How Talabat Works? Business Model and Revenue Channels Explained

Talking about food delivery apps, then, one name is hitting the food delivery market in UAE that stands for Talabat. The Talabat app allows buyers to order food from their nearby or popular restaurants with just a few clicks. The plus point? The ordered meal can be delivered to their doorway, so no more waiting in line.

For consumers, it’s surely straightforward to understand the flow of the app. However, it’s crucial to understand how Talabat works for entrepreneurs. Because without gaining a basic understanding of such an on-demand business model, it’s complicated to take the first step in such a competitive market.

So in this article, we will check on the Talabat business model that simplifies the statement of how Talabat works. Along with that, we will as well watch over how Talabat makes money so that you can obtain a basic understanding of profit scenarios.

The Story of Talabat

When it comes to the food delivery business in UAE, Talabat has achieved wealthy popularity in the middle east. It all started back in the days of 2004 when a group of entrepreneurs daydreamed about making the food delivery easy for all, and they established Talabat in Kuwait.

Back then, there was no such 4G 5G internet, so the network connection was poor. And there were no such road maps available on the internet that assisted in taking the right turn to reach the destination.

However, Talabat has come over such situations, and at present, it operates its services in MENA regions. If we consider the restaurant listings, then Talabat proffers 5500 lunchrooms & diners to choose from.

There are millions of food outlets launched every year, but not everyone can make it to stay steady in the on-demand economy. But here, Talabat wins the race. There are many food business giants competing in the food market of UAE; however, Talabat makes it to stay at the top of the table.

The Establishment Year

• Year: 2004
• Founders: Abdulaziz Al Loghani & Khaled Alotaibi
• Headquarters: Kuwait
• Area Served: Kuwait, Saudi Arabia, Bahrain, United Arab Emirates, Oman, Qatar, Jordan, Iraq, and Egypt.
• Fund Raised: $1.57 billion

Key Facts of Company

• Talabat launched its mobile application for Android and iOS platforms in the year 2012.
• It was in the year 2015 when Talabat was obtained by the German e-commerce group named Rocket Internet for US$170 million.
• Afterward, in 2016, it was taken over by an online food marketplace – Delivery Hero. So now the Delivery Hero gets the position of the owner of Talabat.
• In march 4, 2019, the Zomato UAE branch was sold out to Talabat at $172 million, so users looking to order from Zomato will be redirected to Talabat.
• The biggest achievement was when Talabat was chosen as the official food provider for Expo 2020’s list by introducing some unique concepts such as cloud kitchen.
• Talabat holds the largest share at about 78% percent in the food delivery market of UAE and holds onto the largest order volume in the middle east’s food delivery digital platform.

How Talabat Works

Talabat works as a go-to platform for users to order their favorite food, while for restaurants and delivery persons, it creates an amazing opportunity to earn income.

Usually, Talabat operates under three streams where one is for users, one is for restaurant partners, and one is for riders who wish to drive for Talabat.

For users, the first ever step would be to register under the Talabat app or website; afterward, they can make an order by accessing the menus of restaurants. And at last, they can pay for the ordered food through multiple payment options.

Restaurants partners are as well provided with a specific panel where they are required to fulfill specific details to get verified their business profile. Later on, restaurant partners can set up their menus and receive orders from users. Next, the admin will approve the order and will assign it to a specific delivery person to fulfill the delivery.

From the Talabat Rider App, riders can register themselves as the delivery partner, and afterward, the profile of the delivery person will be verified by the Admin. After that, they will be assigned specific tasks to perform and can earn money.

Talabat Business Model

Key Resources

• Broad data list of restaurants
• Technical platforms
• Human resources for delivery persons

Key Activities

• Online order procedure
• Recruiting delivery persons
• Collecting databases of restaurants
• Logistics management to proceed with orders and transactions
• Management of web and apps

Consumer Segments

Users

• For the people who don’t like to cook
• People who love to eat restaurant foods
• Persons who want food to be delivered to their doorway
• People who look for multi-cuisine diners

Restaurant

• For businesses that don’t have an official platform to carry out online orders
• Restaurants that don’t have delivery guys

Value Proposition

Consumers

• Can order food online
• Can explore menus of multiple restaurants
• Can keep an eye on their order status
• Can pay securely online
• Can provide reviews and rating

Restaurants

• Can get a broad range of consumers
• Gets online platform to serve their customers
• Empowerment of small food businesses
• Allows to stand out in the crowd

Delivery Service Provider

• Earn extra money
• Flexible time slots
• Can receive tips from customers

Cost Structure

• Channel setup and maintenance cost
• Salaries of permanent employees
• Payments to delivery persons & fuel expenditure

Revenue Stream

• Per order commissions
• Delivery charges
• Advertisement

Platforms

• Website
• Mobile application for Android
• Mobile application for iOS

Customer Relationship

• 24*7 customer support
• Consumer support chat

Key Partners

• Restaurants
• Delivery persons

Talabat is working to provide food lovers with delicious and nutritious meals. They have eliminated the need for consumers to travel to restaurants by offering food delivery straight to their doorway. All you have to do is order online, and the platform will link you with your preferred restaurant.

Consumer Segment

How is it beneficial for users?

• It’s beneficial for those people who don’t want to cook or don’t have enough time to cook. They can easily order food from the Talabat app or website.
• All the foodies who love to try multi-cuisine meals can explore a wide variety of food items from the Talabat app.
• The best benefit of ordering food online is that users can have the choice to receive orders at their doorstep. So they can enjoy their favorite food at their favorite place.

How is it beneficial for restaurants?

