In the world of modern entrepreneurship, a fascinating trend is emerging — the cloud concept of building a business. We have now gone far beyond just moving in-house servers to the cloud; this innovative approach is allowing entrepreneurs and investors to own and operate traditional businesses without the burdens of physical infrastructure – conventional assets we once thought indispensable.
We have all seen (and probably used) these services already. It’s a complete re-think of what owning a business means, and it opens a number of doors that were previously closed to startups, entrepreneurs and investors.
So, let’s delve into this transformative phenomenon, exploring international examples and honing in on the situation in the GCC.
Cloud kitchens disrupt the restaurant industry
Picture owning a restaurant without the investment in brick-and-mortar establishments. Virtual restaurants operate solely through delivery platforms enabling entrepreneurs to enter the food industry without the need for a physical storefront.
Also known as ghost kitchens, virtual kitchens or dark kitchens, cloud kitchens represent a food service dedicated exclusively to preparing food for delivery or takeout orders. Multiple virtual brands may coexist, each offering distinct cuisines or menu items, all originating from the same kitchen space. Culinary professionals and kitchen staff handle the food preparation in the cloud kitchen, with the final products dispatched to customers via third-party delivery services such as Uber Eats, Talabat, Deliveroo, and CareemNow.
Typically, the cloud kitchen space is leased on an hourly or monthly basis and comes equipped with cooking apparatus and technology for efficient online order management. The GCC has emerged as a focal point for this industry, with companies like Sweetheart Kitchen (14 delivery units in the UAE and eight in Kuwait), Kitopi (raised USD 415m in 2021 and boasts a 4,000-strong workforce), and KitchenomiKs (Oman-based, hybrid foodtech startup that provides cloud kitchens).
The warehouse in the cloud – disrupting fulfilment
Drop shipping is a fulfilment model that enables entrepreneurs to delegate the handling and dispatch of products to a third party. This approach to fulfilment can be highly attractive to new businesses aiming for efficiency and minimal overhead costs. In short, you don’t need your own storage facilities, which opens up potential new industries (as well as the option to start your own dropshipping company.)
Major global players include the US-based Dropified, Sunrise Wholesale, and Inventory Source, while some of the most popular UAE-based drop shippers include eWorldTrade, AliExpress, DX, and LightInTheBox.
It’s also worth looking at US-based Deliverr, which has taken this idea a step further, using the ‘Uber model’. They considered how the ride-hailing giant does not build or own taxis yet efficiently utilises excess capacity from drivers. Deliverr, in turn, knows that many warehouses are not operating at full capacity, so it employs technology to utilise the available extra space. This is achieved through machine learning and predictive intelligence to discern the best warehouses for storing its clients’ goods.
In fact, cloud computing is not just about storage. It is disrupting all areas of the supply chain, from dispatching goods to consumers to moving giant containers across the world, with entrepreneurs no longer owning the physical assets or storage or transport but instead using AI and predictive analytics to look for gaps that can be filled. By its very nature, it allows scalability and flexibility, as well as real-time visibility.
How Uber revolutionised the taxi – and everything else
We can’t avoid mentioning Uber – the colossal transport company that doesn’t own a single vehicle or employ drivers. Not only significant in and of itself, Uber has also proven a model for many other new businesses, including ones outside the transport sector.
Because of their commitment to innovation, GCC cities could be considered prime hubs for emerging transportation solutions. The region’s success in ride-hailing is exemplified by Careem, the first Emirati company to achieve Unicorn status and become a regional leader. Initiatives like the Hyperloop One and the introduction of flying taxis highlight the region’s ambition to lead in transport innovation. The market is certainly looking attractive: a recent report by Infinium Global Research projected that the GCC ridesharing market would grow at a CAGR of 17% over the forecast period of 2021-2027.
Dubai alone offers a number of choices from the Dubai Taxi Corporation (you can hail them old style, or book online via an app), Hala on Careem, Uber, XXRide, Yango, Blacklane, and the recently launched Zed, which offers new levels of personalisation. Meanwhile, Saudi Arabia-based ride-hailing app Ego has formed a partnership with MoEngage, a customer engagement platform. This collaboration aims to utilise MoEngage to analyse optimal timing and channels for message delivery, primarily focusing on enhancing retention and increasing customer lifetime value.
The fashion brand – clothing of the future
Envision managing a clothing brand without stocking inventory or employing tailors. This revolutionary concept is made possible by leveraging cloud-based models to transform the traditional fashion industry by optimising resources, reducing overhead costs, and enhancing scalability. And it makes money. In fact, CBRE noted that the average profit of e-commerce stores is between 15% and 30%, while brick-and-mortar stores were at 8%.
In this cloud-driven model, the clothing brand serves as a platform that connects designers with manufacturers and consumers in a seamless, on-demand fashion ecosystem. Designers upload their creations onto the cloud platform, where manufacturers access and produce items as orders come in. This eliminates the need for large-scale production, warehousing, and inventory management, as products are created on a made-to-order basis
Much like the Uber model, this approach fosters collaboration and efficiency. Designers gain exposure without the financial risk associated with mass production, and manufacturers maximise their production capabilities without the burden of excess stock. The cloud facilitates secure transactions, order processing, and real-time communication between all stakeholders involved.
Where should the entrepreneur be looking for opportunities?
Some areas that entrepreneurs and investors should be looking at include:
- Ridesharing apps: Develop a platform for ridesharing services
- Cloud kitchens: Start an online restaurant without owning infrastructure
- Fashion brands: Create a clothing company without employing tailors
- Food delivery platforms: Create a cloud-based food delivery service
- Accommodation booking: Start an online platform for individuals to rent out their homes
- Peer-to-peer lending: Establish a platform that connects borrowers with individual lenders
- Crowdfunding platforms: Create an online platform that allows individuals to raise funds
- Online retail marketplace: Develop an e-commerce platform to sell products
- Online travel agencies: Build a cloud-based platform for flight and hotel booking
- Digital wallets and payments: Develop a digital wallet or payment platform
- Telemedicine services: Create a platform connecting patients with healthcare professionals
- Online learning platforms: Establish a cloud-based education platform
- Car-sharing services: Develop a platform allowing users to rent vehicles on demand
Conclusion
The paradigm shift towards ‘owning without owning’ facilitated by cloud technology has undeniably disrupted industries reliant on physical infrastructure ownership. The cloud empowers businesses to transcend traditional constraints, fostering agility and scalability.
Harnessing the potential of ‘owning without owning’ mandates the use of smart and targeted digital campaigns to amplify your brand and ensure sustained relevance. In addition, a seamless and efficient payment process is pivotal in capitalising on the advantages offered by the cloud, as is collaboration with a reputable company setup expert.
In the end, ‘owning without owning’ is not just a technological evolution but a business transformation. It’s opening up the world for entrepreneurs in a way we have not seen before, and we’re still only at the beginning.
