The pandemic has driven the transformation of grocery e-commerce, with average online grocery spending in the UAE exceeding offline

The COVID-19 pandemic has led to a rapid shift in consumer behaviour among UAE residents, resulting in an increase in online shopping spending, especially on groceries, according to a new report by Network International, a payment services provider.

Data shows that in 2020, the average amount spent by UAE residents on groceries online was 40% higher than the amount people spent shopping in offline supermarkets.

"This growth is attributed to a shift in consumer behaviour following the implementation of epidemic prevention and control measures, driven by safety and convenience considerations, which has led to an increase in online and contactless shopping," Network International said.

At the beginning of the outbreak last year, UAE consumers turned to online shopping in large numbers in accordance with home quarantine requirements. As more and more people choose to shop online, online spending is also higher than usual. During the lockdown in March last year, total online grocery consumption surged by 93%.

The surge in online shopping demand has brought both business opportunities and challenges to retailers and logistics companies. In April last year, total online grocery spending fell by 85%, as consumers said they encountered delivery delays of up to weeks.

Starting in May last year, online grocery spending increased, rising to 114%. In November and December, it reached a staggering 280% and 152%.

Offline grocery sales showed an overall downward trend, from 32% in March last year to 10% in May, and once fell into negative territory. It rebounded to 6% in June and reached 12% in December.

Network International attributes the huge growth in online grocery to the accelerated adoption of online grocery platforms and mobile apps, as well as the inclusion of groceries and other essentials in the product range of food delivery and ride-hailing apps.

"The past year has fundamentally changed one of our biggest weekly chores - shopping for groceries - prompting a large portion of us to opt for online purchases," said Nandan Mer, chief executive of the payments provider.

He also believes that more and more consumers will continue to use online channels to buy groceries due to convenience, safety and comfort. Among them, online food and beverage sales will reach US$619 million by 2025.

middle East

United Arab Emirates