Careem Express Case Study Analysis and Go-To-Market Plan

Careem Express on the other hand is a GCC & MENA last mile delivery firm that provide fast

and efficient delivery solutions to companies. This case evaluates Careem Express’ results for

the two quarters, Q4’21 and Q1’22, and design a market entry commanding strategy to scale the

on-demand business in the UAE. The components of the analysis include KPIs, market

tendencies, and strategies for development, which will enable decision-making.

Case Study Data Analysis

GMV Comparison: Q4'21 vs Q1'22

To determine which quarter performed better in terms of Gross Merchandise Value (GMV), we

need to calculate the total GMV for each quarter and compare them.

Q4'21 GMV Calculation

October 2021: 15,500 × 31 × $2.0 = $961,000

November 2021: 18,000 × 30 × $1.9 = $1,026,000

December 2021: 17,500 × 31 × $1.8 = $976,500

Total Q4'21 GMV: $2,963,500

Q1'22 GMV Calculation

January 2022: 16,500 × 31 × $2.1 = $1,072,050

February 2022: 17,000 × 28 × $2.2 = $1,045,600

March 2022: 17,500 × 31 × $2.2 = $1,193,500

Total Q1'22 GMV: $3,311,150

Analysis: Q1'22 is the better quarter GMV-wise, with a total GMV of $3,311,150 compared to

Q4'21's $2,963,500. This represents an 11.73% increase in GMV from Q4'21 to Q1'22. The

superior performance in Q1'22 can be attributed to two main factors:

 1. Higher average trip fares: The average trip fare increased from $1.8-$2.0 in Q4'21 to

$2.1-$2.2 in Q1'22, indicating improved pricing strategies or higher-value orders (Chopra

& Meindl, 2016).

2. Consistent order volumes: Despite a slight dip in January, the average daily volume

remained relatively stable, with March 2022 matching the peak seen in November 2021.

Gross Margin Comparison: Q4'21 vs Q1'22

To determine which of the said quarters has better Gross Margin, Gross Margin needs to be

computed with the aid of plan area average trip fare and average plan area cost per order for each

month then multiply with volume and days in month.

Q4'21 Gross Margin Calculation

October 2021: 15,500 × 31 × ($2.0 - $1.9) = $48,050

November 2021: 18,000 × 30 × ($1.9 - $1.9) = $0

December 2021: 17,500 × 31 × ($1.8 - $1.8) = $0

Total Q4'21 Gross Margin: $48,050

Q1'22 Gross Margin Calculation

January 2022: 16,500 × 31 × ($2.1 - $1.9) = $102,300

February 2022: 17,000 × 28 × ($2.2 - $2.1) = $47,600

March 2022: 17,500 × 31 × ($2.2 - $2.1) = $54,250

Total Q1'22 Gross Margin: $204,150

Analysis: Q1'22 is significantly better in terms of Gross Margin, with a total of $204,150

compared to Q4'21's $48,050. This represents a 324.87% increase in Gross Margin from Q4'21

to Q1'22. The superior performance in Q1'22 can be attributed to several factors:

 1. Improved pricing: There was an improvement of the average trip fare in Q1’22, costs had

little change, hence improved margins (Porter, 1985).

2. Cost management: However, as shown above, while the average trip fares per order grew

in February and March 2022, the average cost orders remained relatively small, and this

shows that cost has been strictly managed (Kaplan & Norton, 1996).

3. Consistent profitability: In Q4’21, there was no gross margin reported for both November

and December, however all month in Q1’22 reported gross margin positively.

QOQ Volume Change: On-demand vs Same Day / Next Day (Q4'21 vs Q1'22)

In order to find out the QOQ volume change, it is necessary to find out the average contribution

by each type of services for each quarter and then compute the percentage change.

On-demand service

Q4'21 average volume contribution: (65% + 50% + 55%) / 3 = 56.67%

Q1'22 average volume contribution: (55% + 50% + 55%) / 3 = 53.33%

QOQ change: (53.33% - 56.67%) / 56.67% × 100 = -5.88%

Same Day / Next Day service

Q4'21 average volume contribution: (45% + 50% + 45%) / 3 = 46.67%

Q1'22 average volume contribution: (45% + 40% + 45%) / 3 = 43.33%

QOQ change: (43.33% - 46.67%) / 46.67% × 100 = -7.14%

Analysis: Volume contribution for both the services reduced from Q4’21 to Q1’22. The On-

demand service experienced a 5.88 percent increase in the groceries customer traffic. That is, the

first choice saw its volume drop by 5.88% diminishing further to 7.14% for the Same Day / Next

