Dubai: In 2020, UAE residents spent more when they did their supermarket shopping online as compared to when they made their purchases at an outlet, according to Network International, the leading enabler of digital commerce across the Middle East and Africa (MEA).
The payments company reports that the overall average transaction value (ATV) of an ecommerce basket among UAE residents in 2020 was 40 per cent greater than that of point of sale (POS) transactions at supermarkets. The increase can be attributed to a shift in consumer behaviour following COVID-19 lockdown restrictions with safety concerns and convenience, prompting a growth in online and contactless purchases.
The past year has fundamentally transformed one of our biggest weekly chores driving a significant portion of the population to do their supermarket shopping online. Looking ahead, it’s clear that an increasing number of consumers may continue to shop from the comfort and safety of their homes, appreciating the convenience that ecommerce and contactless transactions can bring them.
The maximum difference between ecommerce and in-store transaction values was recorded in November with online ATV at Dh279, more than double that of POS at Dh138. In contrast, average ecommerce basket value at the early stages of the outbreak in March at Dh294 stood 45.6 per cent higher than POS at Dh202.
Online supermarket spending
The rise in ecommerce ATV was accompanied by a 93 per cent surge in overall online supermarket spending volume in March during the lockdown period, and further increased post lockdown as residents preferred to remain cautious and stay at home to avoid contracting the virus.
However, the increase in spend dipped to 85% in April as frustrated residents complained about facing weeks-long delays in deliveries while retailers struggled to tackle the logistical challenges of the unprecedented demand for deliveries as online orders soared, before jumping upward to 114 per cent in May and on to 280 per cent and 152 per cent in November and December respectively. The growth was aided by the accelerated adoption of e-grocery start-up platforms and mobile applications[2] as well as the rapid pivot made by food delivery[3] and ride hailing apps[4] to include groceries and other essentials as part of their offering.
In parallel, POS spending volume among UAE residents consistently declined, from 32 per cent in March to 10 per cent in May, further falling into negative territory, at 6 per cent in June and 12 per cent in December respectively, signalling the increased dependence on digital and contactless commerce, and a likely permanent shift in customer behaviour.
Higher contactless spending
Contactless spending volumes also climbed since lockdown, up by 53 per cent in March and increasing further to 64 per cent in December while regular transactions were down by 54 per cent in the last month of the year.
“The past year has fundamentally transformed one of our biggest weekly chores driving a significant portion of the population to do their supermarket shopping online. Looking ahead, it’s clear that an increasing number of consumers may continue to shop from the comfort and safety of their homes, appreciating the convenience that ecommerce and contactless transactions can bring them,” said Nandan Mer, Group CEO of Network International.
