In today’s newsletter, we look at the digital advertising market in Southeast Asia and the increasing interest in e-commerce ads. Globally there have been cautionary headwinds for the ad market as a whole, but Southeast Asia has significant headroom to grow due to its low maturity compared to other countries in the region. The market […]
Black Friday, the biggest shopping extravaganza, presents a ~$350 Bn global opportunity through online sales. This year Black Friday will coincide with FIFA World Cup, impacting customers’ purchase behaviour and shopping patterns. Driven by deals and discounts, the Black Friday season is filled with excitement for shoppers, and financial sharing applications are providing an additional […]
Food delivery market is poised to benefit from the celebratory atmosphere that has been a feature of Mega sports events. High consumption enthusiasm will drive consumer spending and acts as a springboard to boost sales. “The Qatar cloud kitchen culture is rapidly evolving and will naturally get a major boost from the celebratory atmosphere” Ramez […]
It is our pleasure to release our report “The Most Inclusive Football Tournament” covering key themes that will play out during the upcoming World Cup in Qatar. The championship in Qatar is one of the largest sporting events in a post-pandemic world. This report covers the impact, market outlook, and evolving consumer and supplier trends […]
Football world championship in Qatar is one of the largest sporting events in a post-pandemic world. Enabled by the proliferation of digital media channels and internet/smartphone penetration, an unprecedented 5 billion consumers are expected to engage with the event. Consumption is expected to spike during the tournament which overlaps with the retail festive season. The […]
MENA Food Delivery Ecosystem is rapidly evolving. While food aggregators helped restaurants weather the pandemic, their impact on the profit margins has been reduced. Restaurants are creating own unique propositions to attract consumers and consecutively restaurant own apps are now the fastest growing segment. Evolving stakeholder economics is poised to reshape the food delivery market in […]
The BPC market in the MENA region is going through a transformational period driven by evolving consumer needs and shopper persona. While legacy brands have undertaken various initiatives to fulfill emerging trends, consumers aren’t fully satisfied. This has led to the emergence of D2C brands who have been able to develop meaningful relationships with customers […]
Black Friday has emerged as one of the most important events in retail in the Middle East and North Africa (MENA), owing to the wide array of deals and discounts, spread out over the 5–6 week festive period. As retail traffic is set to be high; retailers in the region need to be cognizant of […]
Diwali is an occasion when growth, prosperity and togetherness are celebrated across the world. This celebration comes with people exchanging gifts and sweets and the elderly blessing the younger ones with the joy of success. And when it comes to business, consumers’ happiness and appreciation are a true blessing. Well, thanks to the dynamic continuous […]
Black Friday is the most anticipated online shopping event of the year, owing to the wide array of deals and discounts, spread out over the 5–6-week festive period. This year promises to be no different with consumer purchase intent peaking in anticipation of this sales extravaganza. With interesting price drops and high consumer purchase intent, […]
The eB2B landscape in SEA countries of Indonesia, Vietnam and Philippines offers strong growth prospects with ~40% or higher CAGR during 2021-26. The inherent inefficiencies in the traditional supply chains make eB2B an attractive business proposition. It addresses stockouts, product variety, financing options and other pain points for retailers. Similarly, they help brands with increasing […]
1. Online viewership expected to reach 5 Bn during FIFA World Cup 2022 5 Bn eyes are expected to be glued to FIFA World Cup in Qatar, expecting a growth of over 43% than the viewership witnessed during FIFA World Cup in Russia. Covid fueled digital penetration which has given fans multiple ways for football […]
In today’s newsletter, we are revisiting the new-age (online-focused) coffee chain models in Indonesia and providing color on how they are witnessing a revival in growth amid shifting consumer preferences. Compared to other business models, these players have been less affected by COVID due to their greater online presence, access and affordable offerings. They are […]
1. Qatar, the first Middle East nation to hold the World Cup is spending a massive $200 Bn in the lead up to the Mega event Qatar is the first Middle East country which will be hosting the FIFA World Cup. This World Cup will be the most compact World Cup where all the stadiums […]
1. Grocery was the most underpenetrated online sector pre pandemic… The Grocery sector has been a predominantly offline shopped sector before the covid 19 pandemic, due to its essential nature. Consumers have always preferred to personally check the products before shopping for grocery as it directly impacts their health and wellbeing. Grocery shopping was a […]
Festive sales are a concept that has run across geographies, where China and US have gone mainstream with massive sales events like the Single’s Day Sale and Black Friday Sale respectively. Back home, festive season is in full swing, and so are the sales. Here are some interesting trends and projections for the upcoming festive […]
1. The Consumer Electronics retail market will represent a ~$100 Bn opportunity by 2027… The electronics market in MENA is currently ~$60 Bn and is forecasted to grow at a CAGR of 9% to be a ~100 market by 2027. UAE & KSA account for close to half of the market currently and their share […]
Creators are now playing an equally important role compared to celebrities as the content is more relatable and the format is more engaging
Online channel has increased in prominence and now makes up ~20% of luxury sales in UAE currently influencing more than 90%
Parcel volumes have witnessed growth in 2021, while the revenue per parcel has maintained a downtrend
The fund-raising activity in 2021 in Vietnam has broken all previous year deal making records. 2022 continues to show a similar trajectory
India’s used smartphone market is poised to reach a staggering market size of USD 10Bn by FY26
SEA travel market was ~USD80 Bn in size in FY20 and is expected to grow to 1.3 times by FY27
Strong fund flows in the consumer internet economy will propel the industry ahead and lay a groundwork for increased market opportunities, penetration and revenue growth in the future
Online search and social media have the highest influence in creating product awareness
Ramadan is a $6.2 Bn online sales event in MENA. Festive periods account for ~40% of annual e-tail in MENA.
