Middle East last mile delivery market report size, share, growth drivers, trends, opportunities & forecast 2025–2030

Middle East Last Mile Delivery Market Overview

• The Middle East Last Mile Delivery Market is valued at USD 3 billion, based on a five-year historical analysis. This growth is primarily driven by the rapid expansion of e-commerce, increasing urbanization, and the demand for faster delivery services. The surge in online shopping, particularly during the pandemic, has significantly boosted the need for efficient last-mile logistics solutions across the region. Recent trends highlight the adoption of advanced technologies such as AI-powered route optimization, real-time tracking, and the integration of electric vehicles to improve delivery speed and sustainability .
• Key players in this market include the UAE, Saudi Arabia, and Egypt, which dominate due to their robust infrastructure, high internet penetration, and a growing consumer base. The UAE has established itself as a logistics hub, leveraging its strategic location and investment in smart city logistics. Saudi Arabia’s Vision 2030 initiative continues to enhance the logistics sector, with significant investments in infrastructure, digitalization, and regulatory reforms supporting e-commerce and last-mile delivery growth .
• In 2023, the UAE government implemented regulations to enhance the last-mile delivery sector, focusing on sustainability and efficiency. This includes a mandate for delivery companies to adopt eco-friendly vehicles, aiming for a 30% reduction in carbon emissions by 2030. The regulatory framework is outlined in “The UAE National Sustainable Transport Policy, 2023” issued by the Ministry of Energy and Infrastructure, which requires logistics providers to transition to electric and low-emission vehicles, comply with periodic emissions reporting, and meet green fleet standards for licensing .

Middle East Last Mile Delivery Market Segmentation

By Type:The last mile delivery market is segmented into various types, including B2C Delivery, B2B Delivery, C2C Delivery, Same-Day Delivery, Scheduled Delivery, Express Delivery, and Others. Among these, B2C Delivery is the most dominant segment, driven by the surge in online shopping and consumer demand for quick and reliable delivery services. The convenience of home delivery has led to increased investments in technology and infrastructure to support this segment. B2C accounts for the largest share, as e-commerce platforms prioritize customer experience and rapid fulfillment .

By End-User:The end-user segmentation includes E-Commerce, Retail and FMCG, Healthcare, Mails and Packages, Food and Beverage, Consumer Electronics, and Others. The E-Commerce segment is the leading end-user, fueled by the increasing number of online shoppers and the growing trend of home delivery services. Retail and FMCG also contribute significantly, as consumers prefer the convenience of having products delivered directly to their homes. The healthcare segment is expanding due to rising demand for timely delivery of medical supplies and pharmaceuticals .

Middle East Last Mile Delivery Market Competitive Landscape

The Middle East Last Mile Delivery Market is characterized by a dynamic mix of regional and international players. Leading participants such as Aramex, DHL Express, FedEx, UPS, Zajil Express, Fetchr, Talabat, Noon, Careem NOW, Jumia, Q-Express, PostaPlus, MENA Logistics, TCS, Lalamove, Marsool, HungerStation, Tawseel, Carriage, Mrsool contribute to innovation, geographic expansion, and service delivery in this space.

Middle East Last Mile Delivery Market Industry Analysis

Growth Drivers

• Increasing E-commerce Penetration:The Middle East's e-commerce sector is projected to reach $30 billion, driven by a 15% annual growth rate. This surge is fueled by a growing consumer base, with over 80% of the population shopping online. The rise in digital payment solutions and mobile commerce is further enhancing accessibility, making last mile delivery services essential for fulfilling consumer expectations for quick and reliable delivery.
• Urbanization and Population Growth:The urban population in the Middle East is expected to increase by 4% annually, reaching approximately 210 million. This rapid urbanization leads to higher demand for efficient last mile delivery services, as densely populated areas require optimized logistics solutions. Additionally, the growing middle class, projected to reach 55 million, is driving consumption patterns that favor convenience and speed in delivery services.
• Technological Advancements in Logistics:The logistics sector in the Middle East is witnessing significant technological advancements, with investments in automation and AI expected to exceed $2 billion. These innovations enhance route optimization, inventory management, and customer service, leading to improved efficiency in last mile delivery. The integration of real-time tracking systems is also becoming standard, allowing consumers to monitor their deliveries closely, thus increasing satisfaction.

Market Challenges

• Infrastructure Limitations:Despite growth, the Middle East faces significant infrastructure challenges, with over 35% of urban areas lacking adequate road networks. This inadequacy hampers efficient last mile delivery, leading to delays and increased operational costs. The World Bank estimates that improving infrastructure could reduce logistics costs by up to 15%, highlighting the need for investment in transport and logistics infrastructure to support market growth.
• High Operational Costs:The operational costs for last mile delivery in the Middle East are among the highest globally, averaging $1.75 per delivery. Factors contributing to these costs include fuel prices, labor expenses, and vehicle maintenance. With fuel prices projected to rise by 6%, companies must find innovative solutions to manage these costs while maintaining service quality, posing a significant challenge to profitability.

Middle East Last Mile Delivery Market Future Outlook

The future of the Middle East last mile delivery market appears promising, driven by technological innovations and evolving consumer preferences. As urbanization continues, logistics companies are likely to invest in smart delivery solutions, including AI and automation, to enhance efficiency. Additionally, the increasing focus on sustainability will push companies to adopt eco-friendly practices, such as electric vehicles and green packaging, aligning with global trends towards environmental responsibility and consumer demand for sustainable options.

Market Opportunities

• Expansion of Delivery Networks:There is a significant opportunity for logistics companies to expand their delivery networks, particularly in underserved regions. By establishing localized hubs, companies can reduce delivery times and costs, catering to the growing demand for fast and reliable services. This expansion could potentially increase market share and customer loyalty in a competitive landscape.
• Adoption of Green Delivery Solutions:The shift towards sustainable delivery practices presents a lucrative opportunity. Companies that invest in electric vehicles and eco-friendly packaging can differentiate themselves in the market. With consumers increasingly prioritizing sustainability, businesses adopting green solutions may not only enhance their brand image but also attract a broader customer base, driving growth in the last mile delivery sector.