E-commerce in Saudi Arabia: Food sales surge amid COVID-19 pandemic

06-May-2020 - Last updated on 06-May-2020 at 02:49 GMT

In a Consumer Behaviour Research Insights published by Choueiri Group, 55% of the population in Saudi Arabia purchased grocery items online in April 2020, compared to before COVID-19, where only 6% of the population did so ©NanaDirect

Related tags Middle east Saudi arabia COVID-19 ecommerce

Consumers in Saudi Arabia have drastically ramped-up their online purchases of food products in the the wake of the COVID-19 pandemic, new data reveals.

The stats reveal that 55% of the population purchased grocery items online in April, compared to just 6% before the outbreak.

The findings were based on an online survey conducted by Dubai-based Choueiri Group (CG) between mid-March to April, involving 2800 Saudi participants.

Online shift

In Saudi Arabia, the government shut down public venues, with the majority of the population working remotely, and social distancing measures implemented.

CG revealed that this had caused big shifts in consumer behaviour across all age groups, specifically in grocery shopping.

Older generations in particular were starting to shop online to avoid supermarket queues and crowds, it added.

According to CG, the main grocery items being purchased were products with short shelf lives. This was mainly driven by the freshness aspect as well as higher nutritional benefits to potentially help boost immunity.

The top grocery products for online purchase were dairy products (69%), fruits and vegetables (67%), and bread (62%).

Sales spike

For local supermarket and hypermarket retailer BinDawood Holding, which owns two e-commerce platforms, BinDawood (supermarket) and Danube (hypermarket), average sales have increased by 200% since COVID-19. Order values also grew 50%, and app installations by 400%.

And UAE Carrefour saw a 59% increase in new online customers during COVID-19.

Local grocery delivery app, Nana Direct, also saw a surge in sales during this time. Nana allows consumers to order groceries from different supermarkets and food stores such as Panda and Carrefour and have them delivered to the house.

In late March, Nana raised USD18million in a Series B funding round co-led by Saudi Technology Ventures (STV) & Middle East Venture Partners (MEVP) with plans to expand its operations across the Middle East.

The start-up said the grocery market in Saudi Arabia, UAE and Egypt alone amounted to USD83 billion.

According to Euromonitor, the grocery retail market in MENA was forecasted to grow 9.5% this year, to reach USD426.5 billion.

Ahmad Alshammari, principal at STV, added: “ The online grocery market in Saudi Arabia has the potential to grow 18 times to reach global penetration rates. The opportunity to transform the second-highest consumer spending bucket is large and significant.”

Delta Partners added there was huge potential in this region as only 0.1% of grocery sales take place online, compared to 1.8% globally.

Nana believes that the sudden shift in consumer behaviour will likely continue post-pandemic and ultimately lead to the rapid growth of the eGrocery sector in the region.