Two small online grocery stores have launched in Dubai just as LuLu Hypermarket, one of the biggest regional supermarket players, rethinks plans to offer food delivery via the internet.
Supermart.ae and Trolley.ae, both run by independent entrepreneurs, have started delivering groceries to customers in South Dubai, offering thousands of items through the click of a button.
But LuLu, which was considering setting up a grocery website, said yesterday it would now focus on launching an online delivery store for electronics and household goods because food was not yet a cost-effective business model.
"People are looking for something that makes their life easier," said Omar Awwad, the chief executive and founder of Trolley.ae. "All grocery stores are considering similar websites," he added. "All are 'considering', but no one is 'doing'."
Over the past decade, online shopping has become big business for well known supermarkets in Europe, such as Tesco and Wal-Mart's Asda. But the sector has been slow to catch on in the UAE.
Online sales of electronics goods, fashion and household goods, areas that require less logistical planning than fresh food, have also not seen the rapid growth of other parts of the world.
Despite the relatively small size of the e-commerce market in the Gulf, it is expected to grow dramatically over the next four years.
Data from Euromonitor shows spending online will hit US$2.09 billion (Dh7.67bn) by 2016 in the Gulf, more than double the $1.01bn spent last year.
In the UAE, specifically, consumers spent $226.8 million online last year, which is expected to grow to $270.9m this year, Euromonitor predicts.
In July, LuLu plans to launch a website selling tablets, smartphones and televisions at prices lower than in its stores.
The company has not ruled out online grocery delivery completely, V Nandakumar, a spokesman for LuLu said. "We are, as of now, primarily known as a proper hypermarket, offering a large range of products. Our advantage is our locations and network," said Mr Nandakumar.
"We have found that shoppers here still consider shopping very much part of their daily activities," he added. "They like the touch and feel of food shopping."
Both Supermart.ae and Trolley.ae now deliver to customers in Dubai Marina, Al Barsha, Discovery Gardens and the Palm Jumeirah.
Trolley.ae plans to begin covering the whole of Dubai in the next six months and will then set up operations in Abu Dhabi, before aiming to expand the concept to the rest of the Gulf.
Trolley.ae uses a small fleet of cars to deliver from its warehouse in Umm Sequim. It buys from a number of suppliers, as well as a large hypermarket partner. Mr Awwad would not disclose the name of the hypermarket.
"It's the convenience we are focusing on," he said. "Our prices are like other stores but we are not targeting customers who are looking for cheap prices."
Supermart.ae has a small supermarket called Edelweisse in Jumeirah Lakes Towers and a warehouse at the back from which it delivers groceries.
"When you want to go shopping, you have to find a parking space, carry bags to your home, so we have made it easier," said Heidar Jouyaeian, the founder of Supermart.ae.
"You click and it's delivered to your door."
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