E-commerce has been growing rapidly in the Middle East. This is due to a number of factors, including the increasing popularity of online shopping, growth of the middle class, and the expansion of urban areas. In turn, it has resulted in the growth of many on-demand businesses.
Infact, the last mile delivery market in the Middle East is expected to grow at a CAGR of 15% from 2020 to 2025.
Let us have a look at some of the facts and figures related to the last mile delivery market.
- The Middle East e-commerce market is expected to reach $100 billion by 2025.
- The average cost of last mile delivery in the Middle East is $10-15 per shipment.
- The average delivery time for last mile delivery in the Middle East is 2-3 days.
- 70% of consumers in the Middle East are willing to pay more for same-day delivery.
- 50% of consumers in the Middle East are willing to pay more for sustainable delivery options.
This gives us a fair idea as to how the last mile delivery market in Middle East is changing.
Key Trends in Last Mile Delivery
As the last mile delivery market grows, businesses are looking for ways to improve the efficiency and effectiveness of their delivery operations. In this blog, we will discuss some of the key trends that are shaping the last mile delivery market in the Middle East in 2023.
Use of technology to improve efficiency
Technology is playing a major role in improving the efficiency in last mile delivery. Businesses are using technologies such as GPS tracking, Route Optimization, and mobile apps to improve the speed and accuracy of their deliveries.
The growth of partnerships
As the last mile delivery market becomes more complex, businesses are increasingly partnering with other companies to improve their delivery operations. This includes partnering with logistics companies, retailers, and even other e-commerce businesses.
Carriers delivering to consumers are the focus in 2023. Driver shortage is not an issue in The Middle East. Though, they have to face a few challenges such as unclear addresses, lack of detailed maps and traffic jams.
On an average, a driver has to make 33,000 stops in a year. This makes it tough for the drivers to locate the consumer location and deliver the orders. If the drivers are not satisfied and are underproductive, they will not be able to provide a good delivery experience to their consumers.
This can lead to a loss of trust and can cause a slowdown in business growth. So, more and more companies are focussing on empowering the drivers for better performance.
More and more consumers are becoming conscious of the environment with time. They are more likely to choose delivery companies that have sustainable practices in place. This is a major factor for the last mile delivery companies in 2023.
Using electric vehicles can be an active contributor in minimising carbon emissions. Businesses are also incorporating parcel lockers in their last-mile operations in the Middle East.
Parcel lockers can reduce vehicle emissions by 70%, especially in densely populated cities. These are automated parcel devices that act as alternative delivery places for thickly inhabited areas.
For many years, retail fulfilment was binary. The consumers had to either order the articles online or purchase them from physical stores. However, things have altered drastically due to omnichannel retailing in the middle east.
The middle-east region is witnessing a mushrooming growth in omnichannel retail lines. The increased adoption of the internet, greater use of smartphones, and better product selection have resulted in many people opting for omnichannel shopping.
More than half of the consumers in the middle-east begin their shopping journeys via search engines instead of retail sites. Improvement in omnichannel capabilities allows businesses to improve speed, costs, flexibility, and delivery control.
Using D2C for developing a strong customer base
Consumers these days covet customization and convenience together with greater product selection and price. These things are offered in abundance by the D2C e-commerce model. Apart from manufacturing, brands use this model for controlling and managing various aspects such as marketing, distribution, sales, retail, and customer experience.
All businesses are adopting the model for getting a clear picture of customer preferences via data insights. This can be leveraged to achieve a strong consumer base with end-to-end and personalized experiences.
Robust investments in last-mile delivery solutions with AI
The supply chain and logistics experts have predicted that after 2022, all businesses will concentrate on exploiting the growth opportunities of the future. They will start to graduate from a survival mindset onto a growth mindset. This will also be handy in solving the issues related to one of the more critical components of the supply chain which is last-mile delivery.
For making the entire last-mile delivery process cost-efficient, and to generate greater revenues from the service, businesses will look to improve their investments in AI-related technologies. With various businesses redefining and rethinking their tech capabilities for improving their competitiveness, we can observe a flurry of investments these days in last-mile delivery logistics solutions.
The better pace of recovery and transition toward normalcy
The pace of recovery towards normalcy has increased in 2023 as compared to 2022. So, most businesses are taking incremental and dedicated steps toward making their last-mile delivery intelligent and less reliant on human labor.
With the last-mile delivery processes going through transformative changes in the year 2023, all companies will need to concentrate on getting things right. Using dispatch management software will be a good tool for optimizing last-mile delivery in the middle-east.
Growth in the urban environment
These days more than half of the population lives in urban areas. There are more than 1.5 million people added to the rising global urban population each week.
Many businesses are responding to this transition by adopting how humans consume the products and by interacting with online shopping for driving growth. The last-mile delivery is a complex and expensive addition to the delivery supply chain without having a proper urban infrastructure that includes alternatives such as droids, couriers, drones, and autonomous ground vehicles.
The use of robotics makes these deliveries quicker providing better flexibility and reliability in terms of how the products are delivered via smart integrated systems in the middle east.
Greater online shopping
We have observed greater advancements in the field of software engineering for getting better online delivery platforms. The better urban infrastructure and logistics have improved the speed and efficiency of last-mile deliveries in the middle east region.
The advent of the pandemic intensified the trends of online shopping. Due to quick urbanization and good road infrastructure, the middle-east area is perfectly positioned for last-mile delivery solutions. With the hybrid shopping centers moving towards better experience, many areas are reused as fulfillment centers for sales with a greater emphasis on flexibility.
Last-mile delivery is the most complex and expensive part of delivery to the consumers. To make sure, your business is in line with the above trends, you need a powerful delivery management platform.
Tookan is an intelligent delivery management system for all your last-mile delivery needs. Through Tookan, you can achieve higher efficiency by GPS tracking, route optimisation and real time updates.
Learn more about it here.
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