KSA Online Grocery Delivery Market Outlook to 2025

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The report titled “KSA Online Grocery Delivery Market Outlook to 2025- Driven by Changing Shopping Habits of Consumers and  Regional Expansion of Local & International Players in the Kingdom" provides a comprehensive analysis of Online Grocery Delivery Market in KSA. The report covers various aspects including the current online grocery delivery scenario in the Kingdom, need & opportunities describing the target addressable market, addressable gap in the market, and possible solutions.

It also covers current supply and demand in the region, detailed working of the marketplace and omnichannel operating model, trends, developments, challenges, seasonality trends, current & upcoming technologies facilitating online grocery delivery industry, revenue streams and marketing strategies driving the industry.  It also provides a detailed analysis of the impact of COVID-19 on the market. It gives a detailed explanation of competitive scenarios including cross-comparison between major players, SWOT, and detailed company profiles of major players and concluding with future scope and analyst recommendations.

Market Overview and Demand- Supply Scenario

KSA 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 2016 and 2018.

Smartphone users aged between 25 and 44, is considered an influential customer base for online grocery shopping. The industry is currently positioned in a growth stage registering a double-digit growth rate close to 44% between 2017 and 2019.

Changing consumer preferences, high smartphone penetration, and regional expansion of local and international players led to the growth of online grocery services in the Kingdom.  Companies have expanded their product portfolios from food & beverages to household supplies, baby food, fresh food, fish & meat, and other product categories.

Demand by Region (Central, Western, Eastern, Southern, and Northern)

Central and Western Saudi Arabia mapped as major regions based on the demand for online grocery services in the Kingdom. Riyadh, Makkah, Medina mapped as major cities on the basis of demand for online grocery services in Central and Western Region. This was followed by demand in Eastern, Southern, and Northern Regions.  Dammam, Asir, and Ha'il considered as evolving regions in terms of demand and supply for online grocery services.

Demand by Product Category (Food & Beverages, Fresh Food, Household Supplies, Beauty and Health, and Others):Food & Beverages mapped as the most demanded product category among the customers in the Kingdom. This was followed by fresh food, household supplies, beauty and health, and other product categories. Most demanded products have been packaged food, canned food, water, bakery items, cleaning products, and baby food.

Demand by Mode of Payment (Cash on Delivery, Pre Delivery Online Payment and Card on Delivery): Cash is the most preferred mode of payment as customers are skeptical about the security of their financial details. They believe their bank details are not secure if they use online mode of payment. This was followed by pre-delivery online payment and card on delivery.

Demand by Delivery (In a Specific Time Period (Same Day or Next Day), Express Delivery (30 minutes-2 hours) and other (2-3 Days or More)): Customers prefer their orders to be fulfilled within the specific time slot promised by the online grocery service provider. Large order size often takes more preparation time thereby leading to delay in deliveries. Companies charge between SAR 10-20 for delivering groceries to the customer.

Competitive Landscape

The industry is concentrated with the presence of 8-10 players operating across the marketplace omnichannel model. Delivery Cost, Delivery Time, App Interface, Discounts & Offers, Return Policy, Ease of Payment have been major factors influencing customer behavior. Major players include Nana Direct, Zad, Carrefour, Danube, and Qareeb.com. Companies with large product assortment, wide regional presence, and express delivery are identified as clear leaders in the industry.

Impact of COVID-19

Due to COVID-19 Outbreak, people avoided crowded places and turned to online grocery shopping amid escalating fears.  Major Product Categories witnessed growth between 25-35% during the pandemic such as water, personal hygiene, home cleaning, fruits & vegetables. Companies who delivered in one to two days had a waiting period of one to two weeks.

Future Outlook and Projection

The demand is expected to grow with a CAGR of 23% on the basis of GMV between 2019 and 2025. Companies are anticipated to focus on offering a personalized shopping experience to the customer. The demand is expected to be driven by upcoming technologies such as Drone Delivery, Warehouse Automation, Voice Ordering, and others. Market consolidation is expected in the future as players with the heavy financial backing and better brand value will acquire small players

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
• Process of On-Boarding a Grocery Store
• Role & Responsibilities of Company and Partner Grocery Store
• Gaps & Possible Solutions for Managing Logistics
• Factors Influencing Customer Behavior
• Seasonality Trends
• Features of a Grocery Delivery Application
• Technologies Facilitating Online Grocery Delivery Industry
• Upcoming Technologies in Online Grocery Delivery Industry
• Future Market Trends and Way Forward
• Marketing Strategies