Saudi Arabia Online Grocery Market

Saudi Arabia Online Grocery Market Size and Share:

The Saudi Arabia online grocery market size was valued at USD 1,543.7 Million in 2024. Looking forward, IMARC Group estimates the market to reach USD 5,925.7 Million by 2033, exhibiting a CAGR of 15.87% from 2025-2033.  The market is primarily driven by digital transformation, implementation of Vision 2030, and increasing internet penetration, resulting in significant expansion of the e-commerce sector across the region.

Saudi Arabia's online grocery market is experiencing significant growth due to a combination of technological advancements, changing consumer behaviors, and supportive government policies. For instance, in November 2024, Landmark Group, a leading retail and hospitality conglomerate, announced plans to invest $1 Billion over the next three years to expand its operations across the GCC, India, and Southeast Asia. The initiative includes opening 400 new stores and enhancing its e-commerce, supply chain, and technology infrastructure, building on its annual revenue of over $7 Billion in FY 2023-2024. The expansion will increase its retail footprint by 20% by 2028, with VIVA set to launch in Saudi Arabia in 2025.

Moreover, the proliferation of smartphones and high-speed internet access across the nation has made online shopping more accessible, allowing consumers to browse, compare, and purchase groceries with convenience. Besides, urbanization and the rise in dual-income households have also contributed to the growing preference for online grocery shopping. Busy lifestyles and the need for time-efficient solutions have led to a surge in the adoption of these platforms, offering the convenience of home delivery and a wide variety of products. Moreover, the COVID-19 pandemic accelerated the shift toward e-commerce, as health concerns and movement restrictions pushed more consumers to explore online shopping options.

Saudi Arabia Online Grocery Market Trends

Increasing Internet Penetration:

According to the Saudi Press Agency (SPA) published article on 3 May 2024, the Communications, Space and Technology Commission (CST) released the Saudi Internet Report 2023, highlighting that internet usage in Saudi Arabia has reached 99% of the population. Additionally, internet access is nearly equal between genders, with 99.3% of males and 98.5% of females using online services. The report analyzed user habits, revealing that 52.3% of users spend seven or more hours online daily, with 84.7% accessing it from home, 72% while on the move, and 43% at workplaces. Besides, peak usage occurs between 9 PM and 11 PM, with Friday being the busiest day, and December 2023 witnessing the highest annual activity. This widespread digital connectivity has set the stage for advanced technological adoptions and has significantly influenced consumer behaviors. Furthermore, with internet access almost universal, digital services and online platforms are witnessing higher engagement rates across the region.

Significant E-commerce Expansion

E-commerce revenues in Saudi Arabia are projected to reach SR260 Billion by 2025, according to Minister of Commerce Dr. Majed Al-Qasabi. The minister also noted that over 50 Million e-commerce shipments entered the country in 2023, with 190 Million orders fulfilled through delivery apps in 2022. This rapid growth is fueled by the increasing comfort and preference for online shopping among the Saudi population. The expansion is supported by improvements in digital payment systems and logistics frameworks, making online purchasing more accessible and reliable. Besides, the entry of global and regional e-commerce players has intensified competition, driving innovations in customer service and delivery, thus enhancing consumer trust and spending in online transactions.

Supportive Government Initiatives

The Saudi government's Vision 2030 is a strategic framework aimed at reducing the country's dependency and diversifying its economy by developing public service sectors. A central component of this vision is the promotion of digital transformation, which has catalyzed significant growth in sectors like online grocery shopping. As per the Kingdom of Saudi Arabia, Vision 2030 prioritizes digital transformation, aiming to significantly reduce cash dependency by targeting a 70% non-cash transaction rate by 2025. This shift reflects changing consumer habits and policies designed to foster a cashless society. Key efforts include introducing advanced payment technologies, promoting digital wallets, and enhancing regulatory frameworks to encourage digital payment adoption. Programs such as Mada, the national payment network, and the SADAD system have streamlined e-payment processes across sectors. Besides, government incentives and collaborations with fintech firms have driven the adoption of cashless solutions, enabling industries to efficiently manage diverse digital transactions. These efforts are crucial in modernizing the business landscape and encouraging a shift toward more innovative, technology-driven economic activities.

Saudi Arabia Online Grocery Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Saudi Arabia online grocery market, along with forecasts at the country levels from 2025-2033. The market has been categorized based on product type, business model, platform, and purchase type.

Analysis by Product Type:

• Vegetables and Fruits
• Dairy Products
• Staples and Cooking Essentials
• Snacks
• Meat and Seafood
• Others
   

The report has provided a detailed breakup and analysis of the market based on the product type. This includes vegetables and fruits, dairy products, staples and cooking essentials, snacks, meat and seafood, and others.

Vegetables and fruits hold a significant share due to the rising demand for fresh, organic produce among health-conscious consumers. Additionally, the convenience of sourcing seasonal and exotic fruits online further boosts its popularity, supported by competitive pricing and delivery efficiency. Besides, dairy products remain a crucial segment, driven by consistent demand for milk, cheese, yogurt, and other staples. Furthermore, the easy availability of branded and locally sourced dairy items, coupled with discounts and subscription models, enhances its appeal among urban households across the region.

