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Saudi Arabia Food Delivery Market

Saudi Arabia Food Delivery Market, By Operation Type (Food Aggregators, Restaurant-Based), By Source (Online, Offline), By Payment (Mobile Wallet, Card Payment, Cash on Delivery and Net Banking, Others), Trend Analysis, Competitive Market Share & Forecast, 2018-2028

  • Published Date: June 2022
  • Report ID: BWC2187
  • Available Format: PDF
  • Page: 84

Report Overview

Factors driving the growth of Saudi Arabia Food Delivery Market are advent of numerous online platforms that make food delivery services more accessible...

Saudi Arabia Food Delivery Market- Industry Trends & Forecast Report 2028

Saudi Arabia Food Delivery market was worth USD 762.8 million in the year 2021 and is expected to reach USD 3,842.6 million by 2028. The data generated by the study further reveals that the market is likely to grow at a CAGR of 24.4% during 2022-2028 (forecast period). People are finding it more difficult to cook meals on a regular basis as their working lives change, boosting demand for food delivery services and propelling market growth. Furthermore, the expansion of the Saudi Arabia food delivery market is being fuelled by the advent of numerous online platforms that make food delivery services more accessible. Due to the convenience, they provide, food delivery services have become extremely popular among Saudi Arabia's younger consumers. Such services allow users to have a hassle-free delivery experience, saving both time and energy, which helps to drive the industry.

Saudi Arabia Food Delivery Market

Saudi Arabia Food Delivery Market Overview

Food delivery is a courier service in which food is delivered to customers on demand by retailers, restaurants, or third-party applications. Orders are now placed through mobile apps, websites, or over the phone. A retail food delivery service delivers meals from a restaurant, store, or independent food delivery company directly to clients. Food delivery services or a restaurant's website or mobile app are the most common methods of placing orders. These services can also transport a variety of foods, including restaurant food, desserts, salads, meal packages, groceries, and even veggies. Orders can be placed through the outlets' websites or mobile apps, and they can also be reached directly by phone. Third-party meal delivery applications have also bolstered the Saudi Arabian food delivery business.

Saudi Arabia Food Delivery Market Trends

Growth Drivers

Emergence of Food Delivery Mobile Applications Coupled with Internet Penetration

With 72.8 % possessing a smartphone, Saudi Arabia is the world's third-largest smartphone market. One of the key growth factors for the Saudi Arabia food delivery market is predicted to be the increasing penetration of smartphones and internet usage. Due to their growing spending power, young and working adults are also driving the market. Furthermore, their great dependence on and trust in online payment systems promotes market expansion. As a result, Saudi Arabia is expected to lead the food delivery business over the next few years. Furthermore, one of the primary elements driving Saudi Arabia's growth is the advent of different global and local food delivery platforms in the region. Food delivery applications such as MRSOOL, Talabat, Lugmety, UberEats, and others have gained significant popularity in Saudi Arabia as a result of rising internet penetration and smartphone usage.

Government Efforts into Accelerating Food Delivery Sector

Saudi Arabia's economy is mostly fuelled by oil exports. As a result, in order to build a diversified economy, Saudi Arabia is encouraging other sectors, such as food delivery services, through investments. For instance, the Communications and Information Technology Commission (CITC) and the Social Development Bank (SDB) announced a three-year collaboration agreement in September 2021 to finance self-employed individuals by allowing them to possess private automobiles for work delivery alternatives. Food delivery employment and enterprises are predicted to grow in Saudi Arabia as a result of such initiatives and campaigns.

Restraints

Lack of Technological Knowledge Among Small Businesses

Saudi Arabia's food delivery sector is primarily technologically driven and reliant on the internet and mobile applications. However, the owners of some local restaurants in their 40s and 50s are unfamiliar with technology and its applications. Due to a technical issue, a lack of communication between the customer and the food delivery provider frequently results in the delivery of incorrect orders, delivery to the incorrect place, poor food quality, and late delivery, among other things, resulting in a decrease in customer visits to websites and a negative impact on business. Saudi Arabia's food delivery market is severely limited as a result of this problem.

