Mena's quick-commerce market to be valued at $47bn by 2030

Food and grocery deliveries will still dominate the sector, but segments such as fashion, beauty and last-mile deliveries are fast catching up

Food deliveries are still expected to dominate the Mena quick-commerce market in the next decade. Photo: UberEats

The Middle East and North Africa region's quick-commerce market is expected to reach about $47 billion by 2030, anchored by an acceleration in the grocery and food delivery categories, according to new research from Redseer.

Q-commerce – also known as on-demand or rapid delivery – is generally defined as the ability to order goods and have them delivered within an hour. It is very much associated and can be interchanged with hyperlocal logistics, which covers a small, specific area where deliveries can take place in as fast as 10 minutes.

The q-commerce market is expected to grow at a compound annual growth rate of 17 per cent in the next decade, with groceries and food delivery still the dominating segments with a more than 80 per cent market share.

But adjacent sector opportunities can help the q-commerce market hit $100bn, the report said.

However, the market split is drastically evolving, with nascent retail categories such as fashion and beauty having the fastest growth and slowly catching up with essentials.

The last-mile delivery, mobility and social commerce categories are front-runners in terms of expected market size and could be leveraged for their synergies with the q-commerce market. E-health, home services, electric charging and parking are all also seen to gain ground this decade.

"Combining q-commerce with sectors that already have the necessary digital infrastructure and consumer awareness in the Mena region expands the market potential for quick commerce to encompass a $100bn opportunity," the research firm said.

Q-commerce has also benefited massively from the rapid adoption of e-commerce globally amid the Covid-19 pandemic. Global e-commerce industry is expected to reach almost $4.9 trillion this year, and would grow by about a third to $6.4tn by 2024, according to Statista.

In the Middle East, the e-commerce market was valued about $17bn in 2020, with $4.5bn coming from the UAE, Statista said. The region is expected to surpass the $27bn mark by 2025.

Total retail spending in the UAE reached $71bn in 2020, placing it in the 14th place globally and the first in Mena for retail spending, according to a recent survey by global consultancy Kearney. The Emirates led with $2,554 in average spending per household, which is twice the global average of $1,156 and four times the Mena average of $629, positioning the country as a high-demand market, it said.

The UAE's e-commerce market significantly grew after the pandemic as more consumers turned to online channels for their shopping needs. The sector grew 53 per cent to a record $3.9 billion in 2020 and it is expected to grow further, the Dubai Chamber of Commerce and Industry said in June.

From a commanding 97 per cent in 2018, the food delivery category has been whittled down to 83 per cent this year, and is expected to go down further to 73 per cent in 2024 and to 55 per cent in 2030, the Redseer report said.

Conversely, the grocery and "other" categories are poised to grow. From a meagre 2 per cent in 2018, groceries are expected to have market shares of 14 per cent, 21 per cent and 31 per cent in 2021, 2024 and 2030, respectively, while others would grow from virtually zero in 2018 to 3 per cent, 6 per cent and 14 per cent.

"Q-commerce is definitely one of the most lucrative opportunities out there and not looking into the adjacent sectors to it, will prove to be an opportunity missed in the medium to long term," Redseer said.

The research firm, however, said the categories mentioned above were just part of a "long list" of products, services and enablers that stand to benefit from the q-commerce surge.

"The Mena region benefits from strong logistics and digital infrastructure combined with high value associated by consumers towards convenience, leading to a willingness to pay for it as well."