10-Minute Delivery: Is It Enough to Redefine the Grocery Business?

Islam Zween, CEO of Argaam

✍️ Islam Zween: We have long measured the success of grocery companies by the number of branches, sales, and market share. But perhaps that was the wrong question from the start.

Because a company that owns the relationship with the customer can build whatever it wants on top of it—data, advertising, and recurring services. As for those that do not own this relationship, they may find themselves over time merely a supplier of goods within a platform whose decisions, customers, and data are owned by others. This transformation did not happen in a single day. Sectors do not change due to a single pivotal decision, but by the accumulation of signals that appear, on the surface, to be separate and unrelated, until the day comes when it is clear they were pointing in the same direction all along. This is exactly what we observed at Argaam Intelligence over the past months, as we followed a number of deals and trends that initially seemed like independent stories in their own context. However, when read together, they reveal a deeper transformation running through the heart of the grocery and on-demand express delivery sector. We reviewed the acquisition of InstaShop by Talabat, then the acquisition of Snoonu by Jahez. We paused at the concept of the 'renter economy' and how value in many industries is gradually shifting from owning physical assets to owning a direct relationship with the customer—resulting in deep customer knowledge, recurring revenue without the need for constant re-acquisition, and a growing ability to build new services and activities on top of this relationship as it expands and deepens. We read each story in its own context and logic, only to realize that these stories together were telling a story of a larger transformation in a single sector. At a time when traditional grocery chains are facing increasing pressure on growth and margins, the 'quick commerce' sector continues to attract investment and expand despite ongoing profitability challenges. In Saudi Arabia, the conversation is no longer limited to traditional players; new models like Ninja have emerged, becoming a force that is difficult to ignore in the grocery delivery market in a short period.

Perhaps what caught my attention most is that the prevailing discussion still reduces this shift to a simple binary: the fastest delivery wins. In my opinion, this is a reading that sees the product but not the business model. The real difference is not measured by the minutes it takes for delivery, but by who owns the daily relationship with the customer. For many years, retailers competed on branch locations, display space, and the ability to negotiate with suppliers. Today, competition seems to be gradually shifting to the phone screen, where the relationship with the customer is built, data is collected, and new revenue streams are created that go beyond selling the products themselves. Hence the idea for this issue. Instead of chasing news event by event, the Argaam Intelligence team decided to pause and ask the most important question: Is quick commerce fundamentally redrawing the economics of the grocery sector? To answer this, we are publishing two complementary studies this week that look at the scene from two different angles, but converge on the same conclusion:

● The first provides a comprehensive look at the evolution of the quick commerce sector globally, and how markets have shifted from funding growth at any cost to focusing on unit economics, capital discipline, and sustainable profitability, under the title: '10 Minutes for Delivery… Where Are the Profits? (A Reading into Quick Commerce Models and Their Valuations).'

● The second study takes this hypothesis deeper by analyzing the business models of Zepto, one of the fastest-growing quick commerce companies in the world, and Al-Othaim, to understand if current operational indicators really reflect the proximity of this model to achieving sustainable profitability—and what that means for the future of the entire sector, under the title: 'Is Quick Commerce Devouring Traditional Grocery in Saudi Arabia? (What Zepto's Economics Reveal).'

In the context of the anticipated public offerings in the quick commerce sector in emerging markets, the experience of a digital platform that suddenly decided to postpone its long-awaited IPO in the Arab Gulf countries offers a lesson worth contemplating: the market is not satisfied with growth figures alone; it asks about the source and nature of losses. Perhaps our regular readers realize that what they hold today in this new issue of Argaam Weekend is not a single analysis, but the station that all previous stops were leading to. The studies we released on acquisition deals in the delivery sector and the concept of the 'renter economy' were all surrounding one question from different angles without explicitly naming it. Today, we name it. The real question was never about groceries or delivery—but about who makes the customer return on their own. The winner is no longer the one who sells the most, but the one who knows their customer the best and builds upon that knowledge something that competitors cannot easily replicate.