Food and Beverage Internet Sales in the UAE Grow at a CAGR of 21% in the 2015-2018 Period

Wednesday 24 July 2019
Dubai Chamber
Dubai - MENA Herald:

Internet Food and Beverage sales in the UAE have grown at a compound annual growth rate (CAGR) of 21% between 2015 and 2018, according to a new analysis issued by Dubai Chamber of Commerce and Industry.

The analysis, based on data from Euromonitor International, a strategic market research organisation, and Nielsen, a global measurement and data analytics company, points out that online food retailing was estimated to be valued at around AED 360 million in 2018 compared to AED 205 million in 2015, according to the E-commerce in the UAE Food Retail Market report, Euromonitor International 2019. 

The report breaks down e-commerce sales in the UAE into three key categories, with each one having shown steady and consistent levels of growth since 2015. The first is e-commerce companies that conduct their retailing business almost entirely online, while the second is traditional Mass Grocery Retailers (MGRs) and the third is delivery companies whose business model is to transport a product from an existing store or restaurant to buyers’ homes. 

Using statistics from the Nielsen Connected Commerce Report 2018 and the Nielsen Connected Commerce Global Survey 2018, Dubai Chamber’s analysis reveals that from 2017 to 2018, the percentage of people using online channels to order delivery meals around the world increased from 31% to 33%, the percentage of people ordering fresh groceries to their homes increased from 24% to 26% and the percentage of people ordering packaged groceries increased from around 27% to 30%. 

These trends, which apply to the UAE, point to a potential array of opportunities for new businesses in the UAE, based on three main factors: the entry of MGRs in the online food delivery market, restaurants having increased their capacity to deliver products, and the proliferation of mobile phone applications making it easier for customers to order food.

The increasing use of online retail sales channels has led to opportunities for businesses to use data analytics to understand and target customers using their websites and mobile phone apps. These opportunities include aiming deals and discounts at customers who are positively influenced by such promotions, efficient targeting of advertisements to customers at certain times and on certain digital channels, and finding out which customers are not purchasing anymore and then reaching out to them to retain their business.

The entry of MGRs to the online food delivery market in the UAE sheds light on the massive potential for growth in the sector, spurring restaurants to quickly expand their meal delivery capabilities. The increasing use of smartphone apps have therefore made it much easier for customers to order meals.

The analysis concludes by noting that the increase in e-commerce sales is one of the most important developments currently impacting the global food market. The trend of online food and grocery ordering increasing in regions across Asia and Africa, it says, could present UAE e-commerce businesses with potential opportunities to expand to countries in these regions, providing e-commerce, delivery and logistic solutions that could generate profits from this important food retailing direction.

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