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Online grocery shopping is changing the UAE and KSA warehousing sector

Article-Online grocery shopping is changing the UAE and KSA warehousing sector

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Other factors in a post-pandemic region include shifting from larger to smaller facilities and smarter solutions.

The industrial and logistics’ sector in the United Arab Emirates and the Kingdom of Saudi Arabia is shifting towards more technological solutions, while e-commerce is expected to skyrocket even further in the future, experts predicted during Day One of Cityscape Summit 2020.

Discussing new investment opportunities in the field, speakers cited a rise in e-commerce to incorporate groceries, and using smart technology in storage and stocking are just two of the opportunities in a post-pandemic world.

“As a sector, we strongly believe in e-commerce and we are one of those firms which is invested in possibly every aspect of it,” said Pankaj Gupta, co-founder, and co-CEO of Gulf Islamic Investments. 

In turn, as an increasing number of small and medium enterprises (SMEs) gain market access directly to their customers, it leads to more value creation.

“That has increased the demand for logistic assets,” said Siddharth Sanghi, Group CFO at Gulf Islamic Investments. “We are seeing an increase in demand in terms of space, the availability of material and the speed to delivery, so there is a lot of transition in logistics.” 

Sanghi added that he foresees a lot of businesses increasing due to this rise in e-commerce, with the UAE expecting to reach nearly $30 billion within two years, and Egypt and Saudi Arabia catching up. 

“Mobile penetration is significantly higher in these parts of the world,” he said. “We see a very strong future for e-commerce.”


In terms of warehousing across the GCC, both spoke of the great opportunity from e-commerce grocery platforms, namely within the cold store and food sector warehousing. 

“These are the critical areas we are looking at,” Sanghi said.

As an active player in the ecosystem, his firm is not only focusing on the warehouse aspect, Sanghi said, but it is also providing smarter solutions that make a difference to the end-user. An example includes providing solar panels in warehousing to contribute towards the environment.

“We should do something to contribute from our side, and how to bring local players into the whole gamut,” Gupta explained. “We strongly believe that as a player in this ecosystem, it is not just about making money. Our responsibility is much bigger.”

Convenience for the end-user and urban logistics were described as deciding factors and trends. A shift from a centralised warehouse for large facilities towards smaller facilities and a single distribution centre has also been taking place due to COVID-19.

Finally, technology is playing a larger role with most players now starting to think ahead. 

“They talk about how to reduce human intervention, including using Artificial Intelligence (AI) and the Internet of Things (IoT),” Gupta noted. “We are in touch with many players from Silicon Valley, India, and the region to provide a smarter solution to our storage and stocking. We are seeing many improvements happening.”


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