The still small but rapidly growing online ordering market for groceries is an example of how the digital means of smartphones are penetrating every market. In Dubai you could order all your fresh food from almost every shop. Either through a delivery service or through one of the 7 most popular grocery apps. The general trend of ordering just where you are, without getting out of your car, is also affecting the E-Groceries market. Most residents of the UAE just do not have enough time to go shopping at the mall daily. Compared to the rest of the eCommerce market in the region there is even more potential for growth because of an underdeveloped online market of groceries.
Today the E-Groceries market in the GCC and Egypt region is worth 200 million US Dollar. It is accounting for a mere 2.4 percent of the whole eCommerce market. The interesting aspect of this market is its growth rate. The statistics show a doubling of market size almost every year. Global management consultancy firm Bain & Company has seen a growth of more than 250 percent in the past three years in the MENA region. A lot of startups are raising money in this sector, and big groceries players increase their effort to improve the digital experience.
To take the opportunity the E-Groceries market in the Middle East is offering, there are still some challenges to overcome. These challenges include logistics, packaging, and customer preferences. These challenges are not very different from other eCommerce sectors. Customers are used to quick deliveries, and they are craving for even faster delivery times continuously. In times where the whole family is very busy working, and with more and more women also taking a full-time job, there is less and less time left to go to the malls. Despite the shopping experience being an enjoyable and fun thing to do, often there is no time, especially when the shopping is just for regular basics. When the real-life shopping experience is missing the packaging of the goods is a distinguishing point. So, the merchant can show signs of quality and caring even before unpacking.
Interesting is also the future outlook for E-Groceries. A disruptive change could affect the more than 100 years old tradition of full-service grocery stores. The concept of shopping carts and checkout lanes seems outdated to many young people. They’re used to check the products online and get their delivery with a simple click. But not all qualities of a product could be checked via a picture. As buying fruits and vegetables creates the greatest suspicions of consumers regarding quality and freshness, they prefer to handpick their groceries.
Here an experience center that shows the standardized quality already present will help to build trust. A fusion between traditional brick and mortar enterprises and E-Groceries shows big potential. With buildings close to the consumer, these big groceries could change their appearance from a huge display of products room to a warehouse and a small quality testing center for the consumers.