Analysis by Business Model:

• Pure Marketplace
• Hybrid Marketplace
• Others
   

A detailed breakup and analysis of the market based on the business model have also been provided in the report. This includes pure marketplace, hybrid marketplace, and others.

The pure marketplace model in Saudi Arabia’s online grocery market connects buyers directly with sellers through digital platforms, allowing vendors to list products while the platform facilitates transactions. This model benefits from lower operational costs and scalability, making it attractive for startups and small businesses. Besides, the hybrid marketplace model combines elements of direct selling and third-party vendor services. Along with this, companies operating under this model maintain their inventory while allowing external vendors to sell on their platform, ensuring product availability and quality control. This approach is gaining traction among larger retailers seeking to enhance customer satisfaction and expand their offerings.

Analysis by Platform:

• Web-Based
• App-Based
   

The report has provided a detailed breakup and analysis of the market based on the platform. This includes web-based and app-based.

Web-based platforms cater to users accessing grocery services through websites via desktops or mobile browsers, appealing to older demographics and individuals seeking a detailed view of products. This segment benefits from its user-friendly interfaces and compatibility with larger screens. Moreover, app-based platforms are driving market growth due to their convenience, push notifications, and personalized experiences. Furthermore, mobile applications are particularly popular among younger consumers and urban users owing to the proliferation of smartphones and mobile payment solutions, offering seamless and faster shopping experiences.

Analysis by Purchase Type:

• One-Time
• Subscription
   

A detailed breakup and analysis of the market based on the purchase type have also been provided in the report. This includes one-time and subscription.

One-time purchases cater to customers who prefer flexibility, allowing them to shop as needed without commitment. It remains a dominant choice for occasional shoppers or those purchasing specific items, contributing significantly to market revenue. This segment also benefits from promotions and discounts offered during peak seasons, attracting price-conscious consumers. Moreover, subscription services are gaining traction due to their convenience, offering regular deliveries of essential groceries. These services appeal to busy households and working professionals, providing cost-saving benefits and consistency in supply, aligning with the growing preference for time-efficient solutions across the region.

Regional Analysis:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Northern and Central Region, Western Region, Eastern Region, and Southern Region.

The Northern and Central region encompassing key areas like Riyadh, drives a significant portion of Saudi Arabia's online grocery market. This region benefits from a dense population, high internet penetration, and a tech-savvy consumer base. The capital city, Riyadh, serves as a hub for digital commerce, contributing heavily to market revenue. Besides, the Western region, including Jeddah and Mecca, is another prominent contributor, leveraging its urbanized infrastructure and increasing e-commerce adoption. The region’s affluent population, along with the influx of tourists and pilgrims are escalating the demand for online grocery services. Besides, retailers are widely targeting this area due to its growing customer base and robust logistics network.

Competitive Landscape:

At present, key players in Saudi Arabia's online grocery market are implementing several strategies to strengthen market growth. They are investing in advanced technologies like artificial intelligence and data analytics to enhance user experience and streamline operations. Moreover, companies are expanding their product offerings to include fresh foods, household products, and personal care items, catering to diverse consumer needs. Besides, collaborations with local suppliers and farmers ensure a steady supply of quality products. Furthermore, firms are optimizing logistics networks and offering multiple payment options, including pre-delivery online payments and cash on delivery to improve delivery efficiency. These initiatives collectively contribute to the robust growth of the online grocery sector in Saudi Arabia. For instance, in January 2024, HungerStation, a leading Saudi Arabia online food ordering platform, became the first domestic company to launch food delivery services in Neom, as announced in a company statement. This initiative aims to meet the needs of Neom’s residents and workers. HungerStation will utilize electric and hybrid vehicles to deliver food and household products, aligning with Neom's zero-carbon objectives.

The report provides a comprehensive analysis of the competitive landscape in the Saudi Arabia online grocery market with detailed profiles of all major companies.

Latest News and Developments:

• In February 2024, Egyptian discount retailer Kazyon entered the Saudi market by acquiring a 50% stake in Dukan, Saudi Arabia’s only discount grocery retailer. Facilitated by EFG Hermes, this marks Kazyon’s continued regional expansion following its entry into Morocco in 2023. Dukan, operates over 100 stores across Jeddah, Makkah, and Al Taif, with plans to expand into Riyadh. Al Dabbagh Group retains the remaining 50% ownership, while Kazyon now boasts a significant presence in the MENA region, with over 1,000 stores across Egypt and Morocco by the end of 2023.
• In November 2024, Dingdong Maicai, a Chinese e-commerce company, known for its fresh grocery offerings, has begun its expansion by entering the Saudi Arabian market. The company will focus on ready-to-eat (RTE) meals alongside fresh produce, refrigerated items, and household products. Following a strategy similar to Meituan, another Chinese firm that debuted internationally in Saudi Arabia, Dingdong Maicai is building a localized team and recruiting for roles in product management, operations, customer service, sourcing, and government relations, with several positions based in Riyadh.

Saudi Arabia Online Grocery Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia online grocery market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia online grocery market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia online grocery industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.