Saudi Arabia Courier, Express, and Parcel (CEP) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The market for Courier, Express, and Parcel (CEP) in Saudi Arabia is estimated to be valued at more than USD 970 million and is estimated to grow at a CAGR of more than 6.5% during the forecast period. Due to the impact of Covid-19, the market is expected to fall to USD 823 million in 2020.
Key HighlightsIn the B2B segment, with the growing emphasis on digitization and in order to compete at a global level, the firms are being driven toward greater adoption of e-commerce, which is helping them to expand and reach new customers. In Saudi Arabia, the CEP market is dominated by B2B deliveries with more than 70% share. The key customers of CEP companies in the B2B segment include retailers, manufacturers, and other companies. The economic growth and development of trade and commerce in the Kingdom are expected to drive the growth of the B2B CEP market through the forecast period.
The fast growth in e-commerce has been resulting in increasing share of B2C in the overall CEP market. At the same time, e-commerce has provided the CEP companies challenges, such as route and resource planning for fast delivery, technology and IT infrastructure, automation, etc.
The e-commerce segment accounts for the majority of the B2C CEP market. The banking and financial services industry and other document deliveries from education, telecom, or government and public services sectors also contribute significantly to the B2C segment apart from e-commerce.
The e-commerce logistics in the country is at a nascent stage when compared to many other mature markets. Going forward, more business models are expected to evolve involving outsourcing and focus on specific parts of the value chain, such as first mile, long haul, and last mile. The majority of the customers of SMEs, around two-thirds of all customers are individuals. This indicates the large addressable market for B2C CEP companies from these SMEs.
Healthcare Logistics - a Sector of Potential OpportunityThe population of Saudi Arabia is rapidly growing. By 2030, the population is expected to reach nearly 40 million. The demographic profile of the Kingdom is quickly changing. By 2030, those over the age of 50 are expected to increase to approximately 12.5 million.
As healthcare spending is increasing, the logistics associated with this spend are costly and require specialized solutions for which express and parcel delivery providers and other logistics companies are competing to provide.
With increasing healthcare spending, the optimization of the supply chain will be imperative for manufacturers/service providers. Saudi Arabia is investing heavily in the healthcare sector and is building several medical cities.
Healthcare services and training have become top priorities for the Saudi government, and it is committed to invest in optimizing the local pharmaceutical industry and to create a robust healthcare infrastructure, which calls for improved cold chain management and perfect last-mile delivery.
Given that the sector is growing fast and the number of companies in Saudi that are specialized in this area of healthcare logistics is limited, it represents a potential opportunity for the new entrants to the market, as well as for existing players.
BookDr. is a leading digital healthcare app that provides same-day ePharma delivery and also offers home lab visits. It supports the supply of its integrated logistic services through its partnership with SMSA Express.
Competitive LandscapeThe Courier, Express, And Parcel (CEP) market in Saudi Arabia is fairly consolidated in nature. The top five players in both the domestic and international legs dominate the market accounting for more than 65-70% of the market share. SMSA Express, DHL, Aramex, and Saudi Post are the top players in the domestic CEP market while DHL and Aramex have very high market shares in the international CEP market.
The digitally enabled logistics startups are rising in the country in order to capitalize on the high growth of the e-commerce sector and to increase the operational efficiency in the package delivery. For instance, Fetchr has entered the Saudi market with an app-driven solution. Also, the companies that are operating in the country are focusing on improving their digital capabilities.
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