Few legacy family businesses manage to keep up with technological progress as successfully as Kibsons did. A leading importer and distributor of food products in the UAE for four decades, it pioneered fresh produce e-commerce in the country as early as 2016. CEO Halima Jumani, who spearheaded this consequential move, explains.
How did you come to drive Kibsons’ entry into the e-commerce space?
When I joined Kibsons [in 2007], my main priority was to make sure operations were set up correctly and cash was managed properly. Then, I got into finance and strategy. The third aspect was tech, to drive efficiencies, save on costs, have a vision for the business’s future, and, more importantly, improve transparency, timeliness, and communication with our suppliers all around the world.
Years later, the turning point happened on two fronts. First, we decided not to renew certain supermarket contracts because our supermarket distribution business segment was not performing well, and our 50 merchandisers who lost their jobs would be asked to leave the country, which kept us awake at night. Second, we were struggling with connecting innovative food products with consumers – supermarkets’ pricing selection structure was based on price, not on quality. So, how to bring healthy products to the consumers and save our merchandisers’ jobs?
Our 1.0 strategy was to look at our ‘what’ – what’s our unique value proposition? The answer was: Being the first point of contact for quality and cost, getting the right product at the right price. We then looked at our ‘who’ – who will appreciate our what? The answer was families who care about nutrition, understand the importance of a healthy lifestyle, and appreciate the value for quality. The ‘how’ was the easiest: our operations and infrastructure were already in place; we had a fleet of vehicles, all temperature-controlled, which is critical in our industry; we had the expertise; and, above all, we had the passion to deliver our products safely and on time.
So, in 2016, we circulated an Excel spreadsheet featuring all our fruits and vegetables to a group of family and friends. I was looking for 50 orders – for our 50 merchandisers – and our mandate was clear: this new segment was a spinoff, not our main business, and no ROI was expected. All I had to do was either break even or reinvest back into the segment at some point. Today, we have over 35,000 orders a week.
How did you scale so quickly?
The key was that, at the same time we created this Excel sheet, we not only had a warehouse management system in place for 15 years; we were incidentally launching our in-house ERP system too. It had nothing to do with e-commerce, which at that time was expected to be at least a decade away, but it integrated well with this new project.
We migrated from the Excel sheet to a simple HTML website, and we developed our first app, not for customers but for our drivers, to improve efficiency and, even more importantly, to make their lives easier. This inspired us to design an internal app to make pickers’ lives easier as well. And once these two apps were stabilised, we went on to create a consumer app. There was no point in going to the market if we were not prepared internally. It’s better to under-promise and over-deliver than the other way around.
It took us about two years to break even and, a year later, COVID happened. We were ready to scale and we were able to grow three folds in six weeks.
How did you maintain this growth after the pandemic subsided?
Post-COVID, our numbers stabilised. There’s always churn because people have options, but customers find us when we add value to them – we still are the only free same-day delivery service in the UAE. In addition, we’re constantly expanding our product range to offer new, different healthy products. Lastly, the buy-local movement has grown significantly; in two years, the number of local brands on our platform has more than doubled, local products have more than tripled, and our turnover has grown by over 25% in that segment alone. Our strategy has always been to procure as much local produce as possible, but today, with the significant investment in local innovative farming solutions, whether those products find a market in the UAE will determine the success of the country’s national food security strategy. Being able, as a homegrown UAE business, to play a small role in that, acting as a bridge, makes us very proud.
How are you planning to innovate further?
For us, product research is always number one – finding the best value and offering in the UAE and on the planet. Secondly, we’re always thinking about ways of using tech to optimise procurement and thus reduce food wastage, manage our operations better, and keep our operational costs low to remain price-competitive. Finally, health is now something that people take very seriously. The number of local success stories in Foodtech is growing and will inspire more action. This is just the beginning.
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