Future of UAE Online Grocery Delivery Market: Ken Research

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How Is the Online Grocery Delivery Market Positioned In UAE?

UAE Online Grocery Delivery service gained traction among consumers as it allows customers to avoid the hassle of crowds, payment & parking queues and offers convenience as one doesn’t need to be at home to pick up the order. Major grocery delivery companies entered the market between 2015 and 2017.

The Online Grocery Delivery Market in UAE is positioned to be at a growth stage with the number of orders increasing at a CAGR ~% during the period 2016-2019. The number of grocery users in 2019 was ~.

High internet penetration, rising working population, and an increasing number of single families led to growth in the number of orders in the region. Service providers in the UAE are constantly upgrading themselves to adapt to the needs of the customers. Over the years, companies have expanded their product portfolios from food & beverages to household supplies, baby food, fresh food, fish & meat, and other product categories.

UAE Online Grocery Market

How Is Market Segmented?

By Product Category: Food & Beverages mapped as the most demanded product category. This was followed by other categories. Carrefour, Lulu Hypermarket, Bawiq, El Grocer, Talabat specializes are major players in the food & beverage category.  Fresh food (fruits, vegetables, dairy & eggs) and baby food recognized as the emerging categories.

By Mode of Payment: Demand is dominated by pre-delivery online payment such as credit and debit cards. This was followed by card on delivery and cash on delivery. In Dubai and Abu Dhabi majority of household chores are taken care of by house helps and they usually collect the order delivery, therefore, the customer prefers pre delivery payment.

By Region: Dubai and Abu Dhabi major cities based on demand and supply of online grocery services. Dubai & Abu Dhabi is more commercialized in terms of setting up warehousing facilities, transportation, procurement of grocery, and carrying out other backend operations.

Working professionals, who are the major end-users of online grocery delivery services, are concentrated in Dubai and Abu Dhabi.

Who is the Target Customer?

The demand for online grocery is rising among working professionals & married couples as they have less time to physically visit a store for grocery shopping. Currently, there are close to ~ million working professionals living in the UAE.

~ % of grocery orders were placed by customers belonging to 25-44 age groups. In addition to this, ~% of the grocery orders were placed by women whereas ~% of the orders were placed by men in 2019.

~% of the online grocery buyers are frequent shoppers. They place the order between ~ times a month. ~% of the average monthly household expenditure valued at ~ AED is spent on grocery shopping.

Operating Models

Marketplace model of grocery delivery refers to a company providing an e-commerce platform that connects customers and grocery stores for the purpose of buying and selling groceries respectively. Instashop, Bawiq, El Grocer has been following the marketplace model in UAE. Pureplay model refers to an operating model where the inventory of groceries is owned by the company and is sold to the consumers directly. Kibsons, Bawiq, Noon, Amazon follows the pureplay model. The Omnichannel model provides customers access to groceries from offline and online platforms. Carrefour, Lulu Hypermarket, Aswaaq, Choithrams have been following the omnichannel model.

Competitive Landscape

The competition in the industry is fragmented with the presence of more than more than 25 players in the industry.  Some of the major players include Carrefour, Lulu Hypermarket, Instashop, Bawiq, Noon.com, Amazon, Bulkwhiz, ElGrocer, Kibsons, Trolley.ae, and Farmbox.

Companies are increasingly evolving their business strategies in order to elevate the user experience. Companies have been battling against each other to acquire and retain clients, expand geographical presence, expand the product offerings, and improve unit economics to increase margins. Companies with large product assortment, wide regional presence, and express delivery are identified as clear leaders in the industry.

What Is the Future of UAE Online Grocery Delivery Market?

The online grocery delivery market GMV in UAE is expected to reach ~AED million by the end of 2025. In addition to this, the number of orders is expected to increase from ~ Million in 2019 to ~ Million by 2025. It is anticipated that the average order size in the region would decline owing to an increase in the frequency of orders placed by the customer.

Impact of Covid-19: As a result of the global pandemic COVID-19 there will be a drastic increase in the number of orders, average order size, and delivery time across the industry.  Companies partnered with third-party delivery companies to manage last-mile logistics. In addition to this, in Abu Dhabi and Dubai, companies partnered with taxi fleets to take care of door-to-door delivery.

Key Segments Covered: –

By Region

Dubai

Abu Dhabi

Other Emirates

By Age Group

18-24 years

25-34 years

35-44 years

 45+ years

By Product Category

Food & Beverages

Household Supplies

Beauty and Health

Baby and Kids

Fresh Food

By Gender

Male

Gender

By Mode of Payment

Pre-Delivery Online Payment

Card on Delivery

Cash on Delivery

Companies Covered

Carrefour

Lulu Hypermarket

Instashop

Kibsons

El Grocer

Trolley.ae

Bawiq

Amazon

Noon

Farmbox

Bulkwhiz

Key Target Audience

Online Grocery Delivery Companies

Supermarkets & Hypermarkets

E-commerce Companies

Food Delivery Companies

Investors

Time Period Captured in the Report: –

Historical Period: 2016–2019

Forecast Period: 2020-2025

Key Topics Covered in the Report: –

online grocery delivery market GMV in UAE

Dubai Online Grocery Order Size

Online grocery delivery Dubai

Impact of COVID-19 on UAE Online Grocery Delivery Market

COVID-19 Impact on UAE Online Grocery Delivery Market

Online Grocery Delivery Companies in UAE

Hypermarkets Role in UAE Online Grocery Delivery Market

E-commerce Companies Growth in UAE

Food Delivery Companies Share in UAE

Technologies in Online Grocery Delivery Industry UAE

Annual Online Grocery Demand in UAE

Impact of Covid-19 on Monthly Orders in UAE

UAE Average Order Grocery Size

Online Grocery Shopping in Abu Dhabi

Online Grocery Delivery Companies in UAE

For More Information on the Research Report, refer to below links: –

UAE Online Grocery Delivery Industry Future

Related Reports by Ken Research: –

UK Online Retail Market Outlook to 2025 – By Product Categories (Apparel and Footwear, Food and Drink, Media Products, Consumer Electronics and Others), By Desktop and Mobile Mode, By Gender (Male and Female) and By Mode of Payment (Debit+Credit Card, Net Banking and Cash on Delivery)

Taiwan E-Commerce Market Outlook to 2023 – Online Retail (By Product Categories, By Desktop and Mobile, By Gender); Online Travel (By Intermediary and Direct Online Sale and By Desktop and Mobile); Online Payment Gateway Market

UAE Logistics and Warehousing Market Outlook to 2025 – By Road , Sea and Air Freight Forwarding; Domestic and International Freight, Major Flow Corridors, Integrated and Contract Freight Forwarding; By Warehousing (Industrial / Retail, CFS / Inland Container Depot & Cold Storage, Agriculture), End Users (Manufacturing, Retail, Food and Beverage, Automotive, Oil and Gas, Healthcare), Type of Warehouses; By Courier Express & Parcel Market , and, E-commerce Logistics

Contact Us: –
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249

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