LuLu's getting more than just a taste of online after decisive deal with Amazon for grocery orders. Image Credit: Supplied

Dubai: The LuLu Group will retain its own online grocery services even as the retailer adds more cities in the UAE and Saudi Arabia as part of its new alliance with Amazon. It was last week that LuLu opened a new online channel for grocery sales with Amazon, with the trials taking place in Dubai ahead of a full launch in a month.

“Grocery already makes up more than 60 per cent of sales through LuLu’s online platform,” said Ashraf Ali M.A., Executive Director at LuLu Group. “Through Amazon, we are opening up new possibilities for shoppers to access a dominant part of our stocks.

"Our target for LuLu online is 20 per cent of the Group’s annual turnover. It’s only been four years since we launched, and this deal with Amazon will take us faster to that 20 per cent." - Ashraf Ali M.A., Executive Director at LuLu Group Image Credit: Supplied

After Dubai, other cities will be brought into the LuLu-Amazon coverage, while extending it to Saudi Arabia will happen ‘soon enough’. “The Amazon tie up will in time be extended to other Gulf markets,” said Ali.

Online grocery sales remain a dominant category within the wider ecommerce space in the UAE. The other dominant marketplace noon has had grocery options for some time now, while this space is also occupied by niche operators and even by delivery service providers through their ‘dark store’ networks. (Dark stores are where these service provides maintain a limited stock of the most in-demand stocks and deliver within 30 minutes or so.)

“Going bigger in grocery plays to our strengths – we have the sourcing arrangements for our hypermarkets and online channel,” said Ali. “That means we have the ‘first-mile’ secured. The stocks come directly to our fulfilment centres and that takes care of the ‘second-mile’.

“Amazon gets the orders and uses its own networks to follow through with the delivery, which is the 'last-mile'. All of this can be done seamlessly, which is why we are so confident of a sizeable boost in online sales.

"Both of us - Amazon and Lulu - have come up with a win-win deal, and one which would help our client base."