Jahez Bahrain

On 14 December 2021, Jahez established a legal entity in the Kingdom of Bahrain as a one-person limited liability company named Jahez International Company W.L.L. with a capital of 50,000 Bahraini dinars. Jahez engaged in retail sales via the internet. Commercial operations in Bahrain began on 26 June 2022, penetrating the market with a distinctive delivery experience.

In 2023, Jahez took several measures to expand its presence in the Bahrain market. Here are some details:

  • Geographical expansion: From day one, Jahez Bahrain has been serving all regions of the Kingdom, including the Capital Governorate, Muharraq, North, and South. The percentage of orders delivered in each region were as follows:
  • Operational optimization: This was a key priority for Jahez in 2023 in order to meet the increased demand for our services. Jahez took measures such as continuous monitoring and analysis of the number of orders to identify growth patterns and make necessary adjustments to optimize operations.

One significant measure taken during the reporting period was the increase in the number of drivers. By end 2023, Jahez had onboarded more than 4,400 drivers. We continued to expand our base of drivers every month, which has allowed Jahez to ensure timely deliveries and meet customer expectations. With our operational optimization, Jahez Bahrain was able to handle rising customer orders effectively and maintain high-quality services.

  • Growth in customers: In 2023, Jahez Bahrain saw a significant growth in the customer base, at a remarkable 156% . The growing number of orders month-on-month indicates our expanding brand awareness and Jahez’s popularity among customers in Bahrain.
  • Growth in merchants: Jahez Bahrain managed to double the number of merchants in 2023. This rapid increase in the number of merchants indicates growing confidence in partnering with Jahez in the Bahrain market.

These measures, including geographical expansion, operational optimization, and growth in customers, merchants, and delivery partners, allowed Jahez to strengthen its presence in the Bahrain market in 2023.

2024 breakeven

During the reporting period, Jahez Bahrain recorded increasingly strong financial performance and implemented various strategies to enhance profitability. Here is an overview of the financial aspects that are anticipated to help the company reach breakeven in 2024:

  • Increase fixed commission: Jahez increased the commission charged to its new partners, resulting in increased revenue for the Company.
  • Marketing tools: Initially Jahez Bahrain offered all partners free in-app marketing tools to gain their trust and confidence. Since the last quarter of 2023, we started charging merchants for in-app tools and other marketing support. This will contribute significantly to the bottom line.
  • Prime subscription: Prime was launched in Bahrain on November 07, 2023, which allows customers to subscribe to a free delivery service for a minimal monthly fee while the merchants contribute to a portion of the delivery cost. Consequently, Jahez Bahrain was able to offset some of the expenses associated with delivery costs.
  • Decreased cost of sales: Jahez successfully negotiated with delivery partners to decrease the minimum cost of delivery charges given the increased scale of the operations.
  • Increase of delivery revenue: Delivery charges per order will increase.

With such measures taken to decrease operational costs, increase commission revenue, delivery revenue and marketing revenue, and optimize the cost of sales, Jahez Bahrain has positioned itself to reach breakeven in the second half of 2024.

Bahrain market overview

The Bahraini customer foodservice market is expected to experience significant growth. The market size is estimated to be around USD 0.95 billion. in 2024 and is projected to reach USD 1.64 billion. by 2029.

Jahez Bahrain has cemented itself as a major player in the online food delivery sector in the Kingdom, and is currently the second largest food aggregator in the market. In Bahrain's highly competitive food delivery market, Jahez is facing tough competition from two major players. Despite this, Jahez Bahrain has been able to establish a distinctive position in a crowded market due to its focus on strategic growth and partnerships with local restaurants. With its customer-oriented approach and innovative features, Jahez continues to grow and compete in the Bahraini market.

Marketing entry and operating environment

The Kingdom of Bahrain offers a dynamic business environment with numerous opportunities for growth and investment, since there was only one serious player in the Bahrain market.

One of the key factors driving our decision to expand to Bahrain was the supportive legal and regulatory frameworks for foreign investors in Bahrain. The government has implemented several initiatives and policies aimed at attracting foreign investment and fostering business growth. Numerous local initiatives by different government bodies also exist to subsidize costs on operating companies, such as the employment support program by the Ministry of Labour and TAMKEEN. Jahez Bahrain has been able to save up to BD150,000 by participating in such programs.

Bahrain maintains transparent and investor-friendly regulations, providing clarity and stability for businesses operating in the country. The legal system upholds rights and ensures fair dispute resolution mechanisms. The Kingdom also consistently ranks high in global indices for ease of doing business. The government has streamlined administrative procedures and implemented digital solutions to simplify processes for businesses.

Challenges

Entering a new market like Bahrain in 2022 brought both opportunities and challenges for Jahez. The operating environment during that year posed several obstacles for the company.