Day service. This suggests some form of change in the customer’s preference or the market

environment hence the need to imply and reroute (Kim & Mauborgne, 2005).
The volume contributions for both On-demand and Same Day/Next Day services experienced a

decrease between Q4'21 and Q1'22, with On-demand services decreasing by 5.88% and Same

Day/Next Day services by 7.14%. Several factors could have contributed to these changes:

● Seasonal Variations: Q4 refers to the fourth quarter of the fiscal year, often containing the

holiday periods; this tends to be a slow period compared to Q1 that follows it. Most of the

business especially F&B and retail trade operations a high season during the December

holidays and the low season is from January to March the subsequent year. The degree of

orders may also vary according to this season since a large number of orders may be

received during the particular times of the year.

● Market Saturation: However, where the Careem Express’s On-demand and Same

Day/Next Day business lines are established, there might be a market saturation issue in

the future. This can potentially result to a natural decline in the speed of growth in the

new number of clients and orders due to saturation of the market by the delivery services.

● Economic Factors: The following external factors relate to the economy: Customer

buying behaviors may shift over time; this may affect orders; Fluctuations in the inflation

rate may also alter orders;; Business cycles may affect orders. If for instance the

consumers and the business members are financially constrained, then they will cut down

their orders and deliveries.

● Operational Adjustments: Another volume-related factor is the volumes that may be

affected by any strategic/ operational changes that Careem Express may undertake during

the transition from Q4’21 to Q1’22. This ranges from changes in service delivery where

the company changes the kind of services it is providing, or a change in price where there

may be a short-term shift in the number of orders received.

 ● Competitor Actions: Competitors’ actions also have an impact on volumes particularly

those companies in the last mile delivery. This may directly impact the volume

contributions by diverting the attention of some of Careem Express` potential orders

through competition improvements, promotions by competitors and introduction of new

services.

QOQ GMV Change: On-demand vs Same Day / Next Day (Q4'21 vs Q1'22)

And therefore to arrive at the QOQ GMV change, requires to ascertain GMV for each service

type in both the quarters and then find the percentage change.

On-demand service

Q4'21 GMV: $2,963,500 × 56.67% = $1,679,315.45

Q1'22 GMV: $3,311,150 × 53.33% = $1,765,936.30

QOQ change: ($1,765,936.30 - $1,679,315.45) / $1,679,315.45 × 100 = 5.16%

Same Day / Next Day service

Q4'21 GMV: $2,963,500 × 46.67% = $1,382,984.55

Q1'22 GMV: $3,311,150 × 43.33% = $1,434,721.20

QOQ change: ($1,434,721.20 - $1,382,984.55) / $1,382,984.55 × 100 = 3.74%

Analysis: While the number of orders in each service type declined, the GMVs increased from

Q4’21 to Q1’22 for both service types. The on-demand service’s growth reached a 5.16 percent

increase. The overall Express service saw a 5.16% increase in GMV growth and the Same Day /

Next Day service market saw a 3.74% increase. Such an increase in GMV while having

decreased volume contributions can be attributed to the increase in average trip fares in Q1’22

(Osterwalder & Pigneur, 2010).

Go-To-Market Plan for On-demand Business Growth in UAE

As Careem Express’s vision for 2022 suggests, the company seeks to diversify beyond the

context of Dubai while moving further from its niche of the top-tier F&B clients. The following

is the go-to-market plan that will be adopted to meet this growth across verticals, clients,

geography and the sales pitch.

Target Verticals

1. Food & Beverage (F&B): However, keep on servicing the best customers in the next

economical class of restaurants, cafes’, cloud kitchens and expands the market share in

the mid-class of restaurants and cafes (Euromonitor International, 2022).

2. Grocery: Concentration on the supermarkets and convenience stores as well as the

specialty foods shops with consumer goods since the demand for the online grocery

shopping is on the rise (McKinsey & Company, 2021).

3. Pharmacy: In particular, it applies to both chain and independent pharmacy chains aiming

the essential goods delivery market that has been actively growing as a result of the

COVID-19 circumstances (PwC, 2021).

4. Instant Gifting: This implies that more coordination and collaboration with gift shops,

florists and other specialty shops which is informed by the need to tap into the trend that

involves people ordering gift on the go or at the last minute (Deloitte, 2022).

5. Retail: Diversify the client base through intrabusiness services with fashion electronics

and home goods retailers to increase the e-commerce delivery portfolio share (Bain &

Company, 2021).

