Online Supermarkets in the Middle East

Yesterday in a news from AMEinfo, a Jordan based company called MENA Apps launched its online supermarket Sallaty.jo for the Jordanian market.

Online supermarkets in the Middle East or Gulf are not a viable business and most of whom tried to launch this concept ended up shutting down.

Many years back during the dotcom boom in the early 2000, Webvan was “the” online grocery who wanted to take the retail grocery business to the next level and they ended up burning $830 millions and firing 2,000 employees.

And while real brick-and-mortar stores are looking for ways to shrink their operational cost and surfaces, some think that the online option is the solution. Big international retailers have all the needed platforms and money to do it and are barely succeeding in it (compare online grocery sites in France), so the main direction in a very advanced retail market crowded with endless big names and store formats like France are moving towards Drive formats (in French), you buy online and come pick up your stuff yourself from a store near you (compare Drives in France).

If you are not a supermarket yourself, it will be quite hard to offer the needed assortment to your clients, as a supermarket have on average 45,000 items on its shelves so it is quite impossible for any start-ups to stock all these items and variations in its back store, especially with all the fresh and frozen food. And if you have a kind a joint venture with a supermarket, you will end up with very tiny margins on your orders, especially that no supermarket will sacrifice a big chunk of his margin that he is fighting day and night to get from his suppliers.

Good luck for Sallaty.jo.