Saudi Arabia Online Food Ordering and Delivery Market
Saudi Arabia Online Food Ordering and Delivery Market stood at USD 2,488.91 million in the year 2023 and is expected to exhibit strong growth during the forecast period with a CAGR of 21.44% during 2023-2029. The Saudi Arabian online food ordering and delivery market witnessed tremendous growth over the past few years and saw a revolutionary change in the consumption pattern of food among the consumers. A number of critical factors drive the growing success and development of this market in the kingdom.
The fast-growing internet penetration and smartphone adoption in Saudi Arabia have been instrumental in propelling the expansion of the online food ordering and delivery market. The general accessibility of fast internet and mobile applications have transformed the way consumers live, developing a culture of convenience and accessibility when ordering food.
Saudi Arabia’s heterogeneous population brings a rich variety of food preferences. The food ordering and delivery online platforms address this diversity by presenting a diverse menu of cuisines, ranging from Saudi staple dishes to global foods, presenting consumers with a wide variety of eating options at their fingertips.
The market is dominated by intense competition among different online food delivery platforms competing for consumer attention and loyalty. This competition drives ongoing technological innovations, better user interfaces, and better delivery services to provide smooth, efficient, and customer-friendly experiences.
Technological Progress and Digital Revolution
The spread of mobile phones, better internet connectivity, and the expansion of digital infrastructure have played a central role in the growth of online food ordering and delivery outlets in Saudi Arabia. The popularity of mobile applications and digital platforms has transformed the way consumers engage with the food sector. These technological innovations have equipped consumers with the ease of navigating varied menus, ordering, and monitoring deliveries through a few clicks on their mobile phones. Additionally, the use of GPS tracking systems allows real-time tracking of delivery status, which improves transparency and reliability for customers.
Saudi Arabia’s digital transformation has been further boosted through the COVID-19 pandemic. Indoor dining restrictions and concerns for safety have driven a boom in food ordering online, resulting in greater dependence on digital platforms for food delivery services. This new consumer behavior has reaffirmed the role of technology in determining the future direction of the food industry in Saudi Arabia.
Changing Consumer Lifestyles and Preferences
Changing lifestyles and changing consumer trends have been major drivers of the demand for food delivery services through online channels in Saudi Arabia. Accelerated urbanization, expatriate inflows, and increasing numbers of youth with hectic lifestyles have led to increased demand for convenient and time-efficient meal solutions. Customers are increasingly looking for convenient meal experiences, and instead of eating out or cooking meals at home, they opt for the convenience of ordering meals online.
In addition, there has been a discernible change in eating habits and tastes, with increased interest in varied cuisines and an increased emphasis on health and wellness. Food delivery websites have reacted by providing a broad range of cuisine options, including healthy and specialty dietary options, to suit the varied tastes and preferences of consumers throughout Saudi Arabia.
Key Market Challenges
Regulatory Challenges and Compliance Matters
A major challenge in the online food ordering and delivery market in Saudi Arabia concerns regulatory frameworks and matters of compliance. The regulatory environment within the country could pose complexity and strict requirements for restaurants and online food delivery platforms. The requirements could include licensing, food safety guidelines, rules of delivery, and adherence to religious and cultural principles, affecting the operations of these platforms.
Compliance with Halal practices, for example, is critical in the food sector in Saudi Arabia. Food delivery platforms online need to ensure that restaurants on their platforms comply with Halal practices. Additionally, it can be time-consuming to deal with licensing and permits for food delivery services across various regions of the country because of differing local regulations.
Logistical Challenges and Last-Mile Delivery
Logistics are a major challenge for the online food delivery business. Maintaining timely and effective last-mile delivery, particularly in city areas, can be challenging with traffic and congested city patterns. Saudi Arabia’s vast geography and differences in urbanization exacerbate the logistical challenge, especially in delivering to remote or less-accessible regions.
Ensuring food quality and safety when transporting food within the country’s fluctuating temperatures and climates also presents a logistical challenge. Ensuring foods are delivered fresh and safe to customers requires companies to invest in suitable packaging and temperature-controlled delivery systems, which contribute to operational expenses.
Segmental Insights
Operation Type Insights
Within the Saudi Arabia food delivery and ordering online market, the aggregators are the leading segment that has revolutionized how food consumers interact with food service businesses. They compile menus from numerous restaurants, providing consumers with extensive menus of different cuisines and foods using a single interface. The convenience element has been central to fueling their success among Saudi consumers who are looking for variety and efficiency in the consumption of their food.
Food aggregators simplify the order process, enabling users to navigate menus, compare prices, read reviews, and order effortlessly through mobile applications or websites. This ease is especially attractive in a market where digital adoption is happening at a fast pace, driven by the pervasiveness of smartphone usage and enhanced internet connectivity.
In addition, Saudi Arabian food aggregators utilize data analytics to tailor user experiences, recommending restaurants based on prior orders or likes. This directed strategy increases customer satisfaction and inspires repeat business, building loyalty for users.
The market competition between food aggregators is fiercer, with large players spending heavily on marketing, technology, and logistics to capture more market share. Restaurant partnerships and ongoing innovations in delivery logistics further solidify their position in the market, guaranteeing timely and efficient service throughout the kingdom.
As Saudi Arabia continues to urbanize and adopt digital solutions, the dominance of food aggregators in the online food ordering and delivery market is anticipated to continue due to their capacity to address changing consumer expectations for convenience, variety, and quality in dining choices.
Regional Insights
Within the Saudi Arabia online food ordering and delivery market, the Northern and Central regions are standout regions that are leading the high growth and adoption. These regions include the highly populated cities of Riyadh, Jeddah, and Dammam, which are known for having a high density of restaurants, a variety of culinary options, and an advanced consumer base.
Riyadh, being Saudi Arabia’s capital and largest urban center, plays a central part in defining the food delivery experience online. With a cosmopolitan society and highly busy lifestyle in Riyadh, this has driven consumption of convenient meal solutions available online and through mobile apps. The same applies in Jeddah and Dammam, the key commercial cities, with significant activity in food ordering online by residents and expatriates ordering variety cuisines for home delivery.
They enjoy strong infrastructure and logistic networks that facilitate successful food delivery operations. Key food aggregators and delivery players have strong presence in Northern and Central Saudi Arabia, supported by strategic relationships with restaurants and ongoing technology improvements aimed at improving the quality of services and customer experience.
While as digital adoption continues to grow in these regions, fueled by rising internet penetration and smartphone usage, the hegemony of Northern and Central Saudi Arabia in the online food ordering and delivery space will continue to prevail, fueling further development and competition in the sector.
Recent Developments
In July 2023, Taker, an online ordering system for restaurants, introduced a new delivery app called Dook in Saudi Arabia. The cutting-edge platform aims to revolutionize the dining experience by giving customers easy access to a wide variety of culinary options from their favorite restaurants.
In May 2023, Careem, a popular multi-service app, launched a new on-demand food delivery service dedicated to healthy food options in Riyadh and Jeddah, Saudi Arabia. This move is aimed at offering Saudi consumers easy access to healthy and tasty food options without the necessity of a subscription model.
Major Market Players
HungerStation LLC.
Jahez Group
Talabat
Careem Deliveries FZ LLC
Mrsool
The Chefz Co.
Aram Meem LLC (ToYou)
Future Arrow Tech. Ltd. (Lugmety)
Wssel
Shgardi