Impact of COVID-19 On the Saudi Arabia Food Delivery Market

The nationwide lockdown induced by the COVID-19 pandemic primarily caused disruptions in the development of the Saudi Arabia online food delivery market. The initial phases of the covid-19 pandemic resulted in hesitancy among the consumers from ordering online food owing to the apprehensions regarding safety and an overall preference for home-cooked food. However, things picked up later with the pandemic helping the companies recover unit economics while adding more consumers, as the frequency to dine out substantially dropped. Although consumers have restarted going out for meals, they feel very convenient to order food online since it liberates them from personally visiting the restaurant. Amidst the Pandemic Covid-19, online food delivery companies resorted to outreach programs in order to promise their customers the safety and reliability of their products

Saudi Arabia Food Delivery – By Operation Type

Based on modes of operation, the Saudi Arabian food delivery market is divided into food aggregators and restaurant-based models. The segment of food aggregators has the largest market share. Customers can choose from a variety of restaurants and food outlets based on the type of food they want to order. Furthermore, these platforms provide exclusive savings and premium services to customers, such as faster delivery. The restaurant-based operation accounted for 14.42% market share in 2021, with a market worth of USD 110.0 million, and is expected to reach USD 513.8 million by 2028.

Saudi Arabia Food Delivery Market Share

Saudi Arabia Food Delivery Market – By Source

Based on sources, the Saudi Arabia food delivery market is grouped into online (mobile app and web), and offline segment. Due to the emergence of various third-party food delivery applications, the online segment has the biggest market share. Customers can order food from a variety of restaurants and food outlets via online food delivery apps. Furthermore, they are connected with popular payment software to expedite the payment process. Customers can also use mobile apps and websites to follow the status of their orders and receive real-time updates. As a result of these advantages, their growth is accelerating, and they now have the largest market share.

Competitive Landscape

The leading players in the Saudi Arabia food delivery market are Mrsool Inc., Delivery Hero, Careem, Jahez, Lugmety, ToYou, Mathaqi, The Chefz, and Wssel. Mrsool Inc., Delivery Hero, and Careem had good growth in 2021. Mrsool grew very fast during the last three years. This company is serving more than 4 million users across all the cities of the Saudi Kingdom. Mrsool developed the on-demand service fulfillment model in Saudi Arabia, by setting up a huge customer-to-customer network via generic chat-based ordering experience, which helped customers to be creative and reduce challenge in explaining the service needed and providing the couriers the option to bid with their price they see fit, making a fully scalable and self-regulating model.

Recent Development

31 Dec 2021 – Delivery Hero SE the world’s leading local delivery platform signed an agreement with a number of shareholders of Glovoapp23, S.L. to acquire an additional 39.4% stake in the Company (on a non-diluted basis) in exchange for Delivery Hero shares, making Delivery Hero the majority shareholder of Glovo after closing.

May 2022: The chefz is being eyed by Jahez for a full-acquisition. Jahez signed a non-binding agreement to obtain rival company Chefz as it seeks to strengthen its situation in Saudi Arabia's fast-growing online food delivery business. The consideration for the anticipated transaction will be based “due diligence” including cash and shares in Jahez.

Scope of Report:

Attribute Details
Years Considered Historical data – 2018-2021
Base Year – 2021
Forecast – 2022 – 2028
Facts Covered Revenue in USD Million
Market Coverage Saudi Arabia
Product/Service Segmentation By Operation Type, By Source, By Payment
Key Players The leading players in the Saudi Arabia food delivery market are Mrsool Inc., Delivery Hero, Careem, Jahez, Lugmety, ToYou, Mathaqi, The Chefz, and Wssel.

 

