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Future Potential Market of LEVs in Last Mile Delivery Industry in KSA

Favorable Government Policies and Better Charging Infrastructure Availability to drive the LEV Sales in KSA Market

Region:Middle East

Author(s):Nishika Chowcharia

Product Code:KR1046

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Published On

February 2021

Total pages

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About the Report

The report titled “Future Potential Market of LEVs in Last Mile Delivery Industry in KSA – Favorable Government Policies and Better Charging Infrastructure Availability to drive the LEV Sales in KSA Market” provides a comprehensive analysis of the future potential of Light Electric Vehicle industry in KSA. The report covers various aspects including the current EV Scenario and charging infrsatructure status in KSA along with the business potential of CEP, E-Commerce, Food and Grocery Delivery industry in terms of number of orders and fleet metrics (Fleet type, average distance travelled, number of delivery fleets, maintenance charges and payload capacity), major trends and development, issues and challenges, government regulations and competition benchmarking. The report concludes with market projections for future of the industry including forecasted industry size by EV sales volume in best, neutral and worst case scenario.

KSA Electric Vehicle Market

EVs are slowly gaining traction with less than 0.5% of vehicles deployed as PHEVs in Saudi Arabia. Efforts to create a market for EVs are consistent with the Saudi Crown Prince Muhammed bin Salman’s Vision 2030 plan, which aims to reduce the country’s dependence on oil, diversify the economy, and implement a range of social reforms. The EV infrastructure in Saudi Arabia is still lagging behind as the government is yet to install charging stations in public areas.

Several gaps in the EV market such as a limited hybrid car range, high prices, insufficient battery life and an underdeveloped charging ecosystem are yet to be filled. Fleet operators need to create and manage vehicle service infrastructure and charging infrastructure on their own due to limited availability of existing set-ups in public domain.

Last-Mile Delivery Industry in KSA

Business Side Potential for LEVs in KSA CEP Industry: Domestic express courier dominates the market and is expected to register revenue growth at a CAGR of 4.4% and growth in shipments at a CAGR of 8.6% during the forecasted year 2020-2030. CEP Shipments include E-Commerce, Pharma and Grocery deliveries. The express companies such as UPS, DHL and Saudi Post use four-wheelers particularly small vans, to deliver parcels/packages in Saudi Arabia. E-commerce delivery vans usually make 45-50 deliveries in a day, with an average trip length of 100 kms in Tier 1 cities and 50 kms in Tier 2/3 cities. Major players in this category include Saudi Post, Naquel Express, SMSA Express, DHL, Aramex and UPS. Currently, LEVs do not promise a high adoption potential attributed to both a high cost disparity and a lack of vehicle. However, small format EVs may gain momentum in the near future, given their lower fuel and maintenance costs. They are also less dependent on charging infrastructure, since their power requirements are lower, and they are more likely to come in models that allow battery swapping.

Business Side Potential for LEVs in Grocery Delivery Industry: The industry is at nascent stage registering double digit growth rate between 30-40% in revenue terms. Online grocery penetration in terms of users is expected to increase from 3.7% in 2019 to 20% by 2025 owing shift in customer preference from offline to online grocery shopping. Grocery companies such as Danube and Carrefour have their own in-house fleet whereas others usually partner with third party operators to fulfill customer orders. Riyadh, Medina and Makkah are recognized as regions with maximum demand and supply of online grocery service where LEVs could be initially deployed. Expanding in-house delivery fleet or partnering with fleet management companies on contractual basis will enable the companies to minimize the costs & gain a competitive edge in the industry. Major companies in the segment include Nana Direct, Zadfresh, Danube, Qareeb and Carrefour.

Business Side Potential for LEVs in Food Delivery Industry: Saudi Arabia witnessed an unprecedented leapfrog in its online food delivery market for the past few years. The industry is expected to register a revenue growth of 7.2% CAGR during the forecaster year fulfilling over 200 million orders. Aggregator platforms like Hungrstation, Careem and Jahez have expanded all over the kingdom through the sale of reliable infrastructure solutions and attractive commission rates for restaurants. The companies operate on pay per delivery model where the freelancers owning an car or a two wheeler are hired and paid on the basis of the number of orders delivered. Major companies in the segment include Hungerstation, talabat, Careem, Jahez and Mrsool. Partnership with restaurants, malls, real-estate developers and other commercial hubs should be explored for the potential deployment of charging infrastructure for LEVs. Popular markets and food and beverage pick-up points are the ideal charging / swapping hubs to keep an EV or fleet ready for both last-mile goods and food deliveries.

