A Booming Market: A Look Into Saudi Arabia's Rapidly Evolving Food Delivery Landscape Here's a glimpse into the transformative journey of food delivery in Saudi Arabia.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
Lucidity Insights and Entrepreneur Middle East have published a new special report, entitled "The Growth of The Food Delivery Market In KSA", that provides an in-depth look at Saudi Arabia's food delivery landscape, highlighting key market trends, growth drivers, as well as the business results achieved by German multinational Delivery Hero's food delivery app HungerStation.
In 2023, the food delivery market in Saudi Arabia was valued at US$10 billion forecasted to soar to $14.9 billion by 2028. This growth is largely attributed to the increasing adoption of online food ordering, a trend accelerated by the COVID-19 pandemic and sustained by a tech-savvy, convenience-oriented population.
Source: Lucidity Insights
The Saudi Arabia's food delivery market is primarily divided into two segments: meal delivery and grocery delivery. As of 2023, meal delivery commands the lion's share, constituting 88% of the market. This dominance highlights the sector's established infrastructure and consumer preference for ready-to-eat restaurant meals delivered to their doorsteps. However, grocery delivery, currently holding a 12% market share, is set to reach 19% by 2028. This shift points to a broader consumer trend towards online grocery shopping, driven by the convenience and efficiency offered by startups like HungerStation.
In the past five years, Saudi Arabia's foodtech startups have attracted over $555 million in funding- food delivery startups have snapped up 48% of that total funding ($266 million), indicating just how integral the food delivery sector is to Saudi Arabia's foodtech startup ecosystem.
Source: Lucidity Insights
In 2022, the average annual revenue per user per year (ARPU) was the highest in Saudi Arabia, at over $600 per person. The ARPU in the kingdom was more than 25.6 times the average revenue in Egypt and 1.7 times the average revenue in the UAE. The consumers in Saudi Arabia are willing to spend significantly more on food delivery compared to their regional counterparts.
The report also delves into the success story of HungerStation, which was Saudi Arabia's first online food-ordering platform when it launched in 2012. Fast forward to 2024, HungerStation now offers users a wide range of options beyond just restaurants, including groceries and pharmacies. Operating in over 102 cities across Saudi Arabia, it has partnerships with over 55,000 restaurants and stores, meaning that it collaborates with more than 65% of restaurants in the kingdom.
Source: Lucidity Insights
Whether you are looking to understand market dynamics or gain insights into HungerStation's success, this report is your comprehensive guide to the future of food delivery in Saudi Arabia. To read more about Saudi Arabia's food delivery, download and read the special report click here.
Related: Infographic: Saudi Arabia's Young And Tech-Hungry Consumer Base
