The challenging pandemic situation shown an impact on almost all the sections of the society including the eCommerce business which was high in demand before the pandemic. But eCommerce business like Online Grocery Delivery business is one among all that has witnessed the positive impact of COVID-19 that increase the demand for such services. Countries like the UAE witnessed a sudden spike in demand for online grocery giving new opportunities to the local stores to expand their business and shift online. 

Let’s take a look at what experts/ research reports say:

  • As per a report shared by RedSeer Consulting, grocery is the most exciting e-commerce category observing over 300% spike in daily volume in the UAE and Saudi Arabia.
  • A recent study conducted by the Arabian Business, on the online grocery business states that there is a massive 560% rise in demand between January and March 2020 in the UAE. 
  • Currently, the e-groceries is valued at $200 million in Egypt and GCC, accounting for a minor 2.4% of the overall e-commerce market, leaving a lot of space for potential growth.

 Scope of Growth of Online Grocery Delivery Business in UAE:

Factors like high internet penetration, rising working population, and an increase in the number of single families had led to the growth of the eCommerce grocery services in UAE. On the other hand, the number of companies offering online grocery delivery services in the UAE too has increased over the years especially in the year 2020 during the COVID-19 pandemic.

Other factors that contribute to the growth of the eCommerce grocery delivery business in the UAE:

  1. The advanced feature of “contactless delivery” offered by the online grocery store is one big reason why people in the UAE have shifted online purchase of daily use items.
  2. Many offline stores shifted online, offering grocery delivery services to match up the change in purchase behavior of customers in the UAE. 
  3. The current pandemic situation has also contributed to the rise in demand for online grocery delivery service where people were unable to visit a grocery store or at times hesitated to visit an offline store.

Overview of UAE Market Amid COVID-19

The UAE market continues to develop- competition among the local and the foreign eCommerce merchants are becoming more intense. Amazon, which also deals in grocery delivery services in the UAE, is one of the popular eCommerce players in the region.

Whereas on the other hand, the number of new startups in the region are increasing as the local retailer has started entering the eCommerce market. To continue operating and to match-up with the change in customer’s buying behaviors, there is a high focus on online selling and delivery services. Entrepreneurs have started to invest heavily, either launching their grocery business online or add services and features to their already existing online grocery marketplace.

Predicted Future of Online Grocery Delivery Business in UAE

The online grocery market is expected to grow to a CAGR of 27% between 2019-2025 in the UAE. Also, the COVID-29 situation has given a push to the online grocery business in UAE by increasing the demand and need for such delivery service to meet-up with the change in consumer behavior. 

According to Majid Al Futtaim’s CEO Hani Weiss, “More people will look to purchase grocery products online in the UAE and there will be a dramatic increase in the number of grocery shopping apps post Coronavirus.”

Keeping the current situation in mind, we can clearly say that in the coming years the demand for multi-vendor grocery business will definitely increase.

Let’s take a look at the types of Grocery Business Models in the UAE: 

  1. Omni-Channel Model

It is a multichannel approach that gives customers a fully integrated grocery shopping experience across the UAE (GCC) by combining user experience from mobile-browsing to brick-and-mortar grocery stores.

  1. Pure Play Model

If you choose the pure-play model you as an eCommerce company will have complete control over logistics and their entire grocery value chain from farm to fork, connecting sellers and customers.

(Source: Growcer)

  1. Marketplace Model

This is a popular kind of business model and Instashop & Talabat are some examples of the companies that work on this business model. An eCommerce grocery marketplace model fulfills customer’s orders on the basis of partnerships with the local convenience stores and hyper-local markets through a take-rate model.

(Source: Growcer)

Popular eCommerce Grocery Players in UAE

Carrefour

It has been 60 plus years since Carrefour is serving its customers. The company currently operates in almost 28 hypermarkets and 43 supermarkets in the UAE. 

EI Grocer

EI Grocer is one of the leading players among the online grocery delivery companies in the UAE that allow the local residents to order grocery products from the nearby stores with their grocery delivery app.

How to Start Your Own Ecommerce Grocery Delivery Business in the UAE?

If you are planning to start your own eCommerce grocery business in the UAE, a readymade e-commerce grocery solution can help you with it.

Growcer is one such multi-vendor grocery delivery solution that empowers you to launch your grocery delivery business with the web (admin, sellers, delivery staff, and buyers) and mobile portals (buyers and delivery staff) with all the required features amid COVID-19. 

To gain more insights about how to start and what is the scope of eCommerce grocery business growth in the UAE, continue reading the following blog:

Impact of Omicron (COVID-19) on Online Grocery Business and Shopping Behavior in Gulf Cooperation Council (GCC)

Originally Published at https://medium.com/growcer-ecommerce-grocery-software/covid-19-impact-on-the-uae-online-grocery-delivery-business-a62f1f01c2bc