The eCommerce grocery delivery business in Saudi Arabia is at a growth stage after the COVID-19 pandemic hit the country. If we consider the sats from a survey conducted by Dubai-based Choueiri Group then over 55 percent of the population of Saudi Arabia purchases grocery items online in the month of April during the outbreak. This sudden change in consumer preference from offline to online grocery shopping gave the retails new opportunities to expand their business even during the pandemic. Many offline stores shifted online to start their online grocery delivery business and serve the increasing demand in a more organized way.

Grocery Market Overview of Marketing in Saudi Arabia

Saudi Arabia is among the leading countries to invest in eCommerce business with extremely high internet penetration as compared to other countries in the Middle East and the GCC. Saudi Arabia has approximately 20,813,695 Saudis using the internet, which is about a 64.7% penetration rate. 

The top players in the online grocery delivery business in Saudia Arabia reveal that the average sales have increased by 200% since COVID-19 hit the country. There is an increase in app installations by 400% in Saudi Arabia and the order value also grew 50%.

What was the Impact of the Pandemic on Online Grocery Delivery Business in Saudi Arabia?

As the government of Saudi Arabia ordered to shut down the public venues, with the majority of the population working remotely, and implemented the social distancing guidelines, offline grocery stores were unable to operate.

This leads to the shift in consumer behavior across all age groups, specifically in grocery shopping from offline to online. The most in-demand products were dairy products, fruits, vegetables, and bread. To fulfill the increase in the online demand for grocery items many offline stores shifted online to cope-up with the changing grocery shopping trends.

Online Grocery Delivery Companies in Saudi Arabia 

  1. Souq.com

Founded in 2005 by Ronaldo Mouchawar, Souq.com is one of the largest eCommerce platforms in the Arab. It is considered as a subsidiary of Amazon and currently acting as an Amazon arm in the Middle East Region.

2. Jumia

Jumia is another eCommerce shopping site that has almost all the daily use items available for the customers to shop in the region of Saudi Arabia. 

3. Nana Direct

Established in 2016, Nana Directs is an online grocery platform that provides doorstep deliveries of groceries and other household essentials to the residents in Saudi Arabia. 

Future of Online Grocery Delivery Business in Saudi Arabia

There is a massive change in the grocery shopping behavior of customers in Saudi Arabia. As per Kearney, a global management consulting firm, 95% of Saudia Arabia consumers have shifted their shopping habits in response to the lockdown during COVID-19. 

The CEO of Nana Direct believes that the sudden change in consumer behavior will sustain post-pandemic and leads to the rapid growth of e-grocery in Saudi Arabia.  

With people easily adapting to the online payment methods other than cash on delivery the market is now wide open for eCommerce start-up especially the online grocery delivery to enter the market. Being the most profitable eCommerce business during the COVID-19 pandemic the scope of growth is high among the region of the Middle East.

 Let’s Talk About the Challenges the Grocery Retailers are Facing in the Middle East Amid COVID-19

  1. Cash Flow Management

The cash flow management system helps the retailer to increase inventory, expand capacity, and penetrate new markets. Whereas in the current pandemic situation many retailers found it difficult to track cash flows as it requires access to high-quality financial reports and business intelligence dashboards. 

2. Safety Concerns

As a retailer, operating during the COVID-19 pandemic is more challenging as you need to be sure of the safety of both: your staff and the customers. 

3. Business Continuation

The offline grocery stores suffered a lot, especially the small vendors. The sudden change in the buying behavior of the customers from offline to online grocery stores due to COVID-19 made business continuity more challenging for offline grocery retails.

Even the online grocery delivery business face difficulty in managing the orders and operating during the COVID-19 pandemic situation with limited resources and a sudden spike in demand.

4. Change in Consumer Behaviour

The current pandemic situation has resulted in a change in consumer behavior. More preference is given to online grocery shopping based on the need and ease of shopping groceries during the pandemic situation. 

How to Overcome these Challenges?

  1. Focus more on Safety Features to build Trust Among the Customers

Customers are concerned about safety whether it’s an online or offline store. It’s the advanced safety features that you offer to your customers that will help you build trust and convenience. Different online payment methods, minimum direct contact with the delivery staff, sanitization, etc, are some basic features that the customers look for.

2. Digitalization can be one easy step to overcome this challenge

To survive in the grocery industry during and post-pandemic, retailers must create a digital landscape. Operating online with advanced features like contactless delivery and offering different online payment methods are essential to cope-up with the changing grocery shopping trends.

3. Demand Planning and Workforce Management

At the beginning of the pandemic, the online stores suffered from shortages of grocery products due to a sudden spike in demand. Retailers must understand which products are high in demand to manage their supply chain. 

On the other hand, online grocery retailers should focus more on effective workforce management.

4. Liquidity and Cash Reserves

This is a challenging situation for small retailers as managing the cash flow is a bit technical. Retailers should keep a close look at their current and predicted liquidity profile, i.e. how much they have and how much they will need in the coming days.

How to Launch Your Online Grocery Marketplace?

To start an online grocery business you require an in-depth knowledge of every aspect of the grocery industry and must-have features. You can opt for grocery delivery ready-made solutions like Growcer to launch your own online grocery delivery business. 

Growcer is a multi-vendor solution that empowers you to launch your grocery delivery business with the web (admin, buyers, sellers, and delivery staff) and mobile portals (buyers and delivery staff) along with all the must-have features.

For more insights related to the rise in eCommerce grocery delivery in the Middle East countries continue reading the following blog: https://www.fatbit.com/fab/covid-19-impact-on-online-grocery-business-and-shopping-behavior-in-gcc/ 

Originally Published at: https://medium.com/growcer-ecommerce-grocery-software/the-rise-in-ecommerce-grocery-delivery-business-in-saudi-arabia-b2c2cd43120d