By Operation Type

  • Food Aggregators
  • Restaurant-Based

By Source

  • Online (Mobile App and Web)
  • Offline

By Payment

  • Mobile Wallet
  • Card Payment
  • Cash on Delivery and Net Banking
  • Others
  1. Research Framework
    1. Research Objective
    2.  Product Overview
    3. Market Segmentation
  2. Research Methodology
    1. Qualitative Research
      1. Primary & Secondary Research
    2. Quantitative Research
    3. Market Breakdown & Data Triangulation
      1. Secondary Research
      2. Primary Research
    4. Breakdown of Primary Research Respondents, By Region
    5. Assumption & Limitation
  3. Executive Summary
  4. Saudi Arabia Food Delivery Market Insights
    1. Industry Value Chain Analysis
    2. DROC Analysis
      1. Growth Drivers
      2. Restraints
      3. Opportunities
      4. Challenges
    3. Technological Landscape/Recent Development
    4. Regulatory Framework
    5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
  5. Saudi Arabia Food Delivery Market Overview
    1. Market Size & Forecast by Value, 2018-2028
      1. By Value (USD Million)
    2. Market Share & Forecast
      1. By Operation Type 
        1. Food Aggregators
        2. Restaurant-Based
      2. By Source
          1. Online (Mobile App and Web)
          2. Offline
      3. By Payment
        1. Mobile Wallet
        2. Card Payment
        3. Cash on Delivery and Net Banking
        4. Others
  6. Competitive Landscape
    1. List of Key Players and Their Offerings
    2. Market Share Analysis, 2021
    3. Competitive Benchmarking, By Operating Parameters
    4. Key Strategic Development (Merger, Acquisition, Partnership.)
  7. Impact of COVID-19 on Saudi Arabia Food Delivery Market Industry
  8. Company Profile (Company Overview, Financial Matrix, Competitive landscape, Key Personnel, Key Competitors, Contact Address, and Strategic Outlook)
    1. Mrsool Inc
    2. Delivery Hero SE
    3. Careem
    4. Jahez
    5. Lugmety
    6. ToYou
    7. Mathaqi
    8. The Chefz
    9. Wssel
  9.  Key Strategic Recommendations

 

Note: Financial in information in case of non-listed companies will be provided as per availability

The segmentation and the companies are subjected to modifications based on in-depth secondary for the final deliverable

 

List of Figures

 

Fig 1   Saudi Arabia Food Delivery Market Segmentation

Fig 2   Saudi Arabia Food Delivery Market Size, By Value (USD Million)

Fig 3   Saudi Arabia Food Delivery Market By Operation Type, By Value (In %), 2021

Fig 4   Industry Value Chain Analysis

Fig 5   Individuals using the Internet (% of population) - Saudi Arabia

Fig 6   Porters Five Forces Analysis

Fig 7   Saudi Arabia Food Delivery Market Size, By Value (USD Million), 2018-2028

Fig 8   Saudi Arabia Food Delivery Market Share (%), By Operation Type, By Value, 2018-2028

Fig 9   Saudi Arabia Food Delivery Market Share (%), By Source, By Value, 2018-2028

Fig 10  Saudi Arabia Food Delivery Market Share (%), By Payment, By Value, 2018-2028

Fig 11  Saudi Arabia Food Delivery Company Market Share Analysis, 2021

 

List of Tables

 

Table 1         Saudi Arabia Food Delivery Market Size (USD Million), By Operation Type, By Value, 2018-2028

Table 2         Saudi Arabia Food Delivery Market Size (USD Million), By Source, By Value, 2018-2028

Table 3         Saudi Arabia Food Delivery Market Size (USD Million), By Payment, By Value, 2018-2028

Table 4         List of Key Players and Their Offerings

Table 5         Competitive Benchmarking, By Operating Parameters

Table 6         Mrsool Inc Company Overview

Table 7         Delivery Hero SE Financial Analysis

Table 8         Careem Company Overview

Table 9         Jahez Company Overview

Table 10        Lugmety Company Overview

Table 11        ToYou Company Overview

Table 12        Mathaqi Company Overview

Table 13        The Chefz Company Overview

Table 14        Wssel Company Overview

Market Segmentation

By Operation Type

  • Food Aggregators
  • Restaurant-Based

By Source

  • Online (Mobile App and Web)
  • Offline

By Payment

  • Mobile Wallet
  • Card Payment
  • Cash on Delivery and Net Banking
  • Others
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Frequently Asked Questions (FAQs):

Ans: The food delivery market reached USD 762.8 Million in 2021 across Saudi Arabia.
Ans: The segment of food aggregators accounted for the largest market share in the Saudi Arabia Food Delivery Market.
Ans: The key players operating in the Saudi Arabia Food Delivery Market are Mrsool Inc., Delivery Hero, Careem, Jahez, Lugmety, ToYou, Mathaqi, The Chefz, and Wssel.
Ans: Expansion of the Saudi Arabia food delivery market is being fuelled by the advent of numerous online platforms that make food delivery services more accessible.