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THE RISE OF FOOD DELIVERY MARKET IN THE MIDDLE EAST

Measureable AI , May 12, 2021

Source:
https://blog.measurable.ai/2021/05/11/the-rise-of-food-delivery-market-in-the-middle-east/

The Rise of Food Delivery Market in the Middle East

When it comes to consumer behavior under the pandemic, nothing has been too
different all around the world now. The war among food delivery companies that
we have seen in many regions is also happening in the Arab world. According to
Measurable AI’s transactional e-receipts data, the overall food delivery market
in the Middle East has doubled its revenue size in 2020.

Food Delivery is the New Oil

We chose a few representative countries with high levels of food delivery
penetration, and the rate of growth is astounding. Saudi Arabia has the highest
growth rate of food delivery revenue among all countries in 2019-2020, ranking
first in the Middle East with over 170 percent. Furthermore, the UAE, Bahrain,
Kuwait, and Qatar are experiencing double-digit growth in food delivery revenue.

The two pie charts below show changes in the market for food delivery revenue
from the Middle East between 2019 and 2020. Talabat (owned by DeliveryHero) is a
market leader, accounting for 69% and 55% of the Middle East market revenue in
2019 and 2020, respectively. It’s worth noting that another player Mrsool has
also benefited significantly from its rapid market expansion in Saudi Arabia.
UberEats, on the other hand, announced its exit from the Middle East market in
May 2020, handing over to local player CareemNow.

Let’s move to specific metrics of consumer behavior in the food delivery market
in the Middle East. The following table below shows the market distribution of
merchants, as well as their average order price and delivery fee. In most
countries, Talabat’s order price and delivery fee are relatively low when
compared to other merchants. Mrsool, however, charges a higher order price and
delivery fee in Egypt and Saudi Arabia than other players, reaching as high as
US$5.7 per order in Saudi Arabia.

Looking into Saudi Arabia and UAE

Following an examination of the Middle East market as a whole, we want to take a
closer look at two markets: Saudi Arabia and the United Arab Emirates.

Mrsool, HungerStation, and CareemNow all had good growth in Saudi Arabia in
2020. Mrsool’s order revenue in 2020 is more than five times that of 2019.

Its market share has risen from 59 percent in Q3 of 2019 to 77 percent in Q1
2021. Following Mrsool, the runner-up player HungerStation has consistently
occupied approximately 15% of the market since 2019 Q4. CareemNow only
maintained a small cut of the market, but it’s still active.

In the United Arab Emirates, Talabat, Deliveroo and CareemNow have all achieved
revenue growth during the past 2 years. Talabat’s YOY growth in 2020 and 2021 is
extremely high, due to a rise in average order frequency and customer volume.
Deliveroo in UAE has also seen rapid success, steadily establishing itself in
second place since 2020 Q2.

Talabat steadily occupies about 76% of the market. However, in recent months,
Deliveroo is gradually expanding its market occupation.

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