Market Feasibility and Business Plan: Online Grocery Shop, UAE
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AI Summary
This project presents a comprehensive business plan for launching an online grocery shop in the United Arab Emirates (UAE). The study begins with an abstract outlining the market feasibility of an e-grocery startup, followed by an introduction that establishes the research background, company details, rationale, aims, objectives, and research questions. The literature review explores the e-commerce grocery business, the UAE's e-grocery market, and includes analyses like Porter’s five forces and SWOT. The methodology section justifies the use of positivism philosophy, a deductive approach, and a descriptive research design. Data collection involves secondary and primary data, with details on sampling, analysis, and ethical considerations. The findings section presents quantitative and qualitative data, including survey results on customer preferences, satisfaction, and factors influencing online purchases. The conclusion links objectives with findings and provides recommendations for future research, addressing the competitive landscape, customer behavior, and technological considerations for ensuring secure transactions and building customer trust in the UAE's online grocery market. This plan focuses on market demands, customer acceptability, and developing a competitive edge in the e-grocery industry.
Launching and Online Grocery Shop in United Arab Emirates
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Abstract
The study considered the market feasibility of Grocery Online, which is a start-up online retail
store selling the grocery products to the people of United Arab Emirates. The identification of
the problem statement and research rationale would help in developing the aim, research
objectives, and research questions. The literature study would provide the details of the external
market opportunities and threats. Furthermore, this section of the study would also generate the
ideas about the necessary promotional activities that would be more beneficial in drawing the
attention of the customers towards the e-grocery products. Porter’s five forces analysis provides
the detailed analysis of the market in terms of the market positioning.
The business plan is focusing on the establishment of the online grocery shop in United Arab
Emirates. In this business plan, the positivism philosophy is selected to extract the hidden truth
from the number of responses. It has been observed that the assumptions would not be preferable
for establishing the business that has to deal with the long sustainability purposes. The use of the
deductive approach and descriptive techniques was also quite beneficial for the study. On the
other hand, the mixed method research is also developed in this study.
1
The study considered the market feasibility of Grocery Online, which is a start-up online retail
store selling the grocery products to the people of United Arab Emirates. The identification of
the problem statement and research rationale would help in developing the aim, research
objectives, and research questions. The literature study would provide the details of the external
market opportunities and threats. Furthermore, this section of the study would also generate the
ideas about the necessary promotional activities that would be more beneficial in drawing the
attention of the customers towards the e-grocery products. Porter’s five forces analysis provides
the detailed analysis of the market in terms of the market positioning.
The business plan is focusing on the establishment of the online grocery shop in United Arab
Emirates. In this business plan, the positivism philosophy is selected to extract the hidden truth
from the number of responses. It has been observed that the assumptions would not be preferable
for establishing the business that has to deal with the long sustainability purposes. The use of the
deductive approach and descriptive techniques was also quite beneficial for the study. On the
other hand, the mixed method research is also developed in this study.
1
Acknowledgement
I am quite grateful to the MBA program that has helped me in generating the adequate
knowledge about the business research method. I would like to thank my professors and mentors
for assigning this project work. The enormous help and supports derived from their end were
much significant for me. I would like to thank the participants in the primary data collection
process. I would like thank each one of the associates for keeping faith on me and providing me
this opportunity to enhance my personal and professional skills.
Thanking You
Regards
2
I am quite grateful to the MBA program that has helped me in generating the adequate
knowledge about the business research method. I would like to thank my professors and mentors
for assigning this project work. The enormous help and supports derived from their end were
much significant for me. I would like to thank the participants in the primary data collection
process. I would like thank each one of the associates for keeping faith on me and providing me
this opportunity to enhance my personal and professional skills.