Target Clients (Vertical-wise)

F&B

● Mid-tier restaurant chains (e.g., Nando's, PF Chang's, Wagamama)

 ● Popular local restaurants with multiple locations

● Cloud kitchens and virtual restaurant brands

● Catering services for corporate and events

Grocery

● Supermarket chains (e.g., Carrefour, Spinneys, Lulu Hypermarket)

● Convenience store chains (e.g., ZOOM, 7-Eleven, All Day)

● Specialty food stores (e.g., Organic Foods and Cafe, Kibsons)

● Local fresh produce markets and cooperatives

Pharmacy

● Chain pharmacies (e.g., Aster Pharmacy, Life Pharmacy, Boots)

● Independent pharmacies in high-traffic areas

● Online pharmacies and health & wellness e-commerce platforms

● Medical supply stores

Instant Gifting

● Flower shops and florist chains (e.g., Flower.ae, Bliss Flowers)

● Gift shops and souvenir stores in malls and tourist areas

● Specialty chocolate and confectionery shops (e.g., Patchi, Godiva)

● Personalized gift services and local artisans

Retail

● Fashion retailers (e.g., H&M, Zara, Namshi)

● Electronics stores (e.g., Sharaf DG, Jumbo Electronics, Virgin Megastore)

● Home goods stores (e.g., Home Centre, IKEA, Crate and Barrel)

● Local boutiques and concept stores

 Geographic Expansion (Emirates, Timeline, and Rationale)

Abu Dhabi (Q3 2022)

● Rationale: More so Abu Dhabi is the capital and the second largest emirate of UAE,

hence it addresses the issue of huge population density and high per capita income. Other

factors include its mixed economy and the improvement in the country’s technological

industry that perfectly complements Careem Express’s service provision (Abu Dhabi

Government, 2022).

Sharjah (Q4 2022)

● Rationale: Being the third largest emirate of UAE and being a part of Dubai-Sharjah-

Ajman mega city, it is a right expansion option. It is strategically located in Dubai, where

operational efficiency and effective deployment of resources are possible (Sharjah

Investment and Development Authority, 2022).

Ajman (Q1 2023)

● Rationale: Still, at present, Ajman is the smallest of emirates and has a high population

density although the business development is rather fast there. Further on their expansion

here fills the gap for the last Dubai-Sharjah-Ajman metro area (Ajman Department of

Economic Development, 2022).

Ras Al Khaimah (Q2 2023)

● Rationale: As Ras Al Khaimah focuses on the development of the tourism, and still has

potential to become a business city, it offers many partnership prospects, especially in the

area of resorts and hotels. It is also favourably located and there are opportunities for its

expansion to the northern emirates (Ras Al Khaimah Economic Zone, 2022).

Fujairah and Umm Al Quwain (Q3 2023)

 ● Rationale: However, the Careem Express service that now reaches the remaining two

emirates, Fujairah and Umm Al Quwain, still constitutes the mid-and-small markets.

Concentration on core business cities and other unknown interest and tourist destinations

within these emirates for optimality and profitability (UAE Government, 2022).

Sales Pitch (Key Talking Points)

Proven Track Record

● Highlight success stories with top-tier F&B clients in Dubai

● Share case studies demonstrating improved efficiency and customer satisfaction

● Emphasize Careem's brand recognition and trust in the market

Customized Solutions

● Provide logistics solutions aligned to the specific verticals that require delivery services

● Integrate API to make the process of order taking and tracking as fast and efficient as

possible

● Stress the ability to respond to each client’s needs and meet their specific demands.

Operational Excellence

● Demonstrate modern technology in terms of optimum route planning as well as real time

tracking.

● Emphasize the driver training programs and guarantee measures of the vehicle.

● Stress delivery commitment by providing goods within required deadlines with the least

number of complaints from the clients.

Cost-Effectiveness

● Show time and cost savings compared to having own delivery fleets.

● Introduce fixed price per offer and limited time offers for new customers.
 ● Emphasise on the possibility of increasing the volumes of operations without increasing

the fixed costs to the clients.

Market Insights and Analytics

● Provide accurate extra information on delivery trends and preferences of the customers.

● Assist in drafting and or preparing regular performance reports and or analysis for

improvement.

● Stress the feature that allows clients to rely on the given data and make appropriate

decisions.

Sustainability Initiatives

● Leverage environmentally friendly means of delivering products; for instance, through

electric vehicles or well-planned delivery routes.

● Highlight activities that will help in the reduction of carbon emission and packaging

material.

● Highlight the continuous correlation to UAE’s sustainable development goals (UAE

Government, 2021).

