Saudi Arabian Startup Wadi.com Carries on Expanding Across the Region

The changing face of grocery shopping in the Middle East has received another boost. Grocery delivery startup Wadi.com has teamed up with new partners and received funding to help it continue its ambitious expansion plans.

The appearance of this and other grocery sites has allowed consumers the chance to shop online more easily and enjoy rapid, hassle-free deliveries. How has this change come about and what can we expect to see in this industry in the future?

The History of Wadi.com to Date

This Saudi Arabian startup began life in 2015. Co-founders Kanwal Sarfraz, Ankit Wadhwa, and Pratik Gupta received funding of $67 million from the Tayyar Travel Group as their lead investor at the start of their journey. More recently, fresh funding from the UAE's Majid Al Futtaim Group has helped them to carry on growing.

In the first half of 2017, Wadi reached profitability by tripling their seller base and achieving a 200% increase in turnover. This mirrors the recent boom in online shopping in the region. According to a PwC report, the percentage of people who shop online each month in Saudi Arabia, the UAE and Egypt rose from 23% in 2013 to 29% in 2016.

In the past, it was believed that consumers in this part of the world shunned online shopping because of a preference for touching and assessing products personally. This is one of the elements of Saudi culture that some foreigners struggled to understand. However, the success of online retailers in recent years has shown that this attitude is now changing.

As it is a region with high smartphone ownership and internet use, the historic lack of e-commerce business done here was always an anomaly. It appears that locals are now happier to buy everything from clothes to domestic appliances and groceries on the internet.

Wadi has also partnered with Samsung in order to provide exclusive deals to their users. This follows on from similar partnerships with global firms such as Nokia and Reebok. Co-founder Pratik Gupta explained to a local newspaper in 2017 that they wanted to “bring levels of service that Amazon in India and Flipkart were offering”.

With more than 250 delivery vehicles and drivers dotted across Saudi Arabia and the UAE, they plan to offer efficient grocery deliveries around the clock. Indeed, their promise is that it will take no more than two hours from the placing of an order to the arrival of the groceries at the customer’s address.

The Platform

The offering from Wadi.com is built around a highly popular mobile app. With a customer base of over 15 million shoppers, they currently receive more than two thousand orders each day for a wide range of products.

It has been noted that the popularity of the app is also partially due to the user-friendly interface that it features. The idea is that anyone can very easily order their groceries online, even if they aren’t particularly tech-savvy.

Innovative and useful features include an assisted order placement function. In the case of a product not being available, the app will suggest alternative products that could be purchased instead.

It also offers a couple of different payment methods. The Wadi help centre states that their preferred option is with secure credit card transaction using Visa or MasterCard. Customers can pay by cash but this is subject to a minimum of 5,000 SAR/AED and has an extra charge of AED 5/ 17 SAR on each order.  

The payment methods will hopefully be expanded in the future to fit in with the other sites that operate in the Middle East and accept other options. Currently, it is possible to pay online for a wide range of goods and services. These include clothes, electronic goods, travel, and online casinos, among others.

The area of payments is developing in the country and the fact that Saudi Arabia is the world's second highest source of outward remittances shows that there is scope for further growth. These remittances are typically made up of expat workers' transfers back to their home countries. Almost $US 37 billion was sent in this way in 2017. At the time of writing, over 10 million foreign workers are employed in Saudi Arabia.

It should be noted that, while the Saudi Arabia lottery only accepts bank payments at the moment, the site says that it offers 100% safety and security for players. The site's FAQ also brings up one of the issues associated with bank payments; at busy times, players can sometimes have to wait for long periods to claim their winnings.

What Does the Future Hold?

To date, Wadi has had a successful enough introduction to the market to encourage them to expand already. With the grocery delivery market growing in Saudi Arabia and the UAE, there appears to still be plenty of room for them to grow.

Perhaps the biggest fear is that other startups come along and divide up the market among them. Certainly, the success of this new company is something that is sure to have encouraged others to have a look at this sector.

As of 2016, the groceries delivery industry in Saudi Arabia was valued at $115 million by Payfort. Among the other companies operating here are Danube, Careeb and Todoorstep. It looks like it is an industry that will carry on growing as more and more consumers opt to add some extra convenience to their lives.