Thanking You
Regards
2
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Table of Contents
Chapter 1..........................................................................................................................................8
Introduction......................................................................................................................................8
1.0 Introduction................................................................................................................................8
1.1 Research Background................................................................................................................9
1.2 Background of the Company.....................................................................................................9
1.3 Rationale of the Research........................................................................................................10
1.4 Scenario Chosen......................................................................................................................11
1.5 Research Aim...........................................................................................................................13
1.6 Research Objectives.................................................................................................................13
1.7 Research Questions..................................................................................................................13
1.8 Research Significance..............................................................................................................14
1.9 Project Structure......................................................................................................................14
1.10 Summary................................................................................................................................16
Chapter 2........................................................................................................................................17
Literature Review..........................................................................................................................17
2.0 Introduction..............................................................................................................................17
2.1 Conceptual Analysis of the e-commerce grocery business.....................................................17
2.2 e-Grocery market in United Arab Emirates.............................................................................19
2.5.1 Porter’s Five Forces Analysis...............................................................................................24
2.5.2 SWOT Analysis....................................................................................................................27
2.6 Statement of the Future Desired Position................................................................................28
2.7 Gap Analysis............................................................................................................................29
3
Chapter 1..........................................................................................................................................8
Introduction......................................................................................................................................8
1.0 Introduction................................................................................................................................8
1.1 Research Background................................................................................................................9
1.2 Background of the Company.....................................................................................................9
1.3 Rationale of the Research........................................................................................................10
1.4 Scenario Chosen......................................................................................................................11
1.5 Research Aim...........................................................................................................................13
1.6 Research Objectives.................................................................................................................13
1.7 Research Questions..................................................................................................................13
1.8 Research Significance..............................................................................................................14
1.9 Project Structure......................................................................................................................14
1.10 Summary................................................................................................................................16
Chapter 2........................................................................................................................................17
Literature Review..........................................................................................................................17
2.0 Introduction..............................................................................................................................17
2.1 Conceptual Analysis of the e-commerce grocery business.....................................................17
2.2 e-Grocery market in United Arab Emirates.............................................................................19
2.5.1 Porter’s Five Forces Analysis...............................................................................................24
2.5.2 SWOT Analysis....................................................................................................................27
2.6 Statement of the Future Desired Position................................................................................28
2.7 Gap Analysis............................................................................................................................29
3
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2.8 Linking the identified Gaps.....................................................................................................29
2.9 Implementation Plan................................................................................................................30
2.10 Outcomes of the Key Stakeholders Group............................................................................31
2.11 Resource Implications...........................................................................................................32
2.12 Budget Planning.....................................................................................................................33
2.13 Summary................................................................................................................................34
Chapter 3........................................................................................................................................35
Research Methodology..................................................................................................................35
3.0 Introduction..............................................................................................................................35
3.1 Research Philosophy................................................................................................................35
3.1.1 Justification of Selecting Positivism Philosophy..................................................................36
3.2 Research Approach..................................................................................................................37
3.2.1 Justification of Selecting Deductive Approach....................................................................37
3.3 Research Design......................................................................................................................38
3.3.1 Justification of Selecting Descriptive Design.......................................................................39
3.4 Data Collection Process...........................................................................................................39
3.4.1 Secondary Data Collection Process......................................................................................39
3.4.2 Primary Data Collection.......................................................................................................40
3.5 Sampling Method and Sampling Size......................................................................................42
3.6 Data Analysis Method.............................................................................................................43
