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