Dubai: LuLu Group will retain its own online grocery services even as the retailer adds more cities in the United Arab Emirates and Saudi Arabia as part of its new alliance with Amazon. It was last week that LuLu opened a new online channel for grocery sales with Amazon, with tests taking place in Dubai ahead of a full launch within a month.
“Groceries already account for more than 60 percent of sales through LuLu’s online platform,” said Ashraf Ali MA, chief executive of LuLu Group. “Through Amazon, we are opening up new possibilities for shoppers to access a dominant part of our stock.
“Our target for LuLu online is 20 percent of the group’s annual turnover. It’s only been four years since launch, and this deal with Amazon will get us to that 20 percent faster.” – Ashraf Ali MA, CEO of LuLu Group
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After Dubai, other cities will join the LuLu-Amazon coverage, while the extension to Saudi Arabia will happen “soon enough”. “Amazon’s tie-up will eventually be extended to other Gulf markets,” Ali said.
Online grocery sales remain a dominant category within the broader e-commerce space in the UAE. The other half of the dominant market has long had grocery options, while this space is also occupied by niche operators and even delivery service providers through their “dark shop” networks. (Dark stores are where these services are offered. They keep a limited stock of the most in-demand stock and deliver within 30 minutes or so.)
“Being bigger in grocery plays to our strengths: we have the sourcing deals for our hypermarkets and online channel,” Ali said. “This means we have the ‘first mile’ covered. Stock comes directly to our fulfillment centers and that takes care of the ‘second mile.’
“Amazon takes the orders and uses its own networks to keep up with the delivery, which is the ‘last mile’. All of this can be done seamlessly, which is why we are so confident of a huge boost to online sales .
“Both of us – Amazon and Lulu – have come to a win-win agreement and one that would help our customer base.”