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The rapid consumer shift caused by the coronavirus pandemic has led to an increase in online spending on grocery items, a new report suggests.
The average amount of money that UAE residents spent on a basket of goods online in 2020 was 40 percent higher than what shoppers would normally spend at supermarkets, Network International’s latest analysis said.
“In 2020, UAE residents spent more when they did their supermarket shopping online as compared to when they made their purchases at an outlet,” the payment services provider said.
“The increase can be attributed to a shift in consumer behaviour following COVID-19 lockdown restrictions with safety concerns and convenience, prompting a growth in online and contactless purchases.,” it added.
Consumers shifted to online spending during the early part of the pandemic last year, following stay-at-home orders.
And, as more people opted to shop online and spent more than usual, overall online supermarket spending volumes surged by 93 percent during the lockdown period in March.
The spending dipped to 85 percent in April, as frustrated residents complained about facing weeks-long delays in deliveries while retailers struggled to tackle the logistical challenges of the unprecedented demand for deliveries.
Spending went back up to reach a 114 percent increase in May and on to 280 percent and 152 percent increase in November and December, respectively.
E-grocery platforms
The growth, Network International said, was aided by the accelerated adoption of e-grocery start-up platforms and mobile applications, as well as the rapid pivot made by food delivery and ride hailing apps to include groceries and other essentials as part of their offering.
“The past year has fundamentally transformed one of our biggest weekly chores driving a significant portion of the population to do their supermarket shopping online,” said Nandan Mer, group CEO of Network International.
“Looking ahead, it’s clear that an increasing number of consumers may continue to shop from the comfort and safety of their homes, appreciating the convenience that e-commerce and contactless transactions can bring them.”
As for in-store purchases, the point-of-sale spending volume among UAE residents consistently declined, from 32 percent in March to 10 percent in May. It further fell into negative territory, at 6 percent in June and 12 percent in December.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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