3.7 Accessibility Issues..................................................................................................................43
3.8 Ethical Consideration...............................................................................................................44
3.9 Time Schedule.........................................................................................................................44
4
2.9 Implementation Plan................................................................................................................30
2.10 Outcomes of the Key Stakeholders Group............................................................................31
2.11 Resource Implications...........................................................................................................32
2.12 Budget Planning.....................................................................................................................33
2.13 Summary................................................................................................................................34
Chapter 3........................................................................................................................................35
Research Methodology..................................................................................................................35
3.0 Introduction..............................................................................................................................35
3.1 Research Philosophy................................................................................................................35
3.1.1 Justification of Selecting Positivism Philosophy..................................................................36
3.2 Research Approach..................................................................................................................37
3.2.1 Justification of Selecting Deductive Approach....................................................................37
3.3 Research Design......................................................................................................................38
3.3.1 Justification of Selecting Descriptive Design.......................................................................39
3.4 Data Collection Process...........................................................................................................39
3.4.1 Secondary Data Collection Process......................................................................................39
3.4.2 Primary Data Collection.......................................................................................................40
3.5 Sampling Method and Sampling Size......................................................................................42
3.6 Data Analysis Method.............................................................................................................43
3.7 Accessibility Issues..................................................................................................................43
3.8 Ethical Consideration...............................................................................................................44
3.9 Time Schedule.........................................................................................................................44
4
3.10 Summary................................................................................................................................45
4.0 Introduction..............................................................................................................................47
4.1 Part A Survey...........................................................................................................................47
Quantitative data............................................................................................................................47
4.2 Part B Qualitative data.............................................................................................................62
4.3 Summary..................................................................................................................................63
Chapter 5........................................................................................................................................64
Conclusion and Recommendation.................................................................................................64
5.0 Conclusion...............................................................................................................................64
5.1 Linking Objectives with Literature Review and Primary Data Information...........................64
5.2 Recommendations....................................................................................................................66
5.3 Future Scope of the Research..................................................................................................67
References......................................................................................................................................68
Appendix........................................................................................................................................78
5
4.0 Introduction..............................................................................................................................47
4.1 Part A Survey...........................................................................................................................47
Quantitative data............................................................................................................................47
4.2 Part B Qualitative data.............................................................................................................62
4.3 Summary..................................................................................................................................63
Chapter 5........................................................................................................................................64
Conclusion and Recommendation.................................................................................................64
5.0 Conclusion...............................................................................................................................64
5.1 Linking Objectives with Literature Review and Primary Data Information...........................64
5.2 Recommendations....................................................................................................................66
5.3 Future Scope of the Research..................................................................................................67
References......................................................................................................................................68
Appendix........................................................................................................................................78
5
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List of Figures
Figure 1.1: Research Structure......................................................................................................15
Figure 2.1: Estimated Online Retail Sales.....................................................................................22
Figure 2.2: Porter’s Five Forces....................................................................................................24
Graph 4.1 Gender of the customers...............................................................................................48
Graph 4.2 Durability of the customers regarding the online purchases........................................49
Graph 4.3 Response of the customers regarding the current performance of the online shopping
services..........................................................................................................................................51
Graph 4.4 Satisfaction levels of the customers regarding online services fulfilling their dreams of
possessing branded products..........................................................................................................52
Graph 4.5 Important factors for the customers while making online purchases...........................54
Graph 4.6: Preferences of customers regarding online grocery purchase and store visits............55
Graph 4.7: Response of the customers regarding the presence of essential factors for receiving
quality products.............................................................................................................................57
Graph 4.8: Reasons why customers prefer to buy grocery items online.......................................59
Graph 4.9 : Satisfaction of the customers regarding the services of the ecommerce sites............60
