Market Trends of Saudi Arabia Delivery Apps Industry
Rise in Smartphone Penetration to Fuel the Growth of the Market
• The rise in smartphone penetration in Saudi Arabia has fueled the growth of the app delivery market, as more people are using their mobile devices to access goods and services conveniently. Companies like HungerStation and Jahez have capitalized on this trend, offering food delivery services with a wide range of restaurant options to choose from. Moreover, grocery delivery apps like Nana Direct and Mrsool have gained popularity, allowing users to order groceries and other essentials easily.
• Ride-hailing apps have expanded their services beyond transportation to include food and package delivery, leveraging their existing infrastructure and customer base. Additionally, delivery service providers like Talabat and Zomato have diversified their offerings to include groceries, pharmacies, and other essentials, catering to the evolving needs of consumers.
• Companies like Delivery Hero have seen increased demand for their delivery services, prompting them to expand their operations and enhance their technology to meet customers' growing expectations. Therefore, the rise in smartphone penetration has transformed the app delivery market in Saudi Arabia, with many companies offering convenient solutions for various consumer needs, driving innovation and competition in the industry.
• The Communications, Space, and Technology Commission (CST) released its report on the usage and penetration of the internet in Saudi Arabia for 2023. According to the report, internet penetration in the Kingdom reached nearly 99% by the end of 2023, up from 98.6% a year earlier.
• Additionally, with the high internet and smartphone penetration, consumer shopping behavior is rapidly changing, thus forcing the e-commerce market vendors to offer innovative shopping apps coupled with various digital payment transaction modes. Such factors are further expected to drive the market in the country as consumers continue to look at the easy and convenient way to shop online using their smartphones. Due to the growing smartphone and internet penetration, major e-commerce vendors such as SHEIN, Noon, and Amazon offer their mobile applications for online shopping in the country.
• Over the forecast period, high internet and smartphone penetration are expected to drive the e-commerce market in the Kingdom at a rapid pace owing to the changing consumer behavior, increasing use of smartphones for online shopping, and fast-speed internet. Moreover, the high internet penetration in the country is expected to enable retailers to connect with potential customers and express their brand in entirely new ways, thus driving the e-commerce market in the Kingdom of Saudi Arabia over the forecast period.
Food Delivery Apps to Witness Rapid Growth
• The food delivery segment in Saudi Arabia is experiencing rapid growth due to several factors, such as increasing internet penetration, changing consumer preferences, and convenience. Companies like HungerStation, Jahez, and Talabat are capitalizing on this trend by offering easy-to-use apps, a wide range of restaurant choices, and efficient delivery services.
• Additionally, the pandemic has further accelerated the adoption of food delivery services as people prioritize safety and convenience. This growth is also attracting investments from both local and international players, further fueling the expansion of the market. Therefore, food delivery apps' convenience, variety, and safety are driving their popularity and growth in Saudi Arabia.
• For instance, in July 2023, Delivery Hero SE acquired all the outstanding minority shareholdings, 37%, in HungerStation Holding Limited, the sole shareholder of HungerStation Company Ltd in Saudi Arabia, which operates Delivery Hero’s Saudi business. The transaction came to a total of USD 297 million.
• The proliferation of smartphones, improved internet accessibility, and the growing digital infrastructure have been pivotal in expanding online food ordering and delivery services in Saudi Arabia. The widespread adoption of mobile applications and online platforms has revolutionized how consumers interact with the food industry.
• Overall, these technological advancements have empowered consumers with the convenience of browsing diverse menus, placing orders, and tracking deliveries with just a few taps on their smartphones. Furthermore, integrating GPS tracking systems enables real-time monitoring of delivery status, enhancing customer transparency and reliability.
