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Covid-19: How has the UAE, GCC food sector changed during the pandemic

Dubai - The pandemic had accelerated their plans to go completely digital.

Food and beverage suppliers across the UAE and the GCC region have seen a significant growth in their online business and delivery portals, as a result of the Covid-19 pandemic, experts said at Gulfood 2021 trade show.

The show, which opened its doors on Sunday at the Dubai World Trade Centre (DWTC), features over 2,500 international brands from 85 countries, and will run until February 25, 2021.

Experts at the event highlighted how the F&B industry had to adapt to a new normal as a result of several safety and social distancing measures impacting the way that they usually do business. Many noted that the pandemic had accelerated their plans to go completely digital, while others said that they had started offering online delivery services to businesses and consumers in order to promote safety and best practices.

Muhammad Chbib, CEO of Tradeling, an e-marketplace for the B2B sector, said: “We have seen considerable growth in online transactions over the past few months. In fact, we launched our business at Gulfood last year at the start of the pandemic – and while Food, Beverages & Hospitality as well as Office Supplies were our first verticals, which were the most affected, we had to quickly adapt ourselves to the new reality.”

“As a result of listening to our customers’ needs, we continue to see a consistent increase in online orders, particularly in the food, beverage and hospitality line,” he added. “As a digital marketplace serving the B2B sector, this is a good indication of the robust growth of the food service sector.”

According to Simon-Kucher and Partners’ latest trends report, the consumer preference for staying at home and unprecedented demand for safety and hygiene have provided a boost to the digitalisation of shopping habits. As consumers avoid physical stores in response to the Covid-19 pandemic, online retailers and e-commerce platforms are poised for growth. In fact, 73 per cent of the UAE’s population believes that Covid-19 has made them more positive about online shopping. In the UAE, the e-grocery market grew by 300 per cent during the third quarter of 2020, while Saudi Arabia’s market has grown by 500 per cent. This has supported the rapid growth of hyperlocal delivery players such as Talabat, NowNow, elGrocery, InstaShop or Careem Now across the region.

Sameer K. Mohamed, MD of Jaleel Holdings, another exhibitor at the event, also highlighted how the company had introduced new practices to cater to changing customer requirements. “Until the pandemic happened, we were not delivering directly to consumers, but in the past two months we have started doing just that. We have seen an increase in both consumers and businesses opting for deliveries during this time. Before, about 45 per cent of our orders were through deliveries, and that number has now increased to 55 per cent.”

In response to the need for delivery options, Jaleel Holdings rolled out the Jaleel Cash and Carry app, which is currently only available for businesses, but will be expanded to include customers in the next few months.

The World Economic Forum has estimated the UAE’s 2020 e-commerce market to be valued at $27.2 billion. UAE residents are increasingly turning to home delivery options for their groceries amid social distancing and movement restrictions designed to minimise the impact of Covid-19, according to analytics from SEMrush. Searches related to ‘online grocery’ in the UAE grew a massive 560 per cent between January 2020 – when the first Covid-19 case was announced in the UAE – and March 2020.

Norma Taki, Transaction Services partner and Consumer Markets leader, PwC Middle East, highlighting the results of the 2020 Global Consumer Insights Survey, said that 53 per cent of Middle East respondents said that they are shopping more online using their smartphone in response to the pandemic. “The results highlight that while mobile shopping continues to be a growing trend here in the region, the impact of Covid-19 has forced change. Consumers who were previously resistant to using mobile payment channels discovered that purchasing goods and services on their smartphone was not only easy but convenient too.

PwC’s Covid-19 Pulse Global Consumer Insights Survey highlighted that before the pandemic 27 per cent of Middle East consumers were shopping for groceries exclusively or mainly online, while after the outbreak of Covid-19 this number grew to 51 per cent, with 92 per cent of those consumers indicating they will likely to continue to buy groceries mainly online even when social distancing measures are fully removed. This shows that there are more and new consumers taking advantage of e-commerce platforms.

“The opportunity lies with retailers and companies that are able to use data to predict customer behaviour and provide a multi-channel seamless experience both online and offline,” Taki said.

rohma@khaleejtimes.com