Middle East & Africa Online Grocery Market Outlook, 2028

Middle East & Africa Online Grocery Market Outlook, 2028

The online groceries market in the Middle East and Africa (MEA) region has been growing steadily in recent years, driven by factors such as increasing internet penetration, rising disposable incomes, and changing consumer preferences. As the world becomes digital, the online groceries market in MEA is expected to continue its growth trajectory, presenting a significant opportunity for both local and international players. In the last few years, grocery delivery apps have seen a sudden increase in the number of online grocery orders and a sudden increase in revenue. Large and small retailers alike were using grocery delivery platforms to reach out to people stuck at home. The online grocery delivery market has grown because more people in the area have smartphones and more people have access to the internet. Changes in the region's population, like the growing number of young people and the large number of immigrants in big cities like Dubai, Abu Dhabi, and Johannesburg, have also led to a rise in the number of people who want online grocery delivery services. Online grocery shopping has many advantages over going to a store in person, like not having to spend time or money getting there or waiting in long lines to pay. It also offers the additional benefit of instinctive buying from home comfort. A population aged between 25 and 44 is considered the most influential consumer base in the Middle East and Africa, opting for online grocery delivery over conventional ones. Quick commerce is also growing at a noteworthy pace in the region. The pandemic fuelled the growth of quick commerce in the Middle East and Africa. Various market players developed multiple ideas to attract customers during and after the COVID-19 pandemic. The companies compete for the quickest delivery in the least amount of time, as Talabat is known to deliver in less than 20 minutes. Similarly, RabbitMart, or Rabbit, a delivery service from Egypt, and Deliveroo from the UAE deliver groceries to the doorstep within 15 to 20 minutes of ordering. These factors have created multiple growth opportunities for the segment in this region.

According to the research report, “Middle East & Africa Online Groceries Market Outlook, 2028” published by Bonafide Research, the market is anticipated to reach market size of USD 21.34 Billion by 2028. High internet penetration, growing working population, and an augmenting the number of single families have led to the growth of e-grocery services around the Middle East & Africa. The number of companies proposing grocery delivery services in the Middle East & Africa has augmented over the years. Companies have enflamed their product portfolios from food & beverages to household supplies, fresh food, baby food, fish & meat, and numerous other product categories. Dubai and Abu Dhabi mapped as foremost cities based on demand and supply of online grocery services. This is mainly owing to the concentration of population in these areas. Working professionals, who are the foremost end-users of online grocery delivery services, are concentrated across Dubai and Abu Dhabi. Companies are predicted to focus on enlarging tie ups with suppliers & grocery stores to fulfil consumer orders. The requirement is projected to be propelled by upcoming technologies such as Drone Delivery, Warehouse Automation, Voice Ordering and others. Market consolidation is predicted in future as players with heavy financial backing and improved brand value will attain the small players. Therefore, it is predicted that during the near future the market of Middle East & Africa online grocery delivery will augment more proficiently around the region over the review period. The outbreak of COVID-19 had a positive impact on the market. The preference for online grocery delivery apps improved rapidly as people stayed at home to contain the spread of the on-going health crisis at that time. Grocery delivery applications became the saviour of people in trying times.

One of the key trends in the online groceries market in MEA is the rise of mobile-first platforms. As smartphone penetration continues to increase in the region, consumers are increasingly turning to mobile apps to order groceries online. This has led to the emergence of several mobile-first online grocery platforms, such as InstaShop and Nana, which offer easy-to-use apps and quick delivery times. Another trend in the MEA online groceries market is the growing demand for fresh and organic products. As consumers become more health-conscious and environmentally aware, there is a growing preference for fresh and organic groceries. This has led to the emergence of several online platforms that specialize in fresh and organic products, such as Kibsons in the UAE and The Farm in Egypt. Religion plays a significant role in the lives of many people in the MEA region, and it can impact their buying habits. For example, during the holy month of Ramadan, which is observed by Muslims, many online grocery platforms offer special deals and promotions on items such as dates and other traditional Ramadan foods. Additionally, some online platforms may choose to suspend or reduce delivery services during religious holidays and observances. Family is highly valued in the MEA region, and this can influence online grocery buying patterns. For example, many households prefer to buy groceries in bulk, which can be more cost-effective and convenient. As a result, some online grocery platforms in the region offer bulk-buying options and discounts on larger orders. Based on delivery type, home delivery segment is expected to lead the market by 2028.

