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This article is part of a series on pioneering entrepreneurs in Kuwait that Entrepreneur Middle East has built in collaboration with Kuwait Finance House. Kuwait Finance House is considered a pioneer in Islamic finance or Sharia'a compliant banking, with it being the first Islamic bank established in 1977 in the State of Kuwait, and is today one of the foremost Islamic financial institutions in the world.
Driven by a passion in the food industry, as well as equipped with his experience as a former Partner at GCC-based food delivery platform Talabat, co-founder and CEO Mubarak Jaffar launched KLC Virtual Restaurants as a restaurant company with a pretty simple model: creating food concepts that can be delivered at home.
Formerly known as Kuwait London Company, Jaffar along with Nabil Khalid Jaffar (Chairman) and Mohamed Nabil Jaffar (Board Member), set up their first delivery-only restaurant aptly named The Kitchen in 2009, focusing on delivering flavorful international dishes within a reasonable time at affordable prices. Food delivery, says Jaffar, was then dominated by quick service restaurants, while casual dining restaurants didn't have a strong presence in the delivery market. While the delivery market was challenging at the time, he says that when they joined with Talabat as a restaurant partner, they saw a huge spike in orders. "This encouraged us to develop and expand our restaurant business further, and it was also around this time that online food delivery was starting to grow exponentially."
This was when they spotted the growing demand for food delivery, and created a model that would leverage on the growing market. The business model focused on creating delivery-only restaurants for high demand items and cuisines. "We saw a gap in the market for quality food from a variety of cuisines delivered within a reasonable time," says Jaffar. While the food delivery market is extremely saturated, the team found that there is still a lot of cuisines in specific areas that aren't available to customers yet. "Our goal is to find these gaps, and introduce brands that can satisfy consumer demands."
Source: KLC Virtual Restaurants
As an example, Jaffar points out how they noticed a high demand for Mexican food, but found a limited number of restaurants delivering the cuisine. The startup then launched Taco Eataco in 2019 to satisfy the demand, and quickly saw positive results. As a company operating in an extremely competitive market, Jaffar calls their strategy as one that constantly adapts and evolves to an ever-changing market, leading them to focus on more niche cuisines. He commends his team for workin tirelessly for every launch and strives to appease the local taste and standard of the Kuwaiti market. "Our virtual restaurant business model gives us the flexibility to take a higher risk and focus on niche cuisines, as the cost of launching these virtual brands is significantly reduced, compared to the traditional restaurant business model whereby we utilize our cloud kitchens and only incur other minimal costs."
Currently, the multi-brand virtual restaurant company is operating 18 kitchens and 20 brands in Kuwait and the UAE covering a variety of cuisines, with the goal to be one of the leading virtual delivery restaurant groups in the region. Some of their brands include The Junkyard, Proper Sliders, Mission Katsu Curry, and more. As for what they have in mind next, Jaffar says they're researching food delivery trends in Kuwait and globally, and will continue to develop and upgrade, menus, recipes and introduce new brands to the market. While in Kuwait, they operate their virtual brands from their own cloud kitchens, in Dubai, they have recently teamed up with a strategic kitchen operator to expand their brand with the operator's network. They are also keen on exploring expansion across the rest of the GCC.
Source: KLC Virtual Restaurants
"TREP TALK: Q&A with Mubarak Jaffar, co-founder and CEO, KLC Virtual Restaurants
What are the three main pillars of the profit model of your business? How has that changed over time?
"Our virtual restaurants operate from cloud kitchens and are available for delivery, pick-up and home catering. By being a delivery-only restaurant, we avoid all the costs associated with a dine-in restaurant. The capital saved from this can instead be invested into acquiring better ingredients, equipment, and packaging, while still being competitively priced. This is one of the main advantages of this business model that makes virtual restaurants operating from shared kitchens a competitive player in the food delivery market. Furthermore, our cloud kitchens have better delivery infrastructure, which enables them to take on larger volumes of orders and are located in areas which are delivery-friendly and operate 24/7. As delivery has gained popularity, more cuisines which were traditionally dine-in based, have shifted which has allowed us to venture into a variety of cuisines and fully utilize our outlets and maximize efficiency."
What has been the most negative feedback on KLC Virtual Restaurants that you have received, and how did you go about it?
"As the market became more competitive, consumer expectations went up, which led to restaurants offering a better overall delivery experience. For example, several years back it was completely normal for restaurants to deliver food within 60-75 minutes, whereas today 30-40 minutes is expected to stay competitive. Our biggest challenge was to reduce the delivery time as much as possible, create tasty dishes that were delivery-friendly and had a short preparation time to avoid late and cold deliveries. We were able to achieve this by opening more delivery-friendly locations across Kuwait and reducing our coverage areas, whilst also developing menus introducing delicious dishes that were made and packaged specifically for delivery."
What are some of the main considerations that entrepreneurs should keep when starting up a business in Kuwait?
"Having the right team with a positive mentality is key to starting and growing any business. Each and every one of our team members have played an essential role in developing this organization. These key team members joined us before we made the transformation and evolved into a multi-brand virtual restaurant company, and their dedication and flexibility to adapt has seen them excel and grow within this industry. In addition, conducting all the groundwork and research prior to venturing into any business is extremely crucial. The Kuwaiti market is relatively small and extremely competitive, given the limited research and studies available, it is key to really understand the latest local trends and developments happening before considering setting up your business in Kuwait."
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