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Jun, 2022     

The Impending Online Upsurge in CPG KSA

~18 Mn online CPG users by 2025 representing 90% of online shoppers

1. KSA CPG still trails Online Retail penetration; However, market is poised to grow the fastest and exceed 5 Bn by 2025

Online CPG penetration currently stands at 8% in KSA. Compared to Online retail we find that there is still much room to grow in the coming years. However, consumer purchases evolving from random stop-gap need filling to a more planned purchase nature for a longer duration (inducing larger basket size) is paramount to the rapid growth exceeding 20%.

Additionally, further investment into quick commerce and dark stores are key to unearth this >5bn market by 2025

2. ~18 Mn online CPG users by 2025 representing 90% of online shoppers

The kingdom is currently home to 12 million online CPG users. However, the market is set to welcome nearly 6 million online CPG users by 2025. This drastically improves CPG’s share of online shoppers from ~80% in 2021 to 91% come 2025.

3. In terms of supply side, the innovations in delivery, payment & logistics will result in the increase in online CPG sales


From the supplier side, evolving unit economics through better marketplace partnerships and private label sales permit further investment into logistics and delivery. The latter point being identified as crucial from consumers point of view to increase their overall online CPG spend.

4. At an aggregate level CPG has seen strong online adoption, but significant room for increase in adoption across sub segments within CPG


Note(s): 1. Which of the following CPG products/categories have you bought (offline + online) in the past 6 months? 2. BPC: Beauty & Personal Care 

CPG adoption varies drastically between the different product categories for both Beauty & Personal Care and Grocery. Adoptions remains consolidated around select categories within both sectors, leaving significant opportunities in others. Enhanced delivery speeds would also drive adoption for fresh goods categories and other underpenetrated offerings.