Pakistan:
Pakistan is the sixth most populous country which makes it one of the largest markets for groceries in the world. Currently, the country’s online grocery industry is not very prominent but the space and opportunity for growth is really exciting.
The E-commerce market in Pakistan is mainly made up of players focusing on electronics and fashion, but there is a growing niche of online grocery portals that is gaining momentum.
FEBRUARY 21, 2020.
MandiExpress.pk raises $725,000 Pre-Series A Round from Lakson Venture Capital and Disrupt.com
Market Analysis
Total food and grocery market size was $64 billion in 2018.
Pakistan’s E-commerce market pulled in $700 million in 2017 and crossed the $1 billion mark in 2018. Current e-commerce market size is $1.5 billion.
The online grocery market is 6% of Pakistan’s total E-commerce market.
Market evaluation for the online grocery industry was $42 million dollars in 2018, $70 million in 2019 and is expected to cross the $100 million mark in 2020.
The market, according to experts is still not performing at its capacity, as CEO of Mandiexpress predicts “The potential online grocery trade comes out to be $360 million, which is 1% of the entire grocery industry (both online and offline). There is room for a lot of other players”. The market is changing however and is expected to increase significantly in size five years down the line.
Major players
There are currently over 20 e-grocery chains across Pakistan. This does not include numerous neighborhood shops that also offer grocery delivery. Some major players include Al Fatah, Taza Mart, Hum mart, Yayvo, selly.pk, Imtiaz super store, QuicknEasy or QnE, Cartpk, Mycart, Grocerapp, Mandiexpress and Sabziphal etc. Most of these retailers offer perishable and packaged products while first movers such as Mandiexpress and Sabziphal only offer fresh produce.
Basket Analysis
The largest single unit purchase at online grocery stores is milk, with powdered milk sales overshadowing packages milk.Staples such as bread, butter and eggs also tend to be points of interest for the consumers.
The volume of organic foods, spices, condiments and other niche products still don’t make a sizable portion of the basket. Sales of these products are limited to neighborhood stores with exception of online niche retailers.
Payment Methods
90% - 95% of payments are still on COD (cash on delivery) basis. Most neighborhood stores accept payments from Fintechs such as Jazzcash and Easypaisa. Major banks like HBL are pushing for cashless online transactions and are also offering discounts on online and bulk purchases.
CONCLUSION
The unprecedented boom in the e-commerce industry in general has paved a way for a calculated estimate of what the future of the online grocery industry will look like. Although the industry is valued in billions, it still hasn’t captured 2% of the global market and is moving forward at an ever increasing pace. Timeline for the global market, which is estimated to reach $1.1 trillion by 2027, shows a huge space for innovators, investors and collaborators. The pakistani market, still in its nascent state, is picking up pace and is showing huge potential. The success of new entrants will definitely be based on their Quality of products, customer retention and overall business model but the future of online grocery delivery industry seems bright.