Identification of Gaps in Last Mile Delivery: Most e-commerce retailers in KSA struggle with last-mile delivery as delays, reduced success rate & difficulty cash on delivery (COD) handling. Expectation of same-day deliveries from the consumers puts a greater strain on the budget. Inconsistent demand, with spikes during festive seasons such as Ramadan put additional pressure on supply side ecosystem for e-commerce logistics and hyperlocal logistic service providers.

E-com Retailers need to come up with solutions such as Tech-Enabled E-com Logistics Platform/Automated Shipping Software, B2B SAAS Platform and Digital Freight Brokers/ Load Discovery Aggregator Platform to solve the LMD problem in an efficient way to meet the growing customer demands

Top 3 Oppurtunities for LEVs in Last-Mile Delivery:

1. E-Mobility Solutions: E-commerce players like Amazon witnessing a large volume of orders and requiring larger delivery fleets will slowly move towards LEVs by partnering with e-mobility startups and suppliers to convert their fleet into an e-fleet.

2. Reduced Operational Cost: The cost to rent and maintain e-vehicles like e-scooters and e-cars will be lower in comparison to their ICE counterparts since there is no additional expenses like petrol/diesel costs.

3. Dealership and Franchise Oppurtunities: Entry of new players in the EV space creates myriad opportunities for prospective companies to explore dealer/distributorship of these brands. With Tesla also planning to enter the KSA market in a year or two, the companies can establish itself as a credible dealer and partner with electric car brands to help the clients purchase and deliver to their various locations. Electric car franchise and reselling business have bright future since the number of LEVs increases.

Future Analysis and Projections for LEVs in Saudi Arabia

KSA could witness an LEV penetration between 5-7% by 2025. The neutral case scenario predicts KSA will build a framework like UAE such as free charging stations, discounted car registrations, toll exemptions, and other perks to incentivize people to give up their traditional cars for EVs. However, barriers such as TCO parity, high battery cost & infrastructure challenges such as mass deployment of charging stations in public area may slow down the adoption rate. Introduction of new model vehicles to provide greater choice along with promotion of greater levels of understanding of the capabilities, benefits and imperatives for adopting EVs will accelerate adoption.

Key Topics Covered in the Report

Overview of Global EV Market
Genesis and Overview of KSA LEV Market
Ecosystem of Major Entities in Saudi Arabia LEV market
Charging Infrastructure for LEV Market in Saudi Arabia
Overview of KSA Last-Mile Delivery Market
Number of Orders/Shipments in KSA Last-Mile Delivery Market
Number of Fleets Deployed for Last Mile Delivery
Business Side Potential for LEVs in KSA CEP Industry including E-commerce Landscape in KSA
Business Side Potential for LEVs in KSA Grocery Delivery Market
Business Side Potential for LEVs in KSA Food Delivery Market
Regulatory Scenario and Framework in Saudi Arabia LEV Market
Opinions of Industry Experts regarding adoption of LEVs
Difference in EV costs compared to ICE vehicles- Cost Benefit Analysis
Viable Supply Chain Model for Adoption and Supplying LEVs in KSA
Current Landscape of LEV Offering in KSA
Major Deals/Transactions for LEVs in KSA
Impact of COVID 19 on EV sales
Future Analysis and Projections for LEVs in Saudi Arabia
Opportunity Analysis of an LEV in Last Mile Delivery
Case Studies for LEV Last-Mile Delivery
Recommendations / Success Factors
Research Methodology
Appendix

Products

Key Target Audience

LEV Manufacturers
LEV Dealers/Distributors
Courier and Parcel Companies
E-Commerce Companies
Grocery Delivery Companies
Food Delivery Companies

Time Period Captured in the Report:

Historical Period: 2015-2020
Forecast Period: 2020–2030

Companies

Key Segments Covered in KSA LEV Market

Business Side Potential for LEVs in KSA CEP Industry

CEP Market Size
Total Number of Courier Shipments
KSA E-Commerce Landscape
E-Commerce Market Major Categories
Total Number of E-Commerce Orders
Total Number of Vehicles Deployed
Competition Scenario in KSA CEP Market
Future Projections Towards Penetration of LEVs in Courier Segment

