E-commerce rockets in Saudi Arabia amid Covid-19 pandemic

BinDawood Holding sees sales shoot up 200% while its app is installed in record numbers
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E-commerce in Saudi Arabia is experiencing a rapid spike in growth amid the Covid-19 outbreak.

In late March local online retailer BinDawood Holding told local media that, since the escalation of the Covid- 19 crisis, its average sales on a 10-day basis had increased by 200%, while its average order value rose by 50% and app installations by 400%.

The company has two e-commerce platforms – BinDawood and Danube – which are connected to their respective supermarket and hypermarket chains, enabling customers to purchases groceries and other goods online.

While the economic impacts of the virus have seen many businesses close and millions of people lose their jobs globally, BinDawood officials say the rapid growth in activity has helped the company buck these trends.

All of the company’s 72 stores remain open, including the newest Danube store, which opened last week in Riyadh’s Al Andalus district. The company has also hired more packers and drivers to keep up with demand for online deliveries.

Elsewhere, Saudi grocery delivery app Nana has also benefitted from the recent turn towards online shopping, raising $18m in a Series B funding round in late March to expand operations across the Middle East, with investors including venture capital funds Saudi Technology Ventures and Middle East Venture Partners.

The company has expanded capacity three-fold following a surge in demand associated with the Covid-19 outbreak. This is expected to continue in light of the Saudi government’s decision to impose tighter curfews in major cities.

Looking ahead, retailers may need to adapt their supply chains in response to shifting market dynamics.

"Vertical integration is a pivotal development strategy, especially considering the recent spike in demand for e-commerce and fresh food delivery, which Saudi Arabia's supply can hardly meet," Seifallah Sharbatly, nanaging director of Sharbalty Fruit, told OBG.

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