The MEA region is known for its diverse cuisine, and this can impact online grocery sales. Many online grocery platforms offer a wide range of products that cater to local cuisine preferences, such as halal meat and spices used in Middle Eastern dishes. Additionally, some platforms may partner with local restaurants and chefs to offer meal kits and recipe ideas, which can appeal to consumers looking to experiment with new flavours and cuisines. Language is another significant factor that can impact online grocery sales in the MEA region. Many consumers in the region prefer to use online platforms that are available in their native language, which can be a challenge for international players looking to expand their operations in the region. To overcome this challenge, some online grocery platforms have started offering multilingual support and translation services to cater to a wider customer base. The cultural impact on the online groceries market in the Middle East and Africa is significant, and players who can understand and cater to these cultural nuances are likely to succeed in the region. From observing religious holidays to catering to local cuisine preferences and offering multilingual support, there are several ways that online grocery platforms can cater to the diverse cultures and preferences of consumers in the MEA region. The retail delivery segment was the leading segment of the industry during the past few years. The segment accounted for a substantial market share in the region. Restaurants and customers prefer retail delivery via mobile apps as they take care of all aspects, such as delivering groceries, showing customers the extensive menu, and coming up with new ideas and offers to attract more customers, such as loyalty benefits and subscription programs.

United Arab Emirates is dominating the overall market in 2022. There are few players in the UAE’s online grocery space. Current players in this market include traditional brick-and-mortar retailers such as Carrefour and LuLu, who have started online stores in the past 24 months; pure play operators, such as BulkWhiz (a Dubai-based bulk grocery e-commerce platform that uses artificial intelligence to personalise consumers’ online grocery shopping experience); and online marketplaces. The high food spends and large basket sizes make the UAE an attractive market for e-groceries. Gaps in offline grocery shopping such as the tiresomeness of commute, long payment queues, and cost of instinct buying led to the introduction of e-grocery delivery around the UAE. Population aged between 25 and 44, is measured an influential consumer base for online grocery shopping. However, the Saudi Arabian government is helping its economy grow by encouraging investment in grocery stores and food delivery services. As a result, the grocery and food delivery service industries are flourishing in the country. Additionally, the surge in the acquisition of local food delivery companies by global players to expand their presence in the country has also helped the market grow. Based on the product type, staples & cooking essentials segment is dominating the market in 2022. Innovation and technology adoption are key drivers of growth in the MEA online groceries market. Retailers are investing in technologies such as artificial intelligence, machine learning, and big data analytics to improve their supply chain management, optimize delivery routes, and personalize the shopping experience for customers. Consumers in the MEA region are also becoming more environmentally conscious, and retailers are responding by adopting sustainable practices such as reducing plastic packaging, sourcing products from sustainable suppliers, and implementing energy-efficient delivery systems.

Recent Developments:
• In January 2023, Deliveroo UAE introduced a brand new in-app round-up feature. The feature is designed to help its customers donate to communities in need throughout the UAE sub-region. The feature has been introduced in collaboration with licensed, local non-profit organizations. The first partner to benefit from these donations is said to be the Emirates Red Crescent. The program is a portion of Deliveroo’s Full Life campaign, working to tackle the global food crisis.
• In November 2022, Amazon signed an agreement Wednesday to start an online grocery store in the United Arab Emirates (UAE). Amazon and Abu Dhabi’s Lulu Group will work together to develop an online grocery service that delivers products to customers in the UAE. The shopping will be done on Amazon’s Emirati website, according to a press release. Lulu Group operates supermarkets around the world, including in the UAE, Saudi Arabia, Qatar and Asian countries.
• In July 2022, considering the high level of competition in the market, the UAE’s grocery delivery and quick commerce application ‘Veppy.com’ is allowing retailers to register their products on its website before its commercial launch at the end of August 2022. This was done in anticipation that the site could be in business right after its launch. Veppy.com makes shopping very personalized by recommending products based on what customers have bought on the site before and what the app has learned from that.
• In the same year, Deliveroo UAE launched ‘Hop,’ a new rapid delivery service that only applies to grocery delivery. Deliveroo launched ""Hop"" in partnership with Choithrams in the UAE. The app is anticipated to help customers get groceries delivered in 15 minutes within a defined radius. The latest addition to Deliveroo’s offerings is anticipated to help the company’s growth during the forecast period.

Major Companies present in the market:
Amazon, Alibaba, Walmart Inc, Choithrams , Zomato, Jumia Technologies AG, LuLu Hypermarket, Spinneys ELIENIDAS

Considered in this report
• Geography: Middle East & Africa
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report
• Middle East & Africa Online Groceries market with its value and forecast along with its segments
• Country-wise Online Groceries market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Countries covered in the report:
• UAE
• Saudi Arabia
• South Africa

By Product Type
• Staples & Cooking Essentials
• Snacks & Beverages
• Breakfast & Dairy
• Fresh Produce
• Meat & Seafood
• Others

By Delivery Type
• Home delivery
• Click and collect

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the artificial lawn industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.