How Covid-19 has revamped the online grocery shopping space

The stay-at-home protocol activated across countries to combat the spread of the virus has proven to be a game changer for the online shopping sector



In the aftermath of the Covid-19 infection, a lot has changed.

Several months after the virus strain first appeared in Wuhan, capital of China’s Hubei province, the world continues to battle the pandemic that has swept across continents and has claimed more than 300,000 lives.

As nations enforce lockdowns and activate stay-at-home campaigns, several industries are toiling to stay afloat. However, the recent social restrictions have, in effect, accelerated the growth and adoption of the online grocery concept. Considered one of the most underpenetrated sectors amid the larger e-commerce spectrum, e-grocery has taken an unprecedented flight.

Prior to the Covid-19 spread, the e-grocery market was worth $200m in the GCC and Egypt, constituting less than 1 per cent of the e-commerce industry. Only 27 per cent of consumers in the Middle East and North Africa (MENA) region were keen to order groceries online, 58 per cent still preferring to buy groceries at physical stores, according to Wamda’s 2019 Online Grocery Retail in MENA report.

But social distancing (and confinement) has seen online grocery shopping go mainstream.

US-based grocery delivery apps have seen a staggering number of downloads, according to data revealed by app intelligence provider Apptopia. On March 15, the download of the Instacart, Walmart Grocery and Shipt apps witnessed a surge of 218 per cent, 160 per cent and 124 per cent, respectively, compared to the average daily downloads in February.

Regionally, online grocery players are also stepping up their game, some adding to their fleet while others are raising capital. In March, Saudi-based online grocery app Nana raised $18m in funds to support the company’s expansion in times of heightened demand in the aftermath of the Covid-19 outbreak. By the end of 2020, the company strives to deliver 100,000 orders every month to Saudi-based consumers.

“Nana is helping Saudi Arabia deal with the breakout of coronavirus and has seen a big increase in user numbers. We are hoping this will accelerate the shift to online grocery shopping in the region,” Bloomberg reported, citing Ahmad AlShammari, a principal at venture capital fund STV, which led the funding.

In late March, Saudi online retailer BinDawood Holding – which operates two e-commerce platforms BinDawood and Danube, connected to their respective supermarket and hypermarket chains – claimed that since the Covid-19 crisis, its average sales on a 10-day basis had increased by 200 per cent, average order value rose by 50 per cent and app installations spiked 400 per cent.

In the UAE, retail conglomerate Majid Al Futtaim temporarily reassigned more than 1,000 employees from its other business divisions to Carrefour to meet increased demand at its physical and online stores. In the first three weeks of March, Carrefour recorded a staggering spike in regional customer demand as daily online sales soared by 50 per cent compared to the same period in February.

Meanwhile, to encourage residents to stay indoors during the current crisis, food delivery platform Talabat has extended its free-delivery grocery service to 24-hours a day and increased its coverage across Dubai. Also, UAE-based healthy meal delivery service Theo’s Point has initiated a new grocery delivery service locally. Deliveries will be furnished within 48 hours upon placing an order via its contactless process.

As the coronavirus eventually peaks and hopefully wanes, brick and mortar grocery shops will pick up pace, but some behavioural habits are expected to linger on. With the region’s growing digital comforts, ordering groceries online, similar to ordering dinner, may soon be the new normal.