UAE start-ups take on might of the big grocery stores with online retail
Online grocery shopping is moving down the food chain as smaller start-ups take on the big hypermarkets in the battle to win the shopping baskets of millennials.
El Grocer officially launched in January with groceries reaching app users in Dubai in less than one hour. It is currently working with 30 stores across 45 communities in Dubai and expects the app to have penetration throughout the entire city by the end of May.
QuickShop.ae is a mobile app that started in November and has more than 100 stores already signed up.
It teams up with the closest convenience store to your home and allows people to order various basket sizes from the weekly shop and have it delivered within the hour.
“We have seen a real desire from shops and shoppers for our app,” said Alan Colgan, the sales director for QuickShop.ae. “We are tuning into millennials and those that are time-poor. We have plans to open in Abu Dhabi imminently. Branded convenience stores are now spreading throughout the UAE and we offer a valuable service for the retailer and the customer. The information we gather can be used by the shops to increase basket sizes and it’s a brilliant resource for shoppers as you can track the status of your deliveryman so you know exactly when your shopping will be delivered.”
Another operator that has noticed the increasing need for online delivery is trolley.ae. It started four years ago in Dubai with two refrigerated trucks. It now has a fleet of 16 refrigerated trucks and carries more than 90,000 products in its warehouse with expansion plans beyond the UAE’s borders.
“We will be opening in Abu Dhabi in the next six months, we are looking for a suitable warehouse right now,” said Omar Awwad, the chief executive of trolley.ae. “In the next three years we will open in three cities in Saudi Arabia and in Qatar. We have found that once people are comfortable with the quality of our products, especially the fresh produce, and understand the ease of the delivery method, they are locked into our service. Seventy five per cent our market right now is repeat business.”
The arrival of independent online grocery operators in the Emirates represents a new front of competition, with larger competitors such as Lulu and Geant that are also offering deliveries over the web.
Lulu has expanded its online service as an omni channel convenience, while Geant started its online delivery service in 2013.
It was expected to start its online service in Abu Dhabi last September but this has not yet happened.
“I think the online delivery charges are too low in the UAE,” said Brian Fletcher, the head of e-commerce for Geant. “We deliver free for basket sizes over Dh100, in the UK you have to spend Dh225 to ensure free delivery. I think the awareness of the ease of our service is not what it should be and the mall- centric habits of shoppers is also an inhibitor to the space.”
Follow The National’s Business section on Twitter
Updated: May 1, 2016 04:00 AM