A Guide on Introduction, key drivers and Industry
analysis.
INTRODUCTION
Key factors like rising urbanization, increasing disposable income, the widespread adoption
of online food ordering platforms, and changing consumer preferences are fueling this rapid
expansion. Amidst this international panorama, the Saudi Arabian food home delivery market stands
out as an especially dynamic segment. Valued at $3.95 billion in 2021, projected to generate revenue
of $10 billion in 2023-2024 the Saudi market is anticipated to catapult to $14 billion by 2027, charting
a CAGR of 9.28% from 2024 to 2027. This robust growth in Saudi Arabia is not only aligned with the global trends but also propelled by unique
local factors. The kingdom’s predominantly young population, growing middle class, and an increasing appetite for Western cuisine create a fertile
ground for the food home delivery business. Given these promising indicators, Saudi Arabia is not just catching up with the global curve but, in
many ways, setting new benchmarks for what the future of food home delivery could look like. But as lucrative as the market seems, there are
several challenges and players in the arena that future businesspersons should be aware of.
KEY DRIVERS OF MARKET GROWTH
Online Food Ordering
Technological advances have led to mass adoption of smartphones, making it easier than ever for people to order food online. Consumers
now prefer the convenience of getting a meal delivered to their doorstep rather than cooking or eating out.
Disposable Income
Saudi Arabia’s steady economic growth, with a 2.3% annual GDP increase from 2016 to 2021, has fueled higher disposable incomes. This
is further amplified by a rising female workforce participation rate, which stood at 25.9% in 2021, and a rapidly expanding middle class. These
factors collectively boost the country’s purchasing power and contribute to the growing market for convenience services.
Urbanization
The rapid expansion of cities and increasingly busy lifestyles are creating a bigger demand for quick and convenient food delivery services.
For aspiring entrepreneurs, this spells opportunity.
Industry Analysis
The food delivery industry is a complex and competitive field, influenced by a numerous factors. Saudi Arabia, with its large and increasingly
urbanized population, along with a young, tech-savvy workforce, offers fertile ground for the growth of online food delivery services.
The market is projected to grow exponentially, from $3.95 billion in 2023 to an estimated $14 billion by 2027, driven by the various factors.
The online food delivery market in Saudi Arabia is in its introductory stage, fueled by a growing middle class and increasing urbanization. Expected
to move into the growth stage in the next few years, the market will likely see more competition and technological advancements. Within 5-10
years, it is projected to reach maturity, with market consolidation becoming more apparent. While a decline is not anticipated for many years,
emerging technologies like drone delivery could be disruptive.
CONCLUSION
The expanding e-commerce market in Saudi Arabia represents a compelling tapestry of opportunities and challenges, intricately woven
together by technological advancements, demographic shifts, and evolving consumer preferences. The market is indisputably ripe for both seasoned businesses and new entrants.