Food and Drink E-Commerce in the United Arab Emirates

PROSPECTS

Excise taxes impact category

The excise taxes on carbonated drinks (excluding sparkling water) and energy drinks, are impacting the food and drink category. In October 2017, the UAE began taxing soft drinks, energy drinks and tobacco as an effort to curb over consumption.

Tech-savvy consumers will fuel the category

The high percentage of the UAE’s highly-connected and digitally-savvy consumers is expected to be a boon for this category throughout the forecast period. The increasingly fast-paced tempo of life, where people work longer hours and have fewer hours devoted to shopping, the convenience of food and drink e-commerce is very compelling.

Sales of alcoholic drinks online gain traction

Compared to its more conservative neighbours in the Gulf, the UAE is fairly liberal with allowing bars, clubs and restaurants to offer alcohol. However, strict censorship of advertisements and limits to physical retailers stymies the growth of this category.

COMPETITIVE LANDSCAPE

Niche players gaining steam

Certain smaller companies such as Kibsons for fresh produce in the UAE are growing in popularity as this is the trendy way to get food items for millennials. These types of players dominate in the perishable category because people prefer to go to players who specifically specialise in this category.

Meal kits become fashionable

The appeal of meal kits is that they cut down time for busy consumers who want to eat home-made foods without having to do grocery shopping and all the preparation. Meal kits in the UAE, sometimes referred to as food kits, are especially popular when catering to more healthy and nutritious meals.

Amazon dominates in non-fresh food grocery

Souq.com became Amazon.

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