When the UAE initiated a strict lockdown to combat the spread of coronavirus earlier this year, one of the immediate casualties of the move was the brick-and-mortar retailer. “Going to the mall on the weekend has long been a part of the culture in the UAE,” said Shireen El Khatib, CEO of Majid Al Futtaim Shopping Malls, during last week’s Wired: Regenerating Retail webinar. She added that the first few weeks of lockdown were a shock to physical retailers — something El Khatib is intimately familiar with, given that MAF operates 27 malls and franchisees such as Abercrombie & Fitch and Hollister.
Meanwhile, Wamda Research Lab’s 2019 Online Grocery Retail in Mena report, published before Covid-19 was making headlines, points out that Middle East and North Africa (Mena) e-commerce market was worth $8.3 billion (Dh30.5 billion) in 2019. The report highlights trends across the region had already been very favourable to e-grocery shopping — a situation amplified by the coronavirus.
What are people ordering?
“When Covid-19 hit, it reminded everyone that consumer habits and needs can quite literally change overnight,” Mo Yildirim, Managing Director of talabat UAE, tells GN Focus. His platform, which started out as a meal delivery aggregator connecting hungry consumers to restaurants, expanded into the promising e-grocery space earlier this year with the launch of its Daily by talabat service. Apart from Daily, which sees talabat deal directly with suppliers, the platform is partnered with about 60 supermarkets and 250 specialty stores.
When Covid-19 hit, it reminded everyone that consumer habits and needs can quite literally change overnight.
During the pandemic, talabat users (primarily Arabs and Western expats aged 20-40, according to Yildirim) have spent most of the money on the necessities: water and milk, as well as fresh fruits and vegetables. “With more home cooking and seeing a rise in home-made dishes, we noticed an increase of demand for the best and healthiest products,” explains Yildirim. “The demand for immunity-boosting products and fresh foods increased significantly in Dubai, and this change in trends was reflected in the orders placed on the platform.”
Speedy deliveries a priority
With curfews in place, the UAE government encouraging people to stay home, movement permits and fears about Covid-19, residents were unable or unwilling to visit busy supermarkets for their grocery shopping. “We wanted our users to rest assured and benefit from the convenience that Daily offers as an alternative to traditional grocery shopping, knowing that orders would be delivered within 30 minutes or less.”
Indeed, speed of delivery is the main concern for many residents when it comes to essential purchases such as groceries. “Our research showed that speed of delivery (not price) was the most important criteria for e-grocery customers while shopping online during the Covid-19 period,” Sandeep Ganediwalla, Managing Partner at consultancy RedSeer MEA, told Gulf News earlier this month.
Looking beyond groceries, several other categories have done well online during Covid-19. According to figures from RedSeer, online demand in the fashion space shrunk by 25 per cent through the pandemic, while e-commerce electronics sales grew 10 per cent - something that may have been driven by UAE students and white-collar professionals working from home. “There has been a notable increase in the past two weeks, with a lot of sales coming in for laptops and tablets,” a Sharaf DG staff member told Gulf News in March. “Many parents started visiting the store and buying the devices after the schools were shut.”
