Saudi food delivery market value over $500m

The online food sector is set to grow by 10.05 percent per annum until 2026

Saudi Arabia, KSA, Food aggregators, Delivery
Saudi Arabia’s online food ordering and delivering market was valued at $511.21 million in 2020 and is set to continue to grow for at least the next five years.
The market is forecast to increase by 10.05 percent per annum, according to a new report from Reportlinker, a global research firm.
It explained: “Even after the challenge of pandemic in the 2020, the market showed a consistent growth. Digitisation, and emergence of advanced online services is expected to drive the Saudi Arabia online food ordering and delivery market in the next five years.”
The development of the delivery sector in the Kingdom has been exacerbated by the coronavirus pandemic, with restaurants forced to scale back dine-in operations or halt them entirely during certain points of last year. For many, deliveries were the only source of income throughout 2020.
At the time of writing, all F&B outlets in KSA are takeaway only. Numerous food aggregators and delivery platforms have been capitalising on this trend, with several new players entering the scene in the Gulf capital.
Businessman Mohammed Alabbar, for example, is launching his own application later this year. noon Food will first launch in Dubai in Q1 2021, followed by Abu Dhabi and Sharjah in the following quarter and then Riyadh and Jeddah later in the year.
The Emaar founder has been a staunch critic of the food aggregator playing field, saying many are holding operators ‘to ransom’ with sky-high commission rates. Noon Food aims to give three main benefits to restaurants: lowest fees guaranteed, high order volume through access to Noon’s 6.5 million customers, and reliable delivery experience with all orders fulfilled by Noon.
Another player supercharging the delivery market in Saudi is Kitch, a new cloud kitchen operator. Kitch was founded last year after Hajj and partner Fahad Alhokair decided to storm into the flourishing cloud kitchen market. With their delivery-focused model, they launched in Saudi and the UAE after privately raising $15 million in capital.
Kitch already has its first cloud kitchen in Riyadh and there are four on the way this quarter. The rest of 2021 will see another 15 to 19 kitchens in the Kingdom alone.
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