The MENAP Digital Economy will multiply 7x by 2030; this will require a funding of ~$20 Bn in the coming 2-3 years
Consumers express high interest to explore new brands across sectors, driving adoption of Digitally native brands (DNB)
Quick commerce is fundamentally changing consumer purchase behavior in metros and creating delight
Players have access to a mix of 3PL and captive logistics to meet their specific growth targets
Dark Kitchens would account for 13%+ of the FoodTech market in 2025 the penetration would be significantly higher in UAE & KSA
Fueled by recent funding, the Pakistan digital landscape is now set to take of as players storm the market
Buying is seen as a better value-added proposition especially for home and electronics sectors where the estimated duration of use can be higher.
Digital brand are finding it increasingly rewarding and have a ~$250 Bn opportunity by 2030
India Internet is surging ahead with >50% y-o-y growth in 2021, and is poised to be a $1 Tn economy by 2030
Celebrations will drive Ramadan purchases and Grocery, Fashion key sectors that will see spike in demand
Indonesia’s e-commerce market is one of the fastest growing globally and accounts for more than half of the SEA e-commerce market
Ramadan days are expected to see 23% shoot up in sale
These supply and demand trends have placed the Direct to consumer (D2C) channel on a pedestal of growth and this segment already accounts for ~15% of online retail in key e-tail markets in METAP.
Funding has strengthened QCommerce’s capabilities amid signs of encouraging growth
Q-commerce with sectors that already have the necessary digital infrastructure and consumer awareness in the MENA region expands the market potential for quick commerce to encompass a $100 Bn opportunity .
Investors are supporting the new-age players’ ambition to expand their footprint and sustain their growth momentum
eCommerce sector has delivered a robust ( >37%+) CAGR growth during the last three years.
A key trend that was alluded to coming into the Black Friday event is the further inclusion of sectors such as Beauty & Personal Care and Fashion into the promotional offerings.
Sector appeal slightly varies among the different generations with Gen Z being most inclined towards Fashion this Black Friday.
Within e-tailing alone, instant Delivery is expected to contribute to 8% of GMV in the next 3 years
Online penetration in India’s BPC market is just 8%, but the potential is immense.
India’s furniture + home market saw a steep COVID-driven drop to $11.5 Bn in FY21, but is poised for strong recovery post COVID with strong recovery already underway in FY 22
The growing concerns around the adverse effects of ‘fast’ consumption and the lack of affordable and sustainable alternatives have given birth to the second-hand goods market.
Indicating that by 2026, the total consumption in Indian gated communities will increase by 2.5x reaching $500 billion.
Furniture and home market is geared to become $40 billion by 2026
Packages represent ~45% of the ~$ 38Bn travel agent market in India
Black Friday is a critical event in the retail calendar in MENA. This event which was first launched by Souq (now Amazon) as a 3-day online only event has now expanded to over six weeks of Q4. The event has been so popular that ~20% of annual online retail sales happen during the Black Friday sale period.
Key Black Friday Trends:
a. The Market is Stabilizing:
Last year BF season achieved +90% YoY growth; this year YoY growth is expected to stabilize at ~30%; Sales to reach ~$6 bn during BF period.
b. Differentiated Strategies are going to be at play
In terms of strategy, higher focus on private labels, Inventory led fulfilment and fast delivery speed are expected.
c. Consumer is moving beyond discounts
Discounts will become a right-to-play during BF. For right-to-win, other factors such as offer variety and exclusivity and experience will be key.
