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
July 2020
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About the Report
About the Report
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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 Segments Covered:
- By Region
Central
Western
Eastern
Southern
Northern
- By Product Category
Food & Beverages
Fresh Food
Household Supplies
Beauty and Health
Others
- By Mode of Payment
Cash on Delivery
Pre-Delivery Online Payment
Card on Delivery
- By Delivery
In a Specific Time Period (Same Day or Next Day)
Express Delivery (30 minutes-2 hours)
Other (2-3 Days or More)
- By Age Group
18-24 years
25-34 years
35-44 years
45+ years
- By Gender
Male
Gender
Companies Covered
Nana Direct
Zadfresh
Carrefour
Danube
Qareeb.com
Key Target Audience
Online Grocery Delivery Companies
Supermarkets & Hypermarkets
E-commerce Companies
Food Delivery Companies
Investors and Venture Capitalists
Logistics Companies
Government Organization catering to the FMCG Industry
Time Period Captured in the Report:-
Historical Period: 2017–2019
Forecast Period: 2020-2025
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
Products
Products
Key Segments Covered:
- By Region
Central
Western
Eastern
Southern
Northern
- By Product Category
Food & Beverages
Fresh Food
Household Supplies
Beauty and Health
Others
- By Mode of Payment
Cash on Delivery
Pre-Delivery Online Payment
Card on Delivery
- By Delivery
In a Specific Time Period (Same Day or Next Day)
Express Delivery (30 minutes-2 hours)
Other (2-3 Days or More)
- By Age Group
18-24 years
25-34 years
35-44 years
45+ years
- By Gender
Male
Gender
Key Target Audience
Online Grocery Delivery Companies
Supermarkets & Hypermarkets
E-commerce Companies
Food Delivery Companies
Investors and Venture Capitalists
Logistics Companies
Government Organization catering to the FMCG Industry
Time Period Captured in the Report:-
Historical Period: 2017–2019
Forecast Period: 2020-2025
Companies
Companies Covered
Nana Direct
Zadfresh
Carrefour
Danube
Qareeb.com
Table of Contents
Table of Contents
1. Executive Summary
Executive Summary- How is Online Grocery Market Positioned in KSA?
2. Need and Opportunity
Brick and Mortar v/s Online Grocery Shopping
Why Online Grocery is the Way Forward
Target Addressable Market
3. Supply Scenario
KSA Online Grocery Timeline
KSA Online Grocery Industry Life Cycle
KSA Online Grocery Ecosystem
How is Online Grocery Supply Positioned in KSA?
Challenges Faced by Online Grocery Delivery Companies
4. Operating Models across KSA Online Grocery Market
Operating Model: Marketplace and Inventory Model
Process of On Boarding a Grocery Store
Role & Responsibilities of Company and Partner Grocery Store
Operating Model: Omnichannel Model
Cross Comparison of Operating Models (Marketplace and Omnichannel) on the basis of Delivery Time, Inventory, Gross Margin, Product Assortment, Players, Revenue Streams, Advantages & Disadvantages
How Companies Manage Logistics?
Gaps & Possible Solutions of Managing Logistics
5. Demand Scenario
KSA Online Grocery Market Size on the basis of GMV, Annual Orders & Average Order Size, 2017-2019
KSA Online Grocery Market Segmentation By Delivery Time, Product Category and Mode of Payment basis Number of Orders, 2019
Where is the Online Grocery Market Concentrated in KSA?
What Does the Customer Prefers?
Factors Influencing Customer Behavior
Seasonality Trends
Impact of Covid-19 (Impact on KPIs, Monthly Orders, Impact on Consumer Behavior, What companies did to meet Excess Demand
6. Industry Analysis
Where does KSA Stands in Comparison to Other Mature Markets (KSA, UAE,UK, India & US)?
SWOT Analysis
Technologies Facilitating Online Grocery Delivery Industry
Upcoming Technologies in Online Grocery Delivery Industry
Features of a Grocery Delivery App
7. Investment Analysis
Investment Activities (Company, Investors, Total Funding Amount, Funding Status, Last Funding Type and Latest Funding)
Investment Map
8. Competitive Landscape in KSA Online Grocery Market
Competition Scenario and Industry Unit Matrix
Cross Comparison Matrix of of Major Players (Year of Establishment, Business Model, Number of Partner Grocery Stores/Supermarkets & Hypermarkets, Delivery Fleet, Delivery Charges, Delivery Time, Cancellation Rate, Product Listings, & Employees)
Financial Matrix of Major Players (Approximate Annual Orders, Market Share on the basis of Number of Orders, Market Share on the basis of GMV)
Strengths & Weakness of Major Players (Nana, Zad, Carrefour, Danube and Qareeb)
Company Profiles (Nana, Zad, Carrefour, Danube and Qareeb) (Overview, Product Category, Business Model, Business Strategies, USP, Future Plans, Recent Developments)
9. Future Landscape of KSA Online Grocery Delivery Market
KSA Online Grocery Delivery Market Future Outlook to 2025 on the basis of GMV, Annual Orders and Average Order Size
KSA Online Grocery Market
Segmentation by Delivery Time, Product Category, Region and Mode of Payment
Future Market Trends and Way Forward
10. Case Study & Analyst Recommendations
How Can Companies Reduce Delivery Time and Delivery Cost?
Key Adoption Points(Personalized Consumer Experience, Introduce Private Labels to Increase Margins, Wallet Based Automated System, Preferable Service Locations, Achieving Operational Efficiency , Adopting Artificial Intelligence in Day to Day Operations and Expanding Partnerships)
How can Companies Promote themselves?
Why and How Subscription & Micro-Delivery Model can be Implemented?
11. Industry Speak
Interview with Asim Jamil, CEO at Qareeb.com
12. Appendix
Research Methodology
Disclaimer
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