  • Gaining merchants trust: One of the challenges for Jahez was to gain the trust of merchants who had experienced shutdowns of other delivery apps in the past. The previous closures had created uncertainty and apprehension among merchants, making it crucial for Jahez to build trust and establish itself as a reliable and long-term player in the market.
  • Changing customer behavior: Another challenge for Jahez was the high loyalty from customers towards competing apps due to an absence of credible competitors in the market for a long time. Customers were used to one platform for over a decade and Jahez needed to convince them to make the switch. This required effective marketing strategies that would highlight the unique features and benefits Jahez offered compared to our competitors.
  • Establishing a driver network: As the Company aimed to scale its operations, acquiring sufficient drivers always proves a challenge. Given that many drivers were already associated with other aggregators, convincing them to work for Jahez required competitive incentives offered to drivers and proving the stability and growth potential of the platform.

Despite these challenges, Jahez was able to navigate the market successfully. Demonstrating a thorough understanding of the Bahraini market and by building trust among customers, partners, and suppliers, Jahez managed to position itself well in Bahrain's food delivery sector. The gained trust and positive reputation played a significant role in establishing Jahez as a reliable and preferred option for a lot of customers and merchants in the new market.

Jahez future in Bahrain

Jahez has an optimistic outlook for the future in Bahrain. The Company plans to expand its services beyond food delivery and venture into other ventures such as supermarkets, pharmacies, shops, and flowers. Additionally, Jahez will be launching sister companies under the Jahez group, including Co, the PIK and Blu platforms, Marn and Logi, to bridge market gaps in Bahrain. These strategic investments and promotions demonstrate Jahez's commitment to diversifying and expanding its offerings, ensuring continued growth and success in the Bahraini market.

Jahez Kuwait

Started in Q2-2023 , Jahez’s commercial expansion in Kuwait was comprehensive, covering residential areas from inception and later extending to northern areas, achieving nearly 90% coverage of the population.

  • Operational optimization: From the start, Jahez placed a strong emphasis on streamlining its operations. This involved fine-tuning processes, enhancing efficiency, and minimizing bottlenecks. The goal was to create a seamless experience for all stakeholders involved in the food delivery ecosystem.
  • 24/7 service introduction: Recognizing the importance of round-the-clock availability, Jahez introduced a 24/7 service model. This move catered to the diverse needs of customers, ensuring that they could place orders at any time, day or night. The convenience of non-stop service became a key selling point for Jahez.
  • Competitive rates and order promise incentives for 3PL partners: To maintain a robust fleet of delivery drivers, Jahez offered competitive compensation packages to its third-party logistics (3PL) partners. These incentives included attractive rates and a commitment to fulfilling orders promptly. By prioritizing driver satisfaction, Jahez aimed to ensure a reliable and efficient delivery network.
  • Aggressive commission rates for vendors: Jahez adopted an aggressive approach when it came to vendor partnerships. By offering favorable commission rates, Jahez enticed restaurants and food establishments to join its platform. The allure of increased visibility and access to a broader customer base encouraged rapid vendor onboarding.
  • Leveraging marketing features and successful cashback campaigns: Jahez harnessed its marketing capabilities to attract new users. Through targeted campaigns, it highlighted the benefits of using the platform—convenience, variety, and quick service. Notably, successful cashback initiatives incentivized users to make repeat orders and refer others.

Both digital and offline channels played a role in Jahez’s marketing strategy. Online advertisements, social media promotions, and app-based notifications reached tech-savvy users. Simultaneously, partnerships with local businesses, flyers and community events extended Jahez’s reach to a wider audience.

In summary, Jahez’s strategic decisions, operational focus, and marketing efforts converged to create a thriving food delivery ecosystem that catered to users, vendors, and delivery partners alike.

Path to profitability

With commission rates for the second year taking effect from Q1 2024 onwards, Jahez anticipates a direct increase in commission revenue. Our strategy to achieve breakeven involves a reduction in delivery cost to align with the market average rates alongside enhancements to dynamic delivery fees. This plan requires meticulous monitoring of order growth per area to capitalize on opportunities, while also ensuring competitive rates compared to competitors, thereby benefiting all stakeholders.

1. Increase of commission rates for the second year:

  • Starting Q1 2024, the new commission rates of the second-year contract with merchants have been implemented. These rates directly impact the revenue generated from each order placed through the platform.
  • The change in commission rates signifies the optimization of the commission per order and the overall unit economics.
  • As more orders flow through the platform, the cumulative effect of these rates will contribute to overall revenue growth.