The Online Festive Sales of 2021 saw 23% YoY sales growth in 2021
Dine-In and cloud kitchens, cloud kitchens are growing largely as they have higher EBITDA profitability along with a significantly lower capex.
With a focus on achieving higher volume sales, sellers have announced huge discounts this festive season.
The eGrocery market is set to be sized $21-25 billion by 2025
The outsourced laundry market including both B2B & B2C is $2.5 billion market
We expect the sector to multiply 4x from 2020 levels to represent a USD 165 Bn market by 2025
Ecommerce players have ramped up their fresh-food vertical by introducing new products and services.
Time spent on digital media has shot up over the last 1-2 years; social media & Messaging is the most consumed channel.
Travel companies have been diversifying their revenue models and have wrapped up recent funding interest
With the right tailwinds, online penetration of food services is set to become 2x by 2025
MEA investments surged to USD 2.1 Bn YTD in 2021, already ~2x of last year
Higher focus on fresh groceries and supporting infrastructure are key to ensuring higher margins and better bottom-line
More than 95% of consumers plan to use some digital channel for product discovery this Black Friday.
Traditionally offline brands have been launching online stores while on the other hand platforms that began as pure-play online channels are opening brick-and-mortar stores.
Cloud Kitchens have emerged as the new gateway to food service industry
Quick commerce is estimated at USD $~0.3 Bn in CY2021 and is expected to grow 10-15x in the next 5 years, to become $5 billion by 2025
Consumers have evolved over the years and Digital has become a strong contributor to retail sales.
MENA Q-commerce market is expected to grow by 24% to reach $20bn as consumers continue looking for convenience and immediate gratification.
A key factor for this growing trend is the cohort of millennials and Gen Z who spend most of their time on digital platforms.
In a span of one year, we have seen the KSA eGrocery market grow from negligible share in 2019 to 1% in 2020. However KSA’s eGrocery maturity still lags compared to other economies.
Etailing Horizontals are the distinct leaders while Specialists are lagging
The SEA Digital Economy is expected to multiply more than 3x in 5 years, reaching $ 365 Bn by 2025
Of digital economy, online retail remains a big part which will likely touch $350B GMV by 2030
MENA Digital Economy to reach new heights
E-Commerce has been flourishing as an important channel for retail of consumer products across the globe and has paved way for retailers, merchants, and independent private labels to scale.
UAE Prime Day is still in emerging phase with 140% sales increase from an ordinary day compared to 250% in US
India’s telemedicine market is currently ~INR 7K Cr. The segment is now seeing more traction as people are adopting it faster as they are reluctant to risk and physically visit a doctor.
Electronics and Gaming were highly dominated by online channel whereas Kitchen & Dining and Jewelry by offline channel
3PL dependence has remained relatively high as players optimise their in-house logistics spend.
QSR’s are usually met with the trade-off between focusing on their own app vs a marketplace app. Each have their own pros and cons. Broadly, having one’s own app creates better control of the brand, greater engagement with the customer but it is a high cost and effort activity in terms of building a userbase and capabilities.
Online Food service market penetration to remain stable at around 15-20%
Q1 succeeds the most popular, promotion-heavy quarter of the ID eCommerce Market, yet grew by 3% QoQ.
Indian Female Innerwear Market is likely to be USD 11-12 opportunity by 2025
Horizontals have captured majority of market share
Online players are better positioned to capture the emerging opportunity: > USD 1 Bn to be added to Online Mom & Baby care segment over next 5 years
Q-commerce has enabled consumers to try new online categories because of its convenience thus increasing the share of wallet.
MENA online electronics has ~3x penetration levels compared to online retail
Lebaran 2021 is expected to contribute USD 5+ Bn to e-tail GMV
Offline fashion is poised to recover this year while online fashion is growing strong Y-o-Y
Domestic Consumption of Coffee has been growing fast in Indonesia – despite the recent fall in exports
The MENA market has grown significantly in recent years and its GMV has become comparable to other emerging economies such as India and Indonesia.
e-Commerce markets in ASEAN have seen strong growth in 2020
Ramadan 2021 to contribute more than $2Bn to e-tail GMV, 2x that of 2019
Social commerce to create opportunities for millions of resellers and suppliers in the next 5 years
Players have been innovating to improve profitability, more players expected to enter
Consumers are now looking at sustainable fashion and value purchases; the luxury segment consumption remained largely unaffected
Rental furniture or appliances is a Rs 33,500 crore market in India