Will groceries be the next big thing in MENA?

MAGNiTT News 1 year ago - Sun, Apr 28, 2019, 6:40 AM

Will groceries be the next big thing in MENA?
Author: MAGNiTT

Press Release 


Milk, eggs, bread or Mexican avocados – groceries is every household’s weekly & monthly requirement. On the other hand, doing groceries has always been a very hectic process, especially the high-basket shopping done at big grocery-chains across the region.

In the words of Christina Berta (COO, Naspers), “grocery has been the slowest category to move online, despite being the most important in the day-to-day life of just about any consumer in the world.” Surprisingly, this lag is not due to consumer adoption but more due to lack of service delivery under a sustainable model. Figuring out the mechanics of delivering low-margin perishable goods under time-sensitive logistics is tricky and hard.

In recent years, the online grocery vertical has seen massive attention from global giants such as Google, Amazon, Walmart, Alibaba and other regional players. As the wave has begun globally, this transformation needs to hit MENAPT region’s grocery vertical too, unlocking value for the local consumer.         

Suncart, a fast-growing grocery venture in Qatar, is specifically focusing on the experience of bulk grocery shopping done at big grocery chains across the region. The venture has mobile apps [iOS & Android] where users can order groceries, in same-day or next-day delivery slots, from one of the largest grocery chain in Doha, Lulu Hypermarket. The app features over 10,000 grocery items including fresh fruits, vegetables, household items, personal care, baking & cooking, baby, pet care & many more. While placing the order, users can select from 5 delivery slots for Same-day or Next-day delivery (i.e: delivery slots: 12pm-2pm, 2pm-4pm, 4pm-6pm, 6pm-8pm, 8pm-10pm) and can pay through COD or Paypal.

AOV is King!

Given the sharp margins in groceries, high basket-sizes and large order-values are critical to build a sustainable grocery venture. We believe that maximizing Average Order Value (AOV) is paramount for any grocery delivery venture. Some weeks back, we were fortunate to deliver our largest order to-date - 7 trolleys worth QR 4,255 (USD 1,165). We learned that people are willing to completely shift their grocery shopping on-to online channels, if catalogue range, sharp pricing and reliability is demonstrated.

Going Bananas!

When we were starting Suncart, the biggest feedback we received was that people might order non-food or packaged food but will never order fresh fruits, vegetables or meat online. To our surprise, 18 out of the top 25 items sold on the app, are from the Fruits & Vegetables category. People have become comfortable with the high-quality fruits & vegetables sourced & delivered through Suncart’s partner. Philippine Bananas are topping the leader-board, as below! ☺

All over Doha!

Groceries is the most basic consumer need, and we believe that delivery coverage should be prioritized for all areas & customers in a city. We are proud that Suncart is the only grocery delivery venture, which is servicing Doha & its surrounding municipalities from Day 1. Though up-scale areas like Pearl Qatar (A) or West Bay (B) had seen the highest order density, the service is also seeing great demand from Doha downtown areas (D) and various family compounds all over Doha, especially in Duhail (C). Further, Western, Qatari & Indian females (60%) dominate the user demographics, though men are also strong users in the mix.

Delivery heatmap of the last 3000+ orders

  

Like ride-hailing & food delivery, grocery delivery services are emerging as an essential part of consumer lifestyle within the MENA region & in near future, we will see a massive uptick in online grocery shopping. Suncart is incubated in Qatar Science & Technology Park and has several backers including likes of Khalifa Saleh Al Haroon.


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