Over the past years, UAE eGrocery market been evolving. It has now matured and has a level of penetration comparable to developed markets. At the same time, the market has experienced a shift, moving from marketplace-driven to a balanced mix of omnichannel and hyperlocal players. Going forward, the eGrocery market is expected to double, attaining a 14% market penetration by 2027.
1. Over the years, UAE eGrocery has evolved into a mature market, boasting a 9% penetration rate
The eGrocery market in the UAE has not only evolved but also significantly expanded over the past few years. While the pandemic accelerated the overall adoption, the market has now reached a level of maturity with penetration comparable to developed markets.
2. In terms of business models, the market has experienced a significant shift, moving from marketplace-driven to a balanced mix of omnichannel and hyperlocal
Recently, the market has shifted from being marketplace-driven to a balanced mix of omnichannels and hyperlocals. During the pandemic, omnichannels took the lead, effectively catering to the unprecedented surge in demand. However, hyperlocal platforms such as Talabat, Instashop, and Careem have now captured a substantial market share, owing to their tech-first & quick delivery proposition.
3.Going forward, the eGrocery market is expected to double, attaining a 14% market penetration by 2027
Going forward, we anticipate the market to double in size. This growth will be fueled by an increase in wallet share, driven by the expansion of product offerings, enhancements in the delivery experience, a focus on loyalty programs by brands, and key players diversifying their supplier options through partnerships with omnichannel players.
4. The pressing dilemma is whether the driving forces behind this growth will shift or stay consistent
Consumer demographics have shifted from predominantly young working professionals to a broader audience, including bachelors, families, and tech-savvy users. Product categories have also evolved, with fresh food taking a prominent role in the e-grocery landscape. The adoption of the dark store model by multiple players has led to a shift in the dominant delivery model towards speed.
Key market players are now faced with the pressing question of whether the driving forces for future growth will remain stable or undergo change?