Online share in FMCG sales has been growing all over the world, reinforced during COVID times in 2020 and 2021 and increasing even in mature countries. E-commerce appears to have become the foundation for future growth in the UAE and Kingdom of Saudi Arabia (KSA).
NielsenIQ data indicate that the e-commerce channel in the UAE has grown by 68% over the last 12 months, and by 58% in Saudi Arabia. With this strong double-digit growth across both markets FMCG online sales have reached SAR1.8 billion in KSA, representing 2-4% of overall FMCG space. In the UAE e-commerce has an even higher share at 4-6% of a market size of AED1.5 billion.
Whilst hypermarkets and supermarkets are facing a drop in visit frequency this year, the online channel is clearly one not-to-be-missed. If in the past one could have wondered if shoppers will ever use the online channel, now the critical question is how frequently they shop, how much do they spend etc.
“Online shopping penetration and sales are still rising strongly in the region even in the post-pandemic sequence. With this appetite from consumers and retailers’ initiatives we are seeing big opportunities and obvious signs for further growth,” said Andrey Dvoychenkov, General Manager Arabian Peninsula & Pakistan at NielsenIQ.
Every FMCG department has shown double-digit growth in e-commerce this year going from +39% for personal care to +89% for laundry products in Saudi Arabia. In the UAE, frozen food grew the fastest (+112%) while homecare showed the weakest growth still at +50% vs 2021. Drain cleaners appear to be number one in KSA growing by 127% online despite a drop of –4% overall in the country. In the UAE, juice milk drinks are the number one growing online (+176% vs last year) but also growing across the country with a strong +29%.
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