Saudi Arabia’s online grocery delivery market to cross $173.3bln by 2025
Online grocery delivery penetration, basis users, is expected to reach 20% by the end of 2025
Saudi Arabia’s online grocery delivery market will be valued at SR650 billion ($173.3 billion) by the end of 2025, registering a CAGR of 23.4% between 2019 and 2025.
The market will witness growth owing to rise in investment in marketplace companies and innovative strategies adopted by service providers, according to a report by Ken Research titled ‘KSA Online Grocery Delivery Market Outlook to 2025- Driven by Regional Changing Shopping Habits of Consumers and Expansion of Local and International Players in the Kingdom’.
The online grocery delivery penetration, basis users, is expected to reach 20% by the end of 2025.
The demand for expresses delivery is expected to grow at a CAGR of 32% between 2019 and 2025. The charges for express delivery are expected to decline by the end of 2025.
Technological developments such as drone deliveries, warehouse automation and voice ordering are anticipated to be adopted by service providers to enable quicker deliveries.
Companies aim to establish themselves as one-stop solution for all day to day needs of the customer. They have been focusing on diversifying their product portfolio from food, beverages, fruits, vegetables to household supplies, beauty and health, medicines, toys, food and delivery of other daily needs of a family.
Due to Covid-19 outbreak, people avoided crowded places and turned to online grocery shopping amid escalating fears. Major product categories witnessed growth between 20-40% during the pandemic such as water, personal hygiene, home cleaning, fruits and vegetables.
March and April was marked by a huge gap between demand and supply as no one was prepared for this situation in advance therefore companies faced logistical challenges.
Average delivery time also increased from one to three days to one to two weeks. In order to fulfil the increased demand, companies expanded their delivery fleet by partnering with third party delivery companies to manage last-mile logistics.
It is anticipated that companies would be expanding tie ups with suppliers and grocery stores, food delivery companies, e-wallet companies to leverage their capabilities to fulfil customer orders.
Companies are also expected to establish dark stores across the kingdom to ensure quicker and efficient logistics management.