Business Side Potential for LEVs in KSA Grocery Delivery Market

KSA Online Grocery Ecosystem
KSA Online Grocery Market Size
KSA Online Grocery Market Concentration
KSA Online Grocery Market Segmentations
Total Number of Orders
Total Number of Vehicles Deployed
Competition Scenario in KSA Grocery Delivery Market
Future Projections Towards Penetration of LEVs in Grocery Delivery Segment

Business Side Potential for LEVs in KSA Food Delivery Market

Landscape of Food Delivery Companies in Saudi Arabia
KSA Online Food Delivery Market Size
Total Number of Orders
Total Number of Vehicles Deployed
Competition Scenario in KSA Food Delivery Market
Future Projections Towards Penetration of LEVs in Food Delivery Segment

Companies Covered:

EV Manufacturers

Tesla
BMW
Chevrolet
Renault
Hyundai
Nissan

CEP Industry

Saudi Post
Naquel Express
SMSA Express
DHL
Aramex
UPS
FedEx/TNT

Grocery Delivery Companies

Nana Direct
Zadfresh
Danube
Carrefour
Qareeb

Food Delivery Companies

Hungerstation
Careem
Jahez
Talabat
Mrsool

1. Executive Summary

2. Overview of Global EV Market

2.1 What is the size of the global EV Phenomenon?

2.2 Current infrastructure status of EVs in various countries

2.3 Overview on international policies that favor EV adoption

2.4 EV Market Attractiveness Result Matrix

2.5 Stakeholders Overview and Interests in EVs

2.6 Recent announcements from leading companies are supportive of the EV phenomenon

3. Genesis and Overview of KSA EV Market Over

3.1 A paradigm shift towards sustainable mobility requirement in KSA

3.2 Ecosystem of Major Entities in Saudi Arabia LEV market (Supply Side and Demand Side)

3.3 Charging Infrastructure for EV Market in Saudi Arabia

3.4 Development of Masterplans in Saudi Arabia to Develop E-Mobility Solutions

3.5 What are the main drivers for EV adoption in KSA?

4. Last-Mile Delivery Industry in KSA

4.1 Overview of KSA Last-Mile Delivery Market (Priority Segments for LEVs)

4.2 Number of Fleets currently deployed for Last Mile Delivery

4.3 Pain Points in Current Last Mile Delivery Ecosystem

4.4 Whitespace in Last Mile Delivery Market

4.5 Case Study: Saee and Aramex

4.6 Expected EV Penetration in KSA Last Mile Delivery

4.7 The Adoption of EVs in Passenger Cars and Commercial Vehicles

4.8 The Adoption of EVs in Public Transportation in KSA

5. Business Side Potential for LEVs in KSA CEP Industry

5.1 Landscape of Courier Companies in Saudi Arabia with Respect to Genesis and Business Cycle

5.2 Total number of Courier Shipments in Saudi Arabia, 2015-2030

5.3 E-commerce Landscape in KSA (Number of Orders, Major Categories and Fleet Management

5.4 Total Number of Vehicles Deployed, 2015-2030

5.5 Fleet Metrics in Courier Business with Respect to Average Distance Travelled, Fuel Cost Per Day, Number of Couriers Delivered Per Day, Maintenance Charges,

5.6 Working Hours Per Day, Ideal load capacity & volume capacity of Cargo box, Type of Vehicle Split and Others

5.7 Cross Comparison of Major Organized Courier Companies on the Basis of Inception year, Number of Shipments, Number of Fleets, Fleet Composition, Fleet

5.8 Ownership Split and Others

5.9 Future Projections Towards Penetration of LEVs in Courier Segment

5.10 LEVs Potential Value Addition to E-Commerce Providers

6. Business Side Potential for LEVs in KSA Grocery Delivery Industry

6.1 KSA Online Grocery Ecosystem

6.2 Landscape of KSA Online Grocery Industry : Life Cycle and Supply Infrastructure

6.3 Where is the Online Grocery Market Concentrated in KSA?

6.4 KSA Online Grocery Market Size on the basis of GMV, Annual Orders & Average Order Size, 2017-2030

6.5 KSA Online Grocery Market Segmentation By Delivery Time, Product Category and Mode of Payment basis Number of Orders, 2019

6.6 Total Number of Vehicles Deployed, 2017-2030 and Industry Unit Economics, 2020

6.7 Impact of Covid-19 (Impact on KPIs, Monthly Orders, Impact on Consumer Behavior, What companies did to meet Excess Demand?)