• Short or medium-scale restaurants can increase their sales by being part of the large community.
• It is a cost-efficient method for handling deliveries, as it eliminates the need for multiple systems to run your business.
• It’s an ideal solution for those stores that are suffering from a shortage of staffing.
• Such kind of platform is truly beneficial for those businesses who don’t have their own official platforms like a web or app to receive online orders.

Consumer

• Users can easily order meals from the web or app platforms.
• All the foodies who love to explore multi-cuisine meals can access a wide spectrum of menus from their nearby restaurants.
• To know the order status, consumers can track their ordered food through the website or mobile app.
• Food delivery apps like Talabat contain safe payment gateways so users can pay securely for their orders.
• At last, consumers can submit reviews and feedback to particular diners regarding their services.

Restaurants

• For small or medium-scale food outlets or restaurants, Talabat stands for the beneficial platform to gain more clients.
• For traditional corporations who wish to be present online, they can get an e-delivery platform to sell their foodstuffs.
• By acquiring online possibilities, the empowerment of small and medium-scale businesses is possible.
• For businesses who wish to stand out in the crowd, they can get a platform to show their uniqueness.

Delivery Person

• By driving for Talabat, delivery persons get an opportunity to earn extra income apart from just 9 to 5 jobs.
• The majority of online food delivery businesses offer flexible time slots for delivery persons to work. Therefore, it becomes easy for those people who wish to earn money in their free time.
• Apart from earning side incomes, delivery persons can earn some extra cash from the tips given by users.

How Talabat Makes Money?

After determining the business model, let’s understand the revenue model of Talabat to understand how Talabat makes money.

Usually, online food delivery platforms earn profit from three revenue tactics that are commission-based strategy, profit from delivery charges, and advertising strategy; let’s have a look.

Commission-based

Normally, Talabat applies a minimal fee amount ratio of about 15% to 25% to the restaurants on the order bill. The common percentages of charges rely on several factors, by counting on the order frequency of restaurants, location, penetration into new villages, competitiveness in the market, and others.

So by charging commissions to restaurant partners, Talabat gains a preferable portion of revenue.

Revenue from Delivery Charges

Talabat has no such statement for minimum order delivery prerequisite, meaning that orders beneath all caps can be gained readily. This results in an augmented price of logistics per order.

However, during the pick seasons, like holidays or on certain occasions, delivery charges can be higher because of the inflated need of buyers. Thus, delivery charges on orders are a significant source of profit for the business.

Advertising

Usually, advertisement strategy profers two approaches – banner ads and secondly priority listings.

Banner ads refer to display ads of the restaurants on the banner who want to receive more reach.

Priority listing refers to settings up a restaurant list of priorities. This type of listing has a higher chance of accumulating a wider reach of users.

New or small startups who wish to gain a more consumer base can get benefits from the restaurant affiliate marketing strategy. Talabat charges specific payments to restaurants that wish to be in the ad list on the web and application.

Typically the higher will be the priority listing; the higher prices will be charged to restaurants. So this way, Talabat consists of a much higher revenue stream to gain profit. Moral, for online food delivery businesses, advertising is a great strategy to acquire stable income flow.

Feature List of Talabat App

User App

• Consumers can download the application from Google Play or Apple App Store.
• After app installation, users can log in or register to get access to their accounts.
• Consumers can access filters and sort the menu to explore their favorite food or restaurants.
• Foodies can customize their orders by adding ingredients as per their likes.
• The app enables secure payment gateways to pay online from multiple options.
• After payment, users will gain access to track their orders with estimated arrival times.
• There is an amazing segment available in the app where users can choose to schedule their order for later.
• Consumers can also mark a restaurant under their favorite category for quick access.
• The app consists of notification features, where users will be notified of newly launched menus, discount offers, and much more benefits.

Delivery Person’s App

• The app streamlines a quick entrance with easy login and registration options.
• Under the app, drivers can easily set up their profiles by uploading specific documents.
• The app allows easy access for drivers to manage their delivery requests.
• The app includes an in-built map navigation system that drivers can use to reach out to consumers and fulfill the delivery.
• Drivers can update their profile status regarding their availability, which allows the admin to check if they are available to fulfill delivery requests or not.
• The app also includes a history feature, where delivery providers can keep an eye on their earned income.
• Through the feedback feature, delivery persons can receive feedback from users about their services.

Restaurant Panel

• There is an interactive dashboard for restaurant partners with several functionalities to manage the business easily.
• Restaurant partners can easily accept or decline orders as per the circumstances.
• Restaurants can manage their business profile by adding specific details like profile logo, business hours, menus, discounts, etc.
• Partners can also check their earning reports to get a clear view of profit.

Cost Structure of Building an App Like Talabat

It’s not possible to estimate the amount of cost to create an app like Talabat. Only because the cost of building a food delivery app like Talabat relies on variable aspects, for instance,

• What will be the size of the app?
• Which platform do you wish to target? Native or cross-platform?
• What sort of features would you like to incorporate into the app?
• How will be the graphical user interface generated?
• What will you prefer, an in-house team or offshore development?

At last, post-launch support and maintenance criteria are even there to influence the cost structure.

However, we can conclude an estimated cost to build an app that ranges from $15,000 to $45000 and can be more, which usually depends on the complexity of the app and the cutting-edge functionalities you chose for.

Conclusion

So that’s it for the day; hope now you have got an idea of how Talabat works actually. After viewing the journey of Talabat, it’s fair to say that it has come up a long way to evolve into a major player in the meal delivery market in the Mid-east.

As the global meal delivery sector continues to grow rapidly, there are ample opportunities for food delivery businesses to generate significant revenue by inverting to the digital platform.

So as an entrepreneur, if you wish to grow your food delivery business, then the best approach is to get a Talabat like app platform. With mobile app medium, enterprises can target a wide spectrum of users and, in return, allows them to earn maximum profit.