Report Overview

The deepening internet penetration and smartphone use, busy lifestyles, and growing disposable income are expected to boost the growth of UAE Online Grocery Delivery Market during the forecast period between 2024 and 2030.

UAE Online Grocery Delivery Market - Industry Trends & Forecast Report, 2030

The UAE Online Grocery Delivery Market size was estimated to be worth USD 5.18 billion in 2023. During the forecast period between 2024 and 2030, the UAE Online Grocery Delivery Market size is projected to grow at a CAGR of 6.38%, reaching a value of USD 7.22 billion by 2030. Major growth factors for the UAE Online Grocery Delivery Market include rising launches of home delivery apps for groceries in the country, along with the rising convenience of online payment platforms. In addition, the COVID-19 outbreak prompted industry players to offer contactless delivery, which further proliferated the UAE online grocery delivery market.

Online Grocery Delivery – Overview

Online grocery delivery is a grocery delivery service that collaborates with grocery store chains to deliver from a variety of locations. As a result, they provide a wide range of products to meet all dietary requirements. Grocery shopping online for home delivery allows the consumer to shop from the comfort of their dining room table, couch, or office, without having to navigate crowded aisles and long cashier lines. Additionally, the term "online delivery services" refers to the collection of goods from a retailer and their delivery to a consumer. That means the consumer can have more time to do the things they enjoy due to home deliveries of groceries.

UAE Online Grocery Delivery Market

Growth Drivers

Expanding E-commerce Sector and Improving Logistics

Online grocery delivery businesses are registering significant growth in the UAE market owing to the growing popularity of e-commerce platforms among customers and improving logistics in the country. Many online grocery platforms, such as Deliveroo UAE and Careem, offer 15-minute delivery to meet the growing consumer demand for fast delivery. These platforms capitalize on improved logistics networks and leverage technologies to enhance their offerings in the market and establish themselves as the leading players in the online grocery delivery ecosystem in the UAE.

Challenges

High Inventory Cost and Delivery Rates

One of the main factors impeding the growth of the online grocery delivery market in the UAE is the inventory costs borne by the companies in the online grocery market. The corporations have to make large investments to manage and store the groceries that need to be delivered on time. Additionally, some commodities, like fruits and vegetables or dairy products, have a limited shelf life, which raises the risk of loss during storage when the demand is low.

UAE Online Grocery Delivery Market

Segmental Coverage

UAE Online Grocery Delivery Market – By Product Category

Based on product category, the UAE Online Grocery Delivery Market is segregated into food & beverages, household supplies, beauty & health, baby & kids products, fresh food, and others. The food & beverages segment holds the largest share in the UAE Online Grocery Delivery Market owing to the increasing working population and rising female workforce. Staples that are regarded as necessities, such as wheat, food grains, and cooking oil, are frequently purchased through online delivery platforms in the UAE and contribute to its market growth.

UAE Online Grocery Delivery Market – By Platform

Based on the platform, the UAE Online Grocery Delivery Market is split into mobile and desktop websites segments. The mobile segment accounts for a higher market share, as the growth of the market is mainly attributed to the launch of various mobile apps from different industry players, such as Lulu Hypermarket, El Grocer, Talabat, and Kibsons. Mobile apps offer an easy to access user interface, which enhances customer experience and helps build loyalty.

UAE Online Grocery Delivery Market – By Mode of Payment

Based on mode of payment, the UAE Online Grocery Delivery Market is segmented into pre-delivery online payment, card on delivery, and cash on delivery. The pre-delivery online payment segment dominates the UAE Online Grocery Delivery Market. The convenience of online payments in real-time while shopping majorly contributes to the segment’s growth. Furthermore, COVID-19 pandemic prompted the shift of consumers from cash on delivery to pre-delivery online payment, as it allows contactless delivery and may prevent virus spread.

Competitive Landscape

Major players operating in the UAE Online Grocery Delivery Market include Carrefour, Lulu Hypermarket, Instashop, Kibsons, El Grocer, Amazon, Noon, Farmbox, Spinneys, and Choithrams.

To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In November 2022 – Amazon signed an agreement with Lulu Group, a multinational conglomerate company based in Abu Dhabi, to start an online grocery store in the UAE.

Scope of the Report

By Product Category

• Food & Beverages

• Household Supplies

• Beauty & Health

• Baby & Kids Products

• Fresh Food

• Others

By Platform

• Mobile

• Desktop Website

By Mode of Payment

• Pre-Delivery Online Payment

• Card on Delivery

• Cash on Delivery