6.8 Competition Scenario and Industry Unit Matrix (Market Share on the basis of GMV)

6.9 Cross Comparison Matrix of Major Players (Year of Establishment, Business Model, Average Number of Orders, Number of Partner Grocery Stores/Supermarkets &

6.10 Hypermarkets, Delivery Fleet, Delivery Charges, Delivery Time, Cancellation Rate, Product Listings, & Employees

6.11 Future Projections Towards Penetration of LEVs in Grocery Delivery Segment

7. Business Side Potential for LEVs in KSA Food Delivery Industry

7.1 Landscape of Food Delivery Companies in Saudi Arabia with Respect to Genesis and Business Cycle

7.2 KSA Online Food Delivery Market Size on the basis of GMV, and Total number of Food Delivery Shipments

7.3 Total Number of Vehicles Deployed, 2017-2030

7.4 Fleet Metrics in Food Delivery Business with Respect to Average Distance Travelled, Fuel Cost Per Day, Number of Orders Delivered Per Day, Maintenance Charges,

7.5 Working Hours Per Day, Ideal load capacity & volume capacity of Cargo box, Type of Vehicle Split and Others

7.6 Cross Comparison of Major Organized Food Delivery Companies on the Basis of Inception year, Number of Shipments, Number of Fleets, Business Growth, Fleet

7.7 Composition, Fleet Ownership Split, Future Plans and Others

7.8 Future Projections Towards Penetration of LEVs in Food Delivery Segment

8. Competition Scenario for LEVs Manufacturers in KSA and GCC Market

8.1 Viable Supply Chain Model for Adoption and Supplying LEVs in KSA

8.2 Timeline of Strategic Global OEM targeting EVs

8.3 Current Landscape of LEV Offering in KSA

8.4 Offering of EVs by Major companies in GCC Market

8.5 Major Deals/Transactions for LEVs in KSA

9. End User Experience and Cost Benefits

9.1 Difference in EV costs compared to ICE vehicles- Cost Benefit Analysis

9.2 What are the main drivers for EV adoption in KSA?

9.3 Regulatory Scenario and Framework in Saudi Arabia LEV Market

9.4 EV Infrastructure Availability in KSA in terms of EV Adoption

9.5 Consumer Expectations of an EV in terms of Awareness, Willingness to buy, Cost, Range, Model, Perceived Advantages and Disadvantages of an EV

9.6 Opportunity where Individual LEV owners are ready to provide vehicle for LMD

9.7 Opinions of Industry Experts regarding adoption of LEVs

9.8 Challenges and Catalysts Associated Towards the Adoption of LEVs along with Proposed Solutions

10. Likely Impact of Covid-19 on the Adoption of LEVs

10.1 Global Impact of COVID 19 on Global EV sales

10.2 Impact t of COVID 19 across KSA and Post Covid KSA Automotive Industry Outlook

11. Future Analysis and Projections for LEVs in Saudi Arabia

11.1 Scenario Analysis for the Adoption of LEVs in Saudi Arabia (Best Case/Neutral Case and Worst Case Scenarios)

11.2 Industry Expectations From Self And Government

11.3 Opportunity Analysis of an LEV in Last Mile Delivery (Application Segment, Use Cases, Penetration Year and Potential Opportunities)

12. Case Studies

12.1 Ride-hailing: Ola

12.2 Employee Transport and Ride-hailing: Uber, EY and eee-Taxi

12.3 Ride-hailing: SmartE

12.4 Deliveries: Jubilant FoodWorks (Domino’s Pizza)

12.5 Battery Swapping Stations: Sun Mobility

12.6 Electric Mobility: Euler Motors (India)

13. Analyst Recommendations

13.1 Positioning in the KSA LEV Industry- Our Take

13.2 Potential Business Framework to ALJ for E-mobility as a Service

14. Appendix

14.1 Research Methodology: Market Definitions, Abbreviations, Research Limitations and Future Conclusion

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