2. Breakeven strategy:

  • Increase in per order commission:
    • While striving for profitability, Jahez remains committed to offering competitive commission rates even after the increase. By doing so, it aims to strike a balance between profitability and competitiveness.
    • Ensuring that its rates are attractive compared to other food delivery platforms is essential. This approach benefits not only Jahez but also its restaurant partners and customers.
  • Increase the non-commission revenues: Jahez started charging marketing fees to merchants and will continue to explore creative advertising solutions, optimize user engagement, and strengthen partnerships to drive further revenue growth. Through partnerships with restaurants and other businesses, Jahez displays targeted ads within its app. These ads reach a captive audience of users actively browsing for food options.
  • Enhancements to dynamic delivery fees:
    • Jahez recognizes that delivery fees play a crucial role in its revenue model. By enhancing the dynamic delivery fees, Jahez can optimize its earnings.
    • Dynamic fees may vary based on factors such as distance, time of day, and demand. Adjusting these fees intelligently can lead to better financial outcomes.
  • Meticulous monitoring of order growth:
    • Jahez’s success hinges on its ability to capitalize on opportunities. This involves closely tracking order growth trends in specific areas.
    • By identifying high-demand zones, Jahez can allocate resources effectively, optimize delivery routes, and maximize revenue.

3. Stakeholder benefits:

  • Jahez’s comprehensive strategy aims to benefit all stakeholders:
    • Customers: Competitive rates may lead to better deals for customers, encouraging loyalty and repeat orders.
    • Restaurants: Lower per-order commissions compared to the competition can attract more restaurants to join Jahez, expanding its offerings.
    • Delivery partners: Efficient dynamic fees ensure fair compensation for delivery services.
    • Investors: Achieving breakeven and revenue growth enhances investor confidence.

The Company identified opportunities and initiated discussions with sister companies within the Group, including Co and Marn, while also engaging in cross selling initiatives for Blu.

The Kuwaiti foodservice market

The Kuwaiti foodservice market is experiencing robust growth, projected at over 8%. This growth is fueled by the rising demand for quick-service restaurants, a significant customer segment for Jahez. With the market estimated at $3.26 Bn. USD in 2024 and expected to approach $5 Bn. by 2029, Jahez is well-positioned to capitalize on this expanding market for sustained success in Kuwait.

In the competitive Kuwaiti food delivery landscape, Jahez holds a significant position as the second largest player with over 12% market share. Despite intense competition, the sector witnessed a high order volume growth in 2023, including other verticals. Customer behavior is notably influenced by price sensitive offers, promotions, and brand exclusivities.

Challenges

During 2023, Jahez Kuwait encountered both internal and external challenges:

1. Internal challenges:

  • Localization efforts:

    o Jahez recognized the importance of localization — adapting its tools, services, and communication to suit the specific needs and preferences of the Kuwaiti market.

    o Efforts were directed toward ensuring that the platform resonated with local Kuwaiti culture, language, and user behavior. This involved adapting interfaces, optimizing user experiences, and tailoring features to align with local expectations.

    o By localizing tools, Jahez aimed to enhance user engagement, build trust, and foster a sense of familiarity among its customer base.

  • Data understanding and utilization:

    o Jahez actively worked on data-driven decision-making. Understanding data was crucial for optimizing operations, identifying trends, and making informed strategic choices.

    o By analyzing data related to user behavior, order patterns, delivery routes, and restaurant preferences, Jahez fine-tuned its services and allocated resources effectively.

    o The goal was to better serve the market by offering personalized experiences, efficient deliveries, and relevant promotions to the users.

    2. External challenges:

  • Changing local authorities’ guidelines and regulations:

    o Jahez operates in a dynamic regulatory environment. Local authorities frequently update guidelines related to food delivery, safety protocols, licensing, and operational standards.

    o Navigating these constantly evolving regulations required agility and adaptability. Jahez Kuwait had to stay informed, interpret legal changes, and swiftly implement necessary adjustments.

    o Compliance was critical to maintaining a positive reputation, avoiding penalties, and ensuring the safety of users, drivers, and restaurant partners.

In summary, Jahez’s internal focus on localization and data utilization, coupled with its adept handling of external regulatory challenges, allowed the company to thrive amidst a very competitive landscape.

Future Outlook

Jahez recognizes that significant growth opportunities exist in doubling down on its food delivery capabilities as well as the diversification into other verticals, including convenience stores, electronics, and gifts, among others.

Anticipation is high for the introduction of new features that will enhance the overall customer experience. Leveraging our current unique selling propositions such as our quick delivery service, our wide restaurant network and easy-to-use platform, we aim to differentiate ourselves from the competition.

In 2024, our focus will be onboarding high demand Quick Service Restaurant brands to increase order frequency and retention rates. Additionally, these brands will serve as digital acquisition tools to attract new users to the platform.