The market for Courier, Express, and Parcel (CEP) in Saudi Arabia is estimated to be valued at more than USD 970 million and is estimated to grow at a CAGR of more than 6. 5% during the forecast period.
New York, Nov. 19, 2020 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Saudi Arabia Courier, Express, and Parcel (CEP) Market - Growth, Trends, and Forecasts (2020 - 2025)" - https://www.reportlinker.com/p05986878/?utm_source=GNW
Due to the impact of Covid-19, the market is expected to fall to USD 823 million in 2020.
- E-commerce is one of the major factors driving the market growth. With higher connectivity rates, young working population, and advanced infrastructure, the country is one of the major markets in online retailing in Middle East.
- The PickUp DropOff (PUDO) collection points are expected to gain popularity in the future. Currently, around 15% to 20% of the e-commerce orders are collected at a physical location operated by the courier companies or their partners. It also makes the return management easy for the companies.
- Saudi Arabia has been becoming an important market for both domestic and international shipments with major companies entering and expanding networks in the market. The international players are making strategic investments to establish a regional logistics network, such as opening of new distribution centers, smart warehouses, etc.
- Technology has become key enabler for companies to be competitively aligned with market trends and dynamics. The logistics companies, especially in the CEP business have to be considerate regarding the technological investments which otherwise can make the business disrupted.
- Last mile delivery is challenging in Saudi as there are no postal codes/rarely used. Currently, delivery companies in Saudi Arabia regularly ask for landmarks rather than addresses, with drivers often requesting WhatsApped locations.
- According to industry sources, maintaining the consistency of quality for service and managing cost at the same time is a challenge for all the industry players. As there is still a strong preference for cash on delivery while shopping online, interactive delivery management and customer communications are becoming more important.
- Given the continuous growth in e-commerce and the fact that building one’s own network is very expensive, more partnerships are expected to happen in the market on the back of pressure on cost reduction.
- As the e-commerce grows, the return deliveries also increase. Currently, the rate of returns is low in Saudi pertaining to the Cash on Delivery (COD) shipments, when compared to other countries in region.
Key Market Trends
B2B dominating the market while B2C set to outpace growth:
In the B2B segment, with the growing emphasis on digitization and in order to compete at a global level, the firms are being driven toward greater adoption of e-commerce, which is helping them to expand and reach new customers. In Saudi Arabia, the CEP market is dominated by B2B deliveries with more than 70% share. The key customers of CEP companies in the B2B segment include retailers, manufacturers, and other companies. The economic growth and development of trade and commerce in the Kingdom are expected to drive the growth of the B2B CEP market through the forecast period.
The fast growth in e-commerce has been resulting in increasing share of B2C in the overall CEP market. At the same time, e-commerce has provided the CEP companies challenges, such as route and resource planning for fast delivery, technology and IT infrastructure, automation, etc.
The e-commerce segment accounts for the majority of the B2C CEP market. The banking and financial services industry and other document deliveries from education, telecom, or government and public services sectors also contribute significantly to the B2C segment apart from e-commerce.
The e-commerce logistics in the country is at a nascent stage when compared to many other mature markets. Going forward, more business models are expected to evolve involving outsourcing and focus on specific parts of the value chain, such as first mile, long haul, and last mile. The majority of the customers of SMEs, around two-thirds of all customers are individuals. This indicates the large addressable market for B2C CEP companies from these SMEs.
Healthcare Logistics - a Sector of Potential Opportunity
The population of Saudi Arabia is rapidly growing. By 2030, the population is expected to reach nearly 40 million. The demographic profile of the Kingdom is quickly changing. By 2030, those over the age of 50 are expected to increase to approximately 12.5 million.
As healthcare spending is increasing, the logistics associated with this spend are costly and require specialized solutions for which express and parcel delivery providers and other logistics companies are competing to provide.
With increasing healthcare spending, the optimization of the supply chain will be imperative for manufacturers/service providers. Saudi Arabia is investing heavily in the healthcare sector and is building several medical cities.
Healthcare services and training have become top priorities for the Saudi government, and it is committed to invest in optimizing the local pharmaceutical industry and to create a robust healthcare infrastructure, which calls for improved cold chain management and perfect last-mile delivery.
Given that the sector is growing fast and the number of companies in Saudi that are specialized in this area of healthcare logistics is limited, it represents a potential opportunity for the new entrants to the market, as well as for existing players.
BookDr. is a leading digital healthcare app that provides same-day ePharma delivery and also offers home lab visits. It supports the supply of its integrated logistic services through its partnership with SMSA Express.
The Courier, Express, And Parcel (CEP) market in Saudi Arabia is fairly consolidated in nature. The top five players in both the domestic and international legs dominate the market accounting for more than 65-70% of the market share. SMSA Express, DHL, Aramex, and Saudi Post are the top players in the domestic CEP market while DHL and Aramex have very high market shares in the international CEP market.
The digitally enabled logistics startups are rising in the country in order to capitalize on the high growth of the e-commerce sector and to increase the operational efficiency in the package delivery. For instance, Fetchr has entered the Saudi market with an app-driven solution. Also, the companies that are operating in the country are focusing on improving their digital capabilities.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
Read the full report: https://www.reportlinker.com/p05986878/?utm_source=GNW
ReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need - instantly, in one place.
CONTACT: Clare: email@example.com US: (339)-368-6001 Intl: +1 339-368-6001