Customer Experience Enhancement

● Explain how Careem Express can enhance satisfaction of the end-consumers

● Some other points that needs to be emphasized are features like the real time tracking and

delivery notification.

● Stress how clients’ brand will benefit from the service provision.

Scalability and Flexibility

● Outline the capacity to deal with varying sales during the busy seasons.
 ● Stress on its capability to scale its business in tandem with the growth of the client’s

operations.

● Step up advertising messages that focus on the simplicity of integration and the brief

period of time required to implement new features.

Dedicated Support

● Ensure that each of the clients is assigned a unique account to manage for the firm.

● Ensure provision of customer support for clients as well as the end consumers at any one

time.

● Cultivate the business culture values supporting self-improvement and a problem-solving

attitude.

Competitive Advantage

● Emphasize how Careem Express is situated in a league of its very own.

● Demonstrate how the technology of the service is distinct from the rest.

● Stress on how it is advantageous and safer to work with a reputable company.

It is this detailed go-to-market strategy that would enable Careem Express to scale its on-demand

business within the UAE. The major strategies include venturing into new verticals, focusing on

strategic clients, geo-cloning, adaptation of a compelling value proposition that would enable it

appeal to the clients. Success in this market will depend on constant performance evaluations,

flexibility and other factors (Johnson et al., 2017).

Conclusion

Performance analysis of Careem Express shows positive growth in Q1'22 as compared to Q4'21.

The Market-to-Market Strategy outlines a strategy to harness this growth, to expand the demand

for jobs across the UAE. By targeting new customers and geographical areas, Careem Express
can significantly increase its market share. A well-defined sales pitch highlighting the strengths

and value proposition of Careem Express will help attract new customers. But careful

consideration of the competitive environment, regulations at Emirates, maintaining operational

excellence during expansion and constantly monitoring KPIs, competitor analysis and optimizing

market trends will get Careem Express to their ambitious development goals. By implementing

this comprehensive strategy and addressing potential challenges, Careem Express can strengthen

its position as the leading on-demand delivery service in the UAE.

 References

Abu Dhabi Government. (2022). Abu Dhabi Economic Vision 2030.

https://www.actvet.gov.ae/en/Media/Lists/ELibraryLD/economic-vision-2030-full-versionEn.pdf

Ajman Department of Economic Development. (2022). Ajman Economic Report 2022.

https://www.ajmanded.ae/en/

Bain & Company. (2021). E-commerce in MENA: Opportunity Beyond the Hype.

https://www.bain.com/insights/ecommerce-in-MENA-opportunity-beyond-the-hype/

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation

(6th ed.). Pearson.

Deloitte. (2022). Global Powers of Retailing 2022.

https://www2.deloitte.com/global/en/pages/consumer-business/articles/global-powers-of-

retailing.html

Euromonitor International. (2022). Consumer Foodservice in the United Arab Emirates.

https://www.euromonitor.com/consumer-foodservice-in-the-united-arab-emirates/report

Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2017). Exploring Strategy:

Text and Cases (11th ed.). Pearson.

Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into

Action. Harvard Business School Press.

Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market

Space and Make the Competition Irrelevant. Harvard Business School Press.

McKinsey & Company. (2021). The Future of Online Grocery in MENA.

https://www.mckinsey.de/~/media/mckinsey/locations/europe%20and%20middle%20east/

deutschland/news/presse/2021/2021-03-29%20pm%20state%20of%20grocery/disruption-and-

uncertainty-the-state-of-grocery-retail-2021-europe-final.pdf
 Appendices

Appendix A: Charts and Tables

Fig.1 Careem Express GMV comparison (Q4’21 vs Q1’22)

Fig .2 Careem express gross margin comparison (Q4’21 vs Q1’22)

 Fig.3 Careem express GMV

Fig .4 Careem express gross margin

 Fig .5 Careem express order volume (Q4’21 vs Q1’22)

Fig .6 Careem express GMV (on-demand vs same day/next day Q4’21 vs Q1’22)

Table 1: Q4'21 vs Q1'22 Performance Analysis - Careem Express

Metric Q4'21 Q1'22 Change

GMV $2,963,500 $3,311,150 11.73% Increase

Gross Margin $48,050 $204,150 324.87%

Increase

On-demand Order Volume 56.67% 53.33% 5.88% Decrease

Same Day/Next Day Order 46.67% 43.33% 7.14% Decrease

Volume

On-demand GMV $1,679,315.4 $1,765,936.3 5.16% Increase

5 0

Same Day/Next Day GMV $1,382,984.5 $1,434,721.2 3.74% Increase

5 0