The increasing demand for online food delivery has led to a sharp rise in the number of cloud kitchen operators in Dubai. According to the recently-released PRIME (Posist Restaurant Industry & Market Evolution) Report – Middle East Edition, 65% of respondents expressed interest in setting up a cloud kitchen, also known as dark, satellite, virtual, or ghost kitchens. Owing to multiple factors, this delivery-only model has evolved into multiple new variants.
In this article, we will explain the driving factors behind the growth of cloud kitchens in the UAE.
Why Establishing A Cloud Kitchen In Dubai Is A High Profit, Low-Risk Business Idea
These are some of the reasons that have led to the rise of cloud kitchen businesses in Dubai.
1. Low Startup Costs
The upfront cost of opening a restaurant is quite high in an expensive city like Dubai. However, the cloud kitchen concept has an edge over brick-and-mortar restaurants in terms of fixed costs. With no physical presence; managing a cloud kitchen requires far less investment compared to a traditional restaurant business. With low rental costs, minimal infrastructure costs, low capital and maintenance costs, a cloud kitchen involves substantially less capital investment.
2. Better Revenues
In spite of high marketing spending and negligible visibility, cloud kitchen is a high-profit business. As the initial investment required to start a cloud kitchen model is much less when compared to a physical restaurant, this makes opening a cloud kitchen a low-risk venture. With lower upfront costs, business owners have greater flexibility to experiment with their menu and services thus making it a profitable business.
Moreover in the present times, as compared to the dine-in restaurants, cloud kitchens receive a higher number of orders than dine-in restaurants owing to the extensive growth of the online ordering sector during COVID-19. This again contributes to the betterment of restaurant revenues.
3. Easy Order Management
Order Management with a cloud kitchen model is quite streamlined. A cloud kitchen business partners with delivery apps or builds its own platform where people can place an order.
This gives operators better flexibility to establish cloud kitchen brands at different locations and ultimately enables them to reach out to more customers with a much shorter delivery time.
4. Enhanced Customer Services
Cloud kitchens facilitate faster services as there is a well-defined model of work. Customers place orders via food aggregator apps, the respective cloud kitchen located closest to them prepares the food, and there is a separate delivery network that delivers the food to the customer. It is popularly known as distributed cooking. So, restaurants can focus on their part of preparing food while delivery networks do their job.
All this makes the model effective. The prices that customers pay are nominal as cloud kitchens are cost-effective. Overall, the kitchens can make good profits in the UAE while customers also need to pay less for good and guaranteed food quality. Customers can order food fast and seamlessly using third-party apps.
These are some of the factors that have made cloud kitchens one of the most favoured restaurant business models in Dubai. For those thinking about opening a restaurant venture in Dubai, now is the time to make the most of this revolutionary business model.
