DUBAI, United Arab Emirates - Ride-hailing app Careem, a subsidiary of Uber Technologies, is joining the fast-growing "dark stores" space with the launch of its new rapid grocery delivery service, Careem Quik.
The service, which combines the warehouse infrastructure of purpose-built stores with shortened delivery times, adds Careem to an international pool of start-ups that have seen booming investment in a model that aims to completely upend traditional grocery store shopping.
Dark stores, alongside dark kitchens, are stores and kitchens that are closed to the public, housing goods meant solely for online ordering.
"Our true competitor is the offline supermarket. That's where the majority of customers are spending their time," Chase Lario, Careem's head of grocery, told CNBC ahead of the launch announcement. "Grocery is one of the few industries that's not radically changed from a customer perspective in the last hundred years."
"We generally don't think it's a great solution to the problem that users face," Lario said. "That's really what we're trying to do here, is radically simplify the way people are shopping for their groceries."
The company aims to be able to provide its rapid delivery service to nearly half of Dubai by the end of this year, and the entire city next year, with 100 stores planned across both the UAE and Saudi Arabia in 2022. Careem also has plans to automate the process over time through its partnership with U.S.-based robotic sidewalk delivery start-up Kiwibot.
Careem already provides grocery delivery on its app through partnerships with local retailers, whose delivery times vary but often exceed an hour. With Quik, Careem controls the entire supply chain, which it says will allow for more control over prices, speed, reliability and inventory. It says it's aiming for grocery delivery times to be as little as 15 minutes.
The news comes against the backdrop of a global supply chain crunch that's hit nearly every aspect of e-commerce. But Lario says Careem Quik's operation has so far been unaffected.
"Part of the beauty of the dark stores is they're relatively simple in their requirements. Fridges, freezers and shelves and some basic fixtures, which is what allows them to be so efficient," he said. ''You're talking about 10 times the amount of revenue per square foot than a traditional supermarket. And fortunately, everything we've needed has been readily available."
The dark store model will bring the consumer price point down to full parity with supermarkets, Lario said, highlighting the threat it poses to conventional retailers who often have already strained financial models and struggle to deliver at pace with demand.
"That takes a lot longer to develop and it's far more complex," Lario added. "You see things like price inflation creep in. With Careem Quik, the model is really efficient and we'll be able to compete with some of the biggest supermarkets out there."
While the investment figure for the new service has not been disclosed, Lario said the build-out of the service is fully funded by the company itself. He sees the company hiring new drivers by the hundreds and potentially the thousands to meet demand.
The Middle East and North Africa grocery market is a $0.4-0.5 trillion industry today, according to Careem, and it forecasts the online grocery market will generate upward of $11 billion by 2025.
Careem's foray into "dark store" e-commerce for groceries will bring the Middle East into the already burgeoning shift in shopping that was turbo-charged during pandemic lockdowns. By April 2021, investors had already poured more than $14 billion into on-demand grocery delivery services globally, according to PitchBook Data. Within the first four months of 2021, venture capital investment in rapid delivery apps had already exceeded the entire investment volume into the sector for 2020. And that investor appetite for delivery services is still growing. Turkish start-up Getir, which promises grocery deliveries in as little as 10 minutes, is currently valued at $7.7 billion following its announcement to acquire British rival Weezy, which had previously raised more than $25 million from venture capital firms.
Getir has raised more than $1 billion as of November from investors including Silver Lake, Mubadala and Sequoia. Europe is also buzzing with start-ups competing with brick-and-mortar supermarkets like German food delivery giant Delivery Hero, which recently purchased a minority stake in online grocery start-up Gorillas.
American grocery start-up Gopuff's acquisitions of British firms Dija and Fancy represent yet more deals in the heated market, which is now seeing increasing consolidation as the numerous start-ups struggle to differentiate what they can offer.
The launch of Careem Quik comes amid reports that Uber is currently in talks with Careem's senior management to bring outside investors into the business, and allow greater decision-making by the Middle East subsidiary's leaders over its strategy. Careem has not commented on the reporting.
Careem is a super-app, meaning its range of services - from ride hailing to item delivery, bike rental, food and grocery delivery, transferring money, booking a cleaner or even scheduling a PCR test - can all be ordered on the same app. The Dubai-based company was acquired by Uber for $3.1 billion in 2019, and operates in 13 countries and over 100 cities across the Middle East, South Asia and Africa.
Source: https://www.cnbc.com/2021/12/09/uber-owned-careem-gets-in-on-the-surging-dark-store-market-with-uae­launch-.html 

 

Question 1

BlackBerry, a line of smartphones and tablets, was a smashing success in 1998. They changed the game in the mobile industry by offering a device with an arched keyboard. Their encryption even into the early 2000s was second-to-none but they were not thinking of user experience. Just a few years later the entire Mobile industry started focusing on bigger touchscreen displays, while BlackBerry was more concerned about protecting what it already had. Failing to adapt to changes, in 2017 the CEO John Chen announced that BlackBerry was out of the smartphone manufacturing business and that the company has built a new strategy (www.valuer.com).
From the excerpt, above, clearly Blackberry mobile phones had several shortcomings. Evaluate these shortcomings and provide senior management with a guide to re-position the Blackberry brand as a "Luxury Brand".    (20)

 

Question 2

The digital revolution not only changed the way electronic gadgets work, they changed the way they are manufactured. In 2012 Hitachi announced that they will stop manufacturing TVs, and that the factory will instead start producing projectors and chips.
Discuss the various reasons for product failure as well as the additional drawbacks that a new product like Hitachi TVs can face. Your response should be in a paragraph format.  (20)