When the name Careem comes up, the first thing that probably pops into your mind is the Dubai-based ride hailing app.
This burgeoning mobility service provider was estimated by The Economist in May 2017 as having operations in 53 cities in the Middle East, North Africa and South Asia, and valued it as of 2017 at roughly $1billion.
But today there is more into Careem not just being a ride hailing app.
What is it?
Careem today has ventured into e-commerce with its new launching of Dukkan.
Dukkan, the Arabic for shop, is used to sell 100 percent locally sourced clothing items with culturally-inspired designs, which will be delivered by the ride haling app’s pre-existing network of drivers.
A company statement quoted Zhila Shariat, Careem’s head of retail, as saying that “Careem is exploring a lot of other items for potentially delivery as the company works towards the goal of becoming the region’s “biggest mover of people and things” by 2020.”
“We have over 500,000 ‘captains’ in our network. We have the logistics infrastructure and on the ground knowledge,” she said. “We definitely want to fuel business for our existing captains as we create more demand.”
Dukkan was well received in Dubai and it is looking to expand to other markets with Saudi Arabia being the next on the company’s schedule.
Dukkan’s new collection will consist of t-shirts, sweatshirts, sweatpants and sweatshirt dresses, and will later introduce children’s t-shirts.
This new initiative by Careem though daring, is not really new.
Uber: from riding apps to delivery
Uber, the global ride hailing app built UberRush in 2015 to provide delivery logistics for merchants and enterprises such as grocery stores and florists while UberEats is targeted at restaurants and food delivery.
The New York Times quotes Jason Droege, vice president of UberEverything, the division under which UberEats operates, as saying “there’s a global trend towards delivery …As people use mobile phones more and more for everything in their lives, we’re starting to see a secular change in how people eat.”
According to NYTimes, the delivery service, available in more than 120 markets globally, sometimes eclipses Uber’s main ride-hailing business in markets like Tokyo; Taipei, Taiwan; and Seoul, South Korea.
“The number of trips taken by UberEats drivers grew by more than 24 times between March 2016 and March 2017. As of July, UberEats was profitable in 27 of the 108 cities where it operated,” it said.
Meanwhile, Quartz quoted one former Uber employee as saying that the delivery services ate into the labor supply for Uber’s core rides business.
Surprisingly, e-commerce is not only benefitting ride hailing apps, but it looks like airlines may soon consider venturing into such new trends.
How can airlines benefit from e-commerce?
A recent study by the Financial Times suggests that in-flight broadband, which will bring new services such as high-speed film and TV streaming and online shopping to passengers, has the potential to create a $130bn global market within the next 20 years, quoting a report by the London School of Economics and Inmarsat, the satellite operator.
According to the study the share that could be captured by airlines, which would provide access to these services during flights to a captive audience, is forecast to climb from $900m in 2018 to $30bn by 2035.
The study quoted Alexander Grous, media and communications lecturer at LSE and author of the report, saying that most carriers remain too focused on the simple service of offering broadband access.
“For example, airlines could team up with brands to offer continuous online shopping during the flight, with delivery either to the holiday destination or the home,” he said. “Airlines have a broadband mindset and have not fully embraced the potential of ecommerce,” he said.