Graph 4.10: Preference of online sites for purchasing grocery items............................................61
6
Figure 1.1: Research Structure......................................................................................................15
Figure 2.1: Estimated Online Retail Sales.....................................................................................22
Figure 2.2: Porter’s Five Forces....................................................................................................24
Graph 4.1 Gender of the customers...............................................................................................48
Graph 4.2 Durability of the customers regarding the online purchases........................................49
Graph 4.3 Response of the customers regarding the current performance of the online shopping
services..........................................................................................................................................51
Graph 4.4 Satisfaction levels of the customers regarding online services fulfilling their dreams of
possessing branded products..........................................................................................................52
Graph 4.5 Important factors for the customers while making online purchases...........................54
Graph 4.6: Preferences of customers regarding online grocery purchase and store visits............55
Graph 4.7: Response of the customers regarding the presence of essential factors for receiving
quality products.............................................................................................................................57
Graph 4.8: Reasons why customers prefer to buy grocery items online.......................................59
Graph 4.9 : Satisfaction of the customers regarding the services of the ecommerce sites............60
Graph 4.10: Preference of online sites for purchasing grocery items............................................61
6
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List of Tables
Table 2.1 SWOT Analysis.............................................................................................................28
Table 2.2 Key Stakeholders...........................................................................................................31
Table 2.3 Financial Budget............................................................................................................34
Table 3.1: Timeline........................................................................................................................45
Table 4.1: Gender of the customers...............................................................................................48
Table 4.2: Durability of the customers regarding the online purchases........................................49
Table 4.3: Satisfaction of the customers regarding the current performance of the online
shopping services...........................................................................................................................50
Table 4.4 Satisfaction of the customers regarding online services fulfilling their dream of
possessing branded products..........................................................................................................52
Table 4.5 Important factors for the customers while making online purchases............................54
Table 4.6 Preference of online shopping over store visits.............................................................55
Table 4.7 Response of the customers regarding the presence of essential factors for receiving
quality products.............................................................................................................................57
Table 4.8 Reasons why customers prefer to buy grocery items online.........................................58
Table 4.9 Satisfaction of the customers regarding the online services of the ecommerce sites....60
Table 4.10 Preferred online sites for purchasing grocery items....................................................61
7
Table 2.1 SWOT Analysis.............................................................................................................28
Table 2.2 Key Stakeholders...........................................................................................................31
Table 2.3 Financial Budget............................................................................................................34
Table 3.1: Timeline........................................................................................................................45
Table 4.1: Gender of the customers...............................................................................................48
Table 4.2: Durability of the customers regarding the online purchases........................................49
Table 4.3: Satisfaction of the customers regarding the current performance of the online
shopping services...........................................................................................................................50
Table 4.4 Satisfaction of the customers regarding online services fulfilling their dream of
possessing branded products..........................................................................................................52
Table 4.5 Important factors for the customers while making online purchases............................54
Table 4.6 Preference of online shopping over store visits.............................................................55
Table 4.7 Response of the customers regarding the presence of essential factors for receiving
quality products.............................................................................................................................57
Table 4.8 Reasons why customers prefer to buy grocery items online.........................................58
Table 4.9 Satisfaction of the customers regarding the online services of the ecommerce sites....60
Table 4.10 Preferred online sites for purchasing grocery items....................................................61
7
Chapter 1
Introduction
1.0 Introduction
The trends of online shopping have been influencing the customers worldwide. In today’s
world, the customers are much inclined towards the sophisticated use of the online retailing. The
online retail market in United Arab Emirates signifies the significant growth each year (Bell
2010). Availability of the high number of retailers is quite significant in contributing growth to
the economic structure of the country. Even though the market share is less in compare to the
markets of Western Europe, but it is relatively high when it is compared to the other markets
included in the Gulf Cooperation Council. The study would consider the market feasibility of
Grocery Online, which is a start-up online retail store selling the grocery products to the people
of United Arab Emirates.
This chapter of the study would provide the complete background of the online grocery
market in United Arab Emirates. The details of the company would also be discussed in this
chapter. The identification of the problem statement and research rationale would help in
developing the aim, research objectives, and research questions. The chapter would provide the
insightful ideas about the entire research process. Depending on the research problem identified
in this chapter, the further literature section would provide the theoretical background of the
subject matter.
8
Introduction
1.0 Introduction
The trends of online shopping have been influencing the customers worldwide. In today’s
world, the customers are much inclined towards the sophisticated use of the online retailing. The
online retail market in United Arab Emirates signifies the significant growth each year (Bell
2010). Availability of the high number of retailers is quite significant in contributing growth to
the economic structure of the country. Even though the market share is less in compare to the
markets of Western Europe, but it is relatively high when it is compared to the other markets
included in the Gulf Cooperation Council. The study would consider the market feasibility of
Grocery Online, which is a start-up online retail store selling the grocery products to the people
of United Arab Emirates.
This chapter of the study would provide the complete background of the online grocery
market in United Arab Emirates. The details of the company would also be discussed in this
chapter. The identification of the problem statement and research rationale would help in
developing the aim, research objectives, and research questions. The chapter would provide the
insightful ideas about the entire research process. Depending on the research problem identified
in this chapter, the further literature section would provide the theoretical background of the
subject matter.
