Online grocery sales in Middle East increased during the coronavirus pandemic, and the trend may stay, according to a retail executive.
Supermarket operator Carrefour’s online orders rose by 917% in Saudi Arabia from January to June this year. Meanwhile, the United Arab Emirates and Egypt recorded increases of 257% and 747% respectively over the same period.
“Online has been ... soaring since the start of Covid, although we have been growing before,” said Alain Bejjani, CEO of retail giant Majid Al Futtaim.
“There’s been a fantastic surge across the region,” he told CNBC’s “Capital Connection” on Tuesday.
Bejjani said the trend may continue beyond the pandemic, mentioning a survey held by consulting company McKinsey.
Findings showed that grocery delivery was up by 31% among users in the UAE, with 66% saying they want to still use the service even after the pandemic ends. Similar figures were seen in Saudi Arabia, according to McKinsey.
“We’re seeing about ... 200% to 220% increase in the number of online customers on average across the region, and this is something that’s extremely promising,” Bejjani said.
He noted that the recovery has been “better than expected” across the region. There has been a “steady return” of consumers and a recovery since early June, though malls are still accommodate fewer customers compared to a year ago. Shoppers are also reportedly “much more value-conscious” now.
He said that the sectors that are the slowest to recover are hotels, cinemas, and the aviation industry.
According to data compiled by Johns Hopkins University, the coronavirus pandemic has infected more than 18.1 million people and killed at least 691,738. Iran, Turkey and Saudi Arabia have been the hardest hit in the region.
Bejjani stressed that returning to pre-pandemic levels is likely to happen only when a Covid-19 vaccine is available.
“When it gets to business impact, I think 2022, hopefully, will be a year that will be similar to where we were in 2019,” he said.
He predicted that the “big issue” will be economic security and consumer confidence once people learned to live with the virus.
“At the end of the day, this is a crisis of trust,” he said. “For people to come back and consume, they need to have faith, we need to have a consumer confidence level that’s at a much better rate.”
Online shopping in Southeast Asia
Like the Middle East, Southeast Asia also witnessed a growth in the online shopping sector.
The rise of online shopping in Southeast Asia is attributed to constant buying of groceries and other essential items, based on the research of consultancy Bain & Company and Facebook.
A new report from the two firms revealed that the coronavirus outbreak gave a boost to e-commerce and other digital trends across the region. Over 7 million people worldwide were infected by Covid-19.
“Some of these trends are here to stay,” Praneeth Yendamuri, a partner with Bain & Company based in Singapore.
“One of the trends we identified was essential online shopping, and that’s here to stay,” he said during an interview on CNBC’s “Street Signs."
Yendamuri pointed out that the online groceries is a huge category that is relatively under-penetrated because of logistics and other issues.
However, data showed that the sector increased by almost three times during the outbreak in Southeast Asia. One in three respondents said they planned to still purchase their groceries over the internet in future, the report says.
