Virtual or cloud restaurants have started to expand and grow rapidly in the Egyptian market, especially in the period of the spread of the Covid-19 virus, and many of them have turned to online shopping, which has supported new sectors in the Egyptian market.
A report by the Cabinet Decision and Information Support Center notes that cloud restaurants are the latest addition to Egypt’s food and beverage sector, however, the growth rate has been quite weak, exacerbated by a lack of awareness and a low prevalence of ordering food online. It is worth noting that the first cloud restaurant was launched in 2020, which includes 35 different brands led by Food Nation, and also plans to create the largest cloud kitchen in the country, with more than 41 kitchens.
According to Ahmed Al-Najjar, project manager of one of the virtual restaurants, which aims at this step to raise awareness as well as encourage more restaurants to switch to this ever-increasing model. In an effort to help its virtual restaurants increase the visibility of its brand, the company is offering catering services at one of its locations. The project manager also explains that having dining areas associated with cloud kitchens will play a role in building customer trust in these virtual brands. This will eventually lead to the adoption of cloud kitchens.
Also, cloud or virtual restaurants, which offer food services only through delivery, act as virtual systems in the field of home delivery of food orders, whose work in most cases depends on applications and digital platforms. Where the restaurant promotes its services through applications or its website, to make it easier for the customer to place an order in it, or the restaurant and its products may be displayed in food delivery applications by third parties.
Overall, growing interest from entrepreneurs has begun to invest in virtual restaurants to find a solution that can help restaurants recover from the effects of the pandemic in the country. This is why most cloud restaurant operators in Egypt have adopted the “Kitchen as a Service” (KaaS) model, offering kitchen space for brands and restaurants for rent.
Mostafa Wahdan, one of the co-founders of Sahabi Restaurant, says the main reason he started his business was to help restaurants survive by enabling them to increase their delivery footprint and expand into new areas.
Although cloud computing restaurants have proven to be a cost effective solution for many restaurant brands looking to expand geographically without having to deploy physical location, the delivery-only model also has its own set of challenges. Given that restaurant operators have to spend large sums on their marketing strategies to gain customers. As a result, many small restaurants can not move or rely on cloud restaurants just because of their inability to cover marketing costs.
Also, the online food delivery sector in Egypt is still in a growth phase and is unlikely to make major strides, at least in the short term. And that online sales in Egypt account for about 6% of total food and beverage sales, which is why cloud restaurants are still considered a market in its early stages.
“Ultimately, as reliance on cloud restaurants is becoming more common, more customers and businesses will be turning more and more to ordering food online, especially in light of the fact that most startups.” kitchens as a service “are offering customers of their restaurants the opportunity to cooperate with collectors of deliveries Food, demand.
Michael Asaad, another founder of one of the virtual restaurants in Egypt, explained that the reason cloud restaurants lag behind other sectors is the substandard logistics of food delivery. He added that the real change for this sector will be the logistics of fast and efficient delivery. As delivery and packaging remain a barrier for delivery-focused companies, customer expectations are becoming higher and traditional models of current on-demand delivery models become insufficient and inadequate to meet growing demand. He emphasizes the importance of creating new models for faster and more efficient distribution of food.
In conclusion, looking to the future, the cloud restaurant market will produce more players as demand increases, in addition to increasing the likelihood of the emergence of more virtual restaurants that may fail to start operating if they do not constantly invest in finding innovative ways to achieve sustainable customer satisfaction, and therefore Focus on the customer first to ensure sustainable growth in this market in the future.
It is also expected that over the next five years, the cloud restaurant sector will be on the throne of the luckiest investments in a world shrouded in uncertainty and instability; This is due to the nature of investing in the cloud based on the reduction of high costs incurred by the traditional restaurant, thus becoming the most profitable and safest market of cloud restaurants.