8
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1.1 Research Background
The online grocery market of United Arab Emirates has been signifying the remarkable
growth since past few decades. It is reported that in the year of 2014, the grocery market of UAE
was worth US$28.7 billion, which was 1.1% higher than the market share of 2013. The country
scored highest in the income rate among all other countries in the world. The UAE residents
spent almost US $3,088 per capita on grocery shopping (Agr.gc.ca 2017). This grocery market of
UAE is the emerging market for the importers from foreign countries (Bell 2014). People in
UAE demand the healthier and convenient foods due to their busy schedule and well awareness
about fitness. Therefore, they are inclined towards consuming the healthy food as per their
convenience. The online grocery shops ensure the convenient product samplings as per the
customers’ choice. The availability of the filter search helps the customers to identify the high
quality, variations, and lower cost grocery products (Atlason and Gerstlberger 2017). On the
contrary, the online grocery stores in United Arab Emirates have been experiencing enormous
competition from their rivals. Moreover, people are concerned about the online transactional
process. The lack of online security may affect the information or customer details provided
through the online transaction system. In such cases, the banking details of the customers would
be under the severe risks. Hence, it is important for the online retail store operators to identify
the malicious elements that may cause the malfunctioning in the online transaction process.
1.2 Background of the Company
e-Grocery is the start up business that is looking forward to sell the online grocery
products to the people of United Arab Emirates. The company is utilizing the high quality
technical tools to formulate the online hub from where the customers would receive the access to
order the grocery products (Hafeez et al. 2016). The focus of the company is to gain more profits
9
The online grocery market of United Arab Emirates has been signifying the remarkable
growth since past few decades. It is reported that in the year of 2014, the grocery market of UAE
was worth US$28.7 billion, which was 1.1% higher than the market share of 2013. The country
scored highest in the income rate among all other countries in the world. The UAE residents
spent almost US $3,088 per capita on grocery shopping (Agr.gc.ca 2017). This grocery market of
UAE is the emerging market for the importers from foreign countries (Bell 2014). People in
UAE demand the healthier and convenient foods due to their busy schedule and well awareness
about fitness. Therefore, they are inclined towards consuming the healthy food as per their
convenience. The online grocery shops ensure the convenient product samplings as per the
customers’ choice. The availability of the filter search helps the customers to identify the high
quality, variations, and lower cost grocery products (Atlason and Gerstlberger 2017). On the
contrary, the online grocery stores in United Arab Emirates have been experiencing enormous
competition from their rivals. Moreover, people are concerned about the online transactional
process. The lack of online security may affect the information or customer details provided
through the online transaction system. In such cases, the banking details of the customers would
be under the severe risks. Hence, it is important for the online retail store operators to identify
the malicious elements that may cause the malfunctioning in the online transaction process.
1.2 Background of the Company
e-Grocery is the start up business that is looking forward to sell the online grocery
products to the people of United Arab Emirates. The company is utilizing the high quality
technical tools to formulate the online hub from where the customers would receive the access to
order the grocery products (Hafeez et al. 2016). The focus of the company is to gain more profits
9
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from the UAE customers by offering them high quality grocery products and secure online
transaction process. It is essential for the business to conduct the extensive market research to
ensure the market demands and market feasibility. The business is even looking forward to
gather more capital amount to structure the business with proper technological development. The
major focus of the company is to offer the high quality and healthy grocery and food products
and gather the remarkable customer base (Schilirò 2015). The development of the technological
tools for the secure online transactions would be much beneficial to gain trust. Hence, the
business requires structuring a systematic business plan by conducting the required market
research and developing necessary functionalities.
1.3 Rationale of the Research
The current scenario in UAE online grocery market specifies the competitiveness among
the rivals. It has been observed that the profits generated from the online retailing process have
contributed much significantly to improve the economic structure of the country. The customers
in UAE are much fond of shopping through online sites (Agr.gc.ca 2017). The rising confidence
of the consumers in online retailers, lower price of the grocery products, and security in
transacting money through online sources are much in favour of establishing the online grocery
shop in United Arab Emirates. However, sometimes, the online retailers experience the
significant challenges in selling through online sites. First, the competitive landscape in UAE is
quite recognizable. The online retailers need to pay attention towards the value added purposes
in order to gather the attention of the customers (Marickar and Rajsekar 2014). The unique value
presented in the online purchasing process would influence the customers’ motifs.
