Bahraini start-up helps restaurants in the GCC market digitize reservations

The new app will help customers to book and restaurants to manage. (Supplied)
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Updated 10 January 2020

Bahraini start-up helps restaurants in the GCC market digitize reservations

  • Company has developed an electronic system for table and reservation management
  • The GCC region is expected to have 5,500 new restaurants and eating spaces by 2020

MANAMA: Fueled by a young population and a culture where nourishment plays a prominent part in most social gatherings, the food economy in the Middle East and North Africa region shows no signs of a slowdown.

This is particularly evident in Gulf Cooperation Council (GCC) countries, where the food and beverage sector is expected to grow by more than 7 percent annually to an estimated $196 billion in 2021, according to Mena Research Partners.

By 2020, GCC countries will see 5,500 new restaurants and eating spaces enter an already overcrowded market, which makes innovation essential for maintaining profitability.

“The food and beverage sector is very exciting across the whole region right now,” said Nezar Kadhem, founder of the Bahraini startup Eat, which is pursuing a regional expansion with a particular focus in Saudi Arabia.

“In Dubai, we’re looking at Expo as an exciting driver of innovation in the restaurant space. But I think the big story in the coming months and years will be Saudi Arabia.”

His company has developed an electronic system for table and reservation management.

Restaurants in the region are known for generous portions, hospitality and culinary experiences, but business management has remained largely unchanged.

“We are now in a time where tech solutions for the restaurant industry are becoming more robust and can actually help restaurateurs solve some of their biggest challenges,” said Sebastiaan Van de Rijt in an interview with QSR magazine.

The entrepreneur operated 10 Japanese cuisine restaurants in Belgium before moving to California to launch an innovative Asian food franchise called Bamboo Asia.

Kadhem and his co-founder, David Feuillard, were both 25-years-old when they launched Eat in February 2015.

The service is available to both customers and restaurant owners via two separate solutions. Diners get a smartphone app to browse local restaurants, read reviews, view menus and make reservations.

Restaurants are offered a platform handling online reservations, table management and restaurant analytics, as well as a dedicated customer relationship management and marketing system.

“Implementation is incredibly important. All great businesses start with an idea, but ultimately, it’s sustained execution over the years that really drives success for startups,” said Kadhem.

His venture capitalizes on the fact that it operates a locally headquartered solution.

Eat aims to offer its clients local market knowledge, on-the-ground support and engineering presence to deal with technical emergencies, plus strategic partnerships with Google, TripAdvisor, Zomato and other local partners to give restaurants access to potential customers.

However, the regional market remains extremely competitive and challenging to navigate even for a business that does not sell food.

Kadhem describes a sensitive balance that startups need to maintain so they can move forward. He emphasizes funding, a great team and initial traction for the product.

“This is the hard part: How do you get traction without a team, or how do you get a team without funding?” he asked.

Eat started with pre-seed capital of $100,000 from Tenmou. It has now successfully raised a total of $4.2 million from multiple investors and has over 2,000 restaurants across 20 countries as clients, serving more than 10 million diners along the way.

According to Kadhem, however, raising funds was not enough — it was always a challenge to reach the next milestone.

Eat chose to focus first on the smaller Bahraini market and then move on to conquer the tougher ones.

“(It is) a market interrupted by competition, with a great mindset for entrepreneurship, where customers are forgiving and wanting to give feedback,” he said.

This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region. 

Houthi banknote ban sparks crisis in Yemen

Updated 20 January 2020

Houthi banknote ban sparks crisis in Yemen

  • Locals are bracing for a spike in fuel prices, which occurs when riyal dives

AL-MUKALLA, Yemen: Prices of basic imported goods increased 10 percent in government-controlled areas of Yemen this weekend — a result of the Houthi ban on newly printed banknotes.

“Importers told us the increase is due to the fall of the Yemeni riyal against the dollar and the Saudi riyal,” Mohammed, a shop owner in Al-Mukalla told Arab News.

The Iran-backed Houthis issued a ban on the use of banknotes released by the Central Bank in Aden, saying the move is meant to stop inflation and the deterioration of the Yemeni riyal against hard currencies. The Houthis have vowed to confiscate new bills and punish traders who possess or use them.

When the Houthis issued the ban a month ago, the Yemeni riyal was trading at 600 against the dollar.

The riyal has since fallen in value to around 650, forcing local importers to increase the prices of goods, and demonstrating
how areas liberated from the Houthis are still vulnerable to their economic decisions.

Locals are also bracing for a spike in fuel prices, which usually occurs when the Yemeni riyal dives.

Since December, Houthi-controlled areas such as Sanaa and other heavily populated areas in northern Yemen have suffered from a severe credit crisis that has pushed locals to exchange new bills with scarce and damaged old ones, or converting them to the dollar or Saudi riyal.

The liquidity crisis has prompted local exchange companies to freeze government salaries, exacerbating suffering in a country that is experiencing the world’s worst humanitarian crisis, according to the UN. 

“My agency managed to get rid of new notes here and there. We now only accept Saudi riyals or old bills,” a young man who runs a travel agency in Sanaa told Arab News on condition of anonymity to protect his identity. 

“Traders who have a lot of new bills smuggle them inside goods to be delivered to government-controlled areas, where they’re exchanged for old banknotes.”

The dollar is traded at 580 Yemeni riyals in Houthi-controlled areas, lending weight to economists’ speculation that the decision could create two economies, derail business between liberated areas and those under Houthi control, and boost currency arbitrage on the black market. 

Another repercussion of the ban is the unprecedented level of smuggling of hard and local currency between north and south.

In Al-Mukalla, local exchange companies told Arab News on Sunday that big traders in Sanaa smuggle hard currencies into liberated areas, where they are sold at higher rates. 

“They buy the dollar at 580 in Sanaa and sell it here at 640,” said Abu Awadh, a worker at a local exchange company who used a nom de guerre because he is not authorized to speak to reporters. Demand for the dollar and the Saudi riyal has decreased for the first time in years, he added.

Despite an abundance of the dollar in the market, the Yemeni riyal continues to plunge. According to local traders, the reason is that currency dealers move dollars between liberated areas seeking higher rates. 

The internationally recognized government in Aden, which has condemned the ban, appears powerless against its repercussions.

The Economic Reforms Team, a group of economic experts, warned that the Houthi decision could cause humanitarian, economic, social and political consequences. It urged warring parties in Yemen not to use the economy as a weapon.