E-groceries: The fastest growing e-commerce segment
In the $8.3 billion e-commerce sector in the Middle East and North Africa (Mena), it is the grocery segment that has perhaps experienced the most amount of disruption.
Buying groceries either through a website or app is increasingly becoming the norm for many people across Mena as companies like Carrefour, Danube and smaller supermarkets offer their produce direct to the customer. About 30 per cent of users across Mena are now shopping this way. The e-groceries market is currently worth $200 million in the GCC and Egypt, accounting for less than 1 per cent of the e-commerce market and so there is room for rapid growth.
The region is no stranger to food delivery. Apps like Zomato, Careem Now and Deliveroo have normalised search and taps to get food. This restaurant-to-door delivery service is worth Dh12.9 billion ($3.5bn) in the UAE alone with 60 per cent of the population using a food app on their smartphone or tablet. Germany’s Delivery Hero, which counts Talabat, Hunger Station, Carriage and now Zomato in its portfolio of companies in the Middle East can attribute almost half of its $2 billion yearly revenues to this part of the world.
Talabat is now offering groceries on its platform, highlighting the natural progression in food consumption and delivery. E-commerce platform Wadi.com has completely shut down its non-food offering to focus now on grocery delivery in partnership with Carrefour. Majid Al Futtaim, which owns the franchise rights to the French hypermarket led an investment round worth $30 million in Wadi.com back in October 2018.
The trends are highlighted in the Online Grocery Retail in Mena report by Wamda Research Lab. As the most under-penetrated sector of the e-commerce sector, we expect the e-grocery market to experience a growth rate of more than 100 per cent year on year for at least the next couple of years. To find out more about the emerging trends and the challenges of e-grocery and how the region’s sector compares globally, read the report here.
We recently recorded a podcast with Instasalla, one of Kuwait’s fastest growing e-grocery companies. To get a better understanding of the processes in delivering fresh produce via an app, listen here.