion of the service is entirely funded by the company itself. He believes that the company will hire hundreds or even thousands of new drivers to meet demand.

According to Careem, the Middle East and North Africa grocery market is currently a $0.4-0.5 trillion industry, and it predicts that by 2025, the online grocery market will generate more than $11 billion in revenue.

Careem’s involvement in the “dark store” e-commerce of groceries will allow the Middle East to enter the already rapidly evolving shopping transition that has been accelerated during the pandemic lockdown. According to PitchBook Data, by April 2021, investors have invested more than $14 billion in global on-demand grocery delivery services. In the first four months of 2021, venture capital investment in fast-delivered applications has exceeded the overall investment in the industry in 2020.

Investors’ interest in delivery services is still growing. The Turkish start-up Getir has promised to deliver groceries in just 10 minutes and is currently valued at US$7.7 billion. Announced the acquisition of British competitor Weezy, Previously raised more than 25 million U.S. dollars from venture capital companies.

As of November, Getir has raised more than $1 billion from investors such as Silver Lake, Mubadala and Sequoia.Europe is also full of start-ups competing with physical supermarkets, such as German takeaway giant delivery hero, The company recently bought a minority stake in online grocery startup Gorillas.

U.S. Grocery Startups Gopuff acquires British companies Dija and Fancy Representing more transactions in a fierce market, and as many start-ups struggle to differentiate the products they can offer, they are now seeing more and more integrations.

The launch of Careem Quik is just right Report Uber is currently negotiating with Careem’s senior management to introduce external investors into the business and allow the leaders of the Middle East subsidiary to make greater decisions about its strategy. Careem did not comment on the report.

Careem is a super app, which means that its range of services-from calling a car to item delivery, bicycle rental, food and grocery delivery, money transfers, booking cleaners and even scheduling PCR tests-can all be in the same app Order on. The Dubai-based company was acquired by Uber for US$3.1 billion in 2019 and has operations in 13 countries and more than 100 cities in the Middle East, South Asia and Africa.