Kuwait's online grocery shopping market posts huge jump

18 February 2021 Consultancy-me.com 2 min. read

Covid-19 has pushed Kuwait’s e-grocery market into overdrive – marked by a nearly 500% jump in market value between 2019 and 2020. RedSeer Consulting took a closer look at the segment.

Kuwait’s $100 million e-grocery segment back in 2019 jumped beyond $500 million last year according to RedSeer, with expectations of a further 30% jump to more than $700 million by the end of 2021.

“The e-grocery market in Kuwait has seen hyper growth last year on the back of increased consumer adoption and improved supply on the online channel.” noted Sandeep Ganediwalla, partner and consulting lead at RedSeer Consulting Middle East.

Kuwait e-Grocery Annual GMV

Covid-19 is the core driving force here. Lockdown and infection risk made online groceries a virtual necessity at the start of last year, creating a captive consumer base. The familiarity with online channels that emerged was enough to sustain ecommerce momentum as a whole through last year – spilling heavily into e-groceries.

No doubt, all of the Middle East saw an e-grocery boost. Both the UAE and KSA doubled their e-grocery segments in 2020, according to a separate RedSeer report from October last year. That said, the near 500% jump in Kuwait has made it the feature story for the region.

A key factor here is that consumers in Kuwait stuck with the online channel despite a change in circumstances – more so than their regional peers. In response, a number of new e-grocery players – Drops, TONS, Carrefour and Deliveroo – upped their game to compete with existing e-grocery stalwarts such as Jumla, Sinbad, Talabat and LuLu.

Kuwait e-grocery penetration passes KSA

“These new players were the catalyst for rapid growth, as they brought variety, better delivery experiences, and improved their last mile logistics capabilities,” noted Ganediwalla. As a result, Kuwait has surpassed KSA when it comes to e-grocery market size and penetration, and is comparable to the UAE in terms of segment maturity.

Average order values are also on the incline, which combines with a strong customer base to deliver a revenue boost. “We anticipate that this growth will continue as consumers have shown an increased level of stickiness that will last beyond pandemic related factors,” said Ganediwalla.

As the market touches new highs, there is some room for improvement to sustain growth momentum. Common ‘pain points’ in Kuwait’s e-grocery segment include long delivery times and product unavailability. “E-grocery players that address the pain areas will grow faster than the market.”