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

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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