After raising $2 million in funding, Appetito, an Egyptian grocery home-delivery start-up, plans to expand its network of so-called "dark stores" in major cities. The company, which is responding to new consumer buying behaviors in the country, is betting on low prices rather than the speed of its service -- a choice that goes against the grain of its competitors.
Established in 2020 and boosted by covid lockdowns and restrictions, the Appetito start-up is shaking up traditional food shopping in Egypt. The application offers its customers on-demand delivery of food and essential care products to their homes through "dark stores" -- storage and dispatch warehouses located in the city that are only open to delivery personnel.
This kind of on-demand grocery shopping and delivery service is already well established in Europe with brands such as Cajoo, Gorillas or Flink. It is now gaining momentum in northeast Africa. Egyptians, especially younger generations, use their phones to place orders. "It's a huge market, and it's highly fragmented and multi-layered," Shehab Mokhtar, CEO of the start-up told TechCabal.
Growth of "dark stores" in the Egyptian market
Since raising $2 million in November 2021, the company has opened six new "dark stores" in Cairo and hopes to expand within the capital, as well as to Giza and Alexandria by the end of the year. Appetito plans to open 50 "dark stores" every year until 2024. One of its investors, AJ Okereke, a partner at Golden Palm, said last fall that Appetitio was "the first digital grocery service to utilize the 'dark' store model for hyper-local delivery directly to consumer doorsteps."
There are several delivery services in Egypt that operate using "dark stores." The company Talabat Mart already has about 20 such stores in the Cairo metropolitan area, for example.
But the major difference on which the start-up relies is the promise of low prices. By scheduling hourly or even weekly deliveries to its customers, Appetito is able to ensure them some savings on their orders. The start-up is betting on a slower delivery service than its competitors, which offer orders delivered in less than 30 minutes, while promising cost savings.
