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 were ~.

High internet penetration, rising working population and increasing number of single families led to growth in number of orders in the region. Service providers in 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 The Market Segmented?

By Product Category: Food & Beverages mapped as most demanded product category. This was followed by other categories. Carrefour, Lulu Hypermarket, Bawiq, El Grocer, Talabat specializes are major players in food & beverage category.  Fresh food (fruits, vegetables, dairy & eggs)   and baby food recognised 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 by house helps and they usually collect the order delivery therefore 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 facility, 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 was placed by women whereas ~% of the orders was placed by men in 2019.

~% of the online grocery buyers are frequent shoppers. They place the order between ~ times a month. ~% of 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 marketplace model in UAE. Pureplay model refers to an operating model where inventory of groceries is owned by the company and is sold to the consumers directly. Kibsons, Bawiq, Noon, Amazon follows pureplay model. Omnichannel model provides customers access to groceries from offline and online platform. Carrefour, Lulu Hypermarket, Aswaaq, Choithrams have been following omnichannel model.

Competitive Landscape

The competition in the industry is fragmented with 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 product offering and improve unit economics to increase margins. Companies with large product assortment, wide regional presence and express delivery are indentified 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 increase in 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:-

Difference between Online & Offline Grocery Shopping. Why Online Grocery is the Way Forward?

Target Addressable Audience

Supply Ecosystem and Competition Parameters

Demand Scenario, Target Customer and Factor Influencing Consumer Behavior

Technologies Facilitating Online Grocery Delivery Industry

Upcoming Technologies in Online Grocery Delivery Industry

Cross Comparison of Operating Models (Marketplace, Pureplay and Omni-channel)

Revenue Streams

Marketing Strategies

Addressable Gap in the Market and Possible Solutions

Emerging Business Strategies

Best Practices in Business

Seasonality Trends

Covid-19 Impact on UAE Online Grocery Delivery Market (Impact on KPIs, Monthly Orders, Impact on Consumer Behavior, What companies did to meet Excess Demand?)

Analyst Recommendations

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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