Muslim-friendly dining apps are a logical extension of the internet economy. But companies may quickly discover that their niche market is being overwhelmed with competition from unexpected players. The good news is that there are plenty of case studies on which ummah-focused startups can rely for business-strategy perspective. The bad news is that cities like Kuala Lumpur and Dubai, however cosmopolitan, may still not be able to offer the critical mass for a viable business model.
The dining-app business survives on razor-thin margins. It usually makes money by charging restaurants a token reservation fee. That approach demands a sizeable marketing budget to build restaurant sign-ups and a complementary outlay to generate consumer buzz. The cost cover for those expenses is hard to achieve, likely requiring dining-app companies to develop added revenue streams. For investors, the key to success in this space may be finding apps with multi-directional income streams, including geographic reach. ■
Our Vantage Point: The dining-app business is surprisingly complex. The consumer market is highly fragmented, siphoning off critical mass. Companies further underestimate substantial marketing requirements.
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Image: Travelling Muslims have difficulty finding halal restaurants. Credit: Annapustynnikova at Can Stock Photo Inc.