10
transaction process. It is essential for the business to conduct the extensive market research to
ensure the market demands and market feasibility. The business is even looking forward to
gather more capital amount to structure the business with proper technological development. The
major focus of the company is to offer the high quality and healthy grocery and food products
and gather the remarkable customer base (Schilirò 2015). The development of the technological
tools for the secure online transactions would be much beneficial to gain trust. Hence, the
business requires structuring a systematic business plan by conducting the required market
research and developing necessary functionalities.
1.3 Rationale of the Research
The current scenario in UAE online grocery market specifies the competitiveness among
the rivals. It has been observed that the profits generated from the online retailing process have
contributed much significantly to improve the economic structure of the country. The customers
in UAE are much fond of shopping through online sites (Agr.gc.ca 2017). The rising confidence
of the consumers in online retailers, lower price of the grocery products, and security in
transacting money through online sources are much in favour of establishing the online grocery
shop in United Arab Emirates. However, sometimes, the online retailers experience the
significant challenges in selling through online sites. First, the competitive landscape in UAE is
quite recognizable. The online retailers need to pay attention towards the value added purposes
in order to gather the attention of the customers (Marickar and Rajsekar 2014). The unique value
presented in the online purchasing process would influence the customers’ motifs.
10
The customer sophistication and high internet penetration are the major factors that have
the clear impacts on the customers’ purchase behaviour. Secure payment gateways are also
helpful enough in drawing the attention of the customers. However, it is notable that the e-
commerce growth is not likely to challenge the shopping malls; rather it is a compliment.
However, the customers seek for the product variations from a single source (Ahmed and Shawli
2014). The filter search available in the online retail shops is helpful for the customers to search
for the proper price and product variations as per their convenience. The technological
development is also an important concern for ensuring the secure transaction process. The
customers are much concerned about providing their banking details over the internet in order to
make a payment. It is essential to establish the secure gateway to protect the information from
being hacked. It would be helpful in building trust (Kinder 2016). The reliability generated
among the consumers would ensure the business sustainability for long run. The description of
these concerns is needed to be taken into account while formulating the structured business plan.
1.4 Scenario Chosen
The research is based on the development of the online grocery shop in United Arab
Emirates. The company, e-Grocery is a startup business, which is looking forward to establish
the online grocery shop by targeting the customers from United Arab Emirates. It is essential for
the company to pay attention towards the market demands and market acceptability. The online
retailing market in United Arab Emirates is quite competitive (Zeffane 2015). Therefore, the
company requires a structured business plan to establish and survive in this competitive
landscape. Few of the essential factors have the clear impact on the purchasing behaviour of the
customers. For instance, the customers perceived for the high quality products with lower costs.
Sometimes, the customers look for product variations from a single source. The online shopping
11
the clear impacts on the customers’ purchase behaviour. Secure payment gateways are also
helpful enough in drawing the attention of the customers. However, it is notable that the e-
commerce growth is not likely to challenge the shopping malls; rather it is a compliment.
However, the customers seek for the product variations from a single source (Ahmed and Shawli
2014). The filter search available in the online retail shops is helpful for the customers to search
for the proper price and product variations as per their convenience. The technological
development is also an important concern for ensuring the secure transaction process. The
customers are much concerned about providing their banking details over the internet in order to
make a payment. It is essential to establish the secure gateway to protect the information from
being hacked. It would be helpful in building trust (Kinder 2016). The reliability generated
among the consumers would ensure the business sustainability for long run. The description of
these concerns is needed to be taken into account while formulating the structured business plan.
1.4 Scenario Chosen
The research is based on the development of the online grocery shop in United Arab
Emirates. The company, e-Grocery is a startup business, which is looking forward to establish
the online grocery shop by targeting the customers from United Arab Emirates. It is essential for
the company to pay attention towards the market demands and market acceptability. The online
retailing market in United Arab Emirates is quite competitive (Zeffane 2015). Therefore, the
company requires a structured business plan to establish and survive in this competitive
landscape. Few of the essential factors have the clear impact on the purchasing behaviour of the
customers. For instance, the customers perceived for the high quality products with lower costs.
Sometimes, the customers look for product variations from a single source. The online shopping
11
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