Grocery e-commerce boom in the Middle East, with Kuwait increasing by nearly 500%

Grocery e-commerce has been one of the slowest growing e-commerce sectors in the Middle East, but due to the positive impact of the epidemic, grocery e-commerce has regained new vitality. According to RedSeer data, the size of Kuwait's grocery e-commerce market exceeded US$500 million in 2020 , a figure of only US$100 million in 2019, an increase of about 450% . RedSeer expects Kuwait's grocery e-commerce market to grow to US$700 million by the end of 2021.

Sandeep Gandiwalla, head of consulting at RedSeer Middle East, said: “The rapid growth of Kuwait’s grocery e-commerce market last year was mainly due to the increase in local online consumers and the improvement of the online channel supply chain.”

He also said that the COVID-19 pandemic was the core driving force of this phenomenon. In early 2020, lockdown measures and the risk of infection made online groceries a necessity and also cultivated a group of loyal online grocery consumers. The familiarity with new online shopping channels and the influx of people helped boost the growth momentum of e-commerce last year.

The Kuwaiti market has also responded positively to consumer changes. For example, Drop, TONS, Carrefour and Deliveroo have all updated their products and services to compete with existing online retailers such as Jumia, Sinbad, Talabat and Lulu.

“These new players are one of the catalysts for the rapid growth of the grocery e-commerce market as they bring diversification, better delivery experience and improve their last-mile logistics capabilities,” Ganediwalla said.

Of course, with the exception of Kuwait, grocery e-commerce has grown across the Middle East. According to another RedSeer report from October last year, the grocery e-commerce markets in the UAE and Saudi Arabia both doubled in 2020. Overall, the UAE and Saudi Arabia grocery e-commerce markets are worth $1.1 billion and $430 million, respectively. In terms of market penetration, Kuwait is far ahead of Saudi Arabia and slightly behind the UAE.

Ganediwalla believes that the combination of a strong consumer base and rising average order values ​​will continue to grow in Kuwait’s grocery e-commerce market. In addition, online grocery retailers are also working hard to solve consumer pain points, which will help maintain the growth trend.

middle East

Kuwait

E-commerce