GCC Last Mile Delivery Market Outlook (2021-2031)

The GCC last mile delivery market size is projected to reach USD 25,999 million by 2031, up from USD 14,623.10 million in 2024. The market is estimated to grow at a compound annual growth rate (CAGR) of 8.6% from 2025 to 2031.

Market Analysis:

The UAE's last mile delivery market is primarily driven by the growth of e-commerce, technological innovations, rapid urbanization, and shifting consumer preferences. Stakeholders in this sector must stay agile and forward-thinking to capitalize on evolving dynamics and meet modern consumer expectations. The last mile delivery market in the UAE is expected to continue growing due to the increasing adoption of AI, machine learning, and automation, which will enable businesses to optimize operations and enhance customer satisfaction. Companies that successfully integrate sustainability and technological advancements into their delivery models will have a competitive advantage in the coming years.

As the UAE aims to become a global logistics hub, investments in both physical infrastructure (such as warehouses and transportation networks) and digital infrastructure (including real-time tracking systems) will continue to shape the market landscape. The UAE's ability to maintain its status as a regional and global logistics leader depends on addressing challenges such as traffic congestion, regulatory complexities, and environmental sustainability. With a strategic focus on digital transformation, sustainability, and customer-centric delivery solutions, the UAE is positioning itself as a leader in the Middle East's logistics ecosystem.

Segmentation Analysis

Key segments contributing to the analysis of the last mile delivery market include type, vehicle type, and end use. The market is segmented into B2C (business-to-consumer) and B2B (business-to-business) based on type. As of 2024, B2C holds the largest share, attributed to the rise in online shopping through e-commerce platforms. In terms of vehicle type, the market includes motorcycles, commercial vehicles, drones, autonomous ground vehicles, and others. Commercial vehicles dominated the market share in 2024, driven by increased adoption by logistics and distribution centers. The market is further divided by end-use into groceries, home essentials, restaurant meals, clothing, consumer electronics, toys, automotive parts, mass merchants, and more. Mass merchant captured the largest share in 2024.

Market Outlook:

Bahrain has seen significant growth in its logistics and e-commerce sectors in recent years. As Bahrain's digital economy expands, propelled by the rise of e-commerce and technological advancements, the demand for efficient and reliable last mile delivery services is increasing. Bahrain's strategic location as a gateway to the Gulf region, coupled with business-friendly policies and robust digital infrastructure, positions it as a hub for both local and international e-commerce players. With a population of approximately 1.7 million and high internet penetration rates, demand for e-commerce and related logistics services has surged.

The last mile delivery market in Bahrain is becoming increasingly competitive, with various players, including traditional logistics providers, third-party logistics (3PL) companies, tech startups, and established e-commerce giants responding to the growing need for rapid and cost-effective delivery services. The rise of e-commerce platforms has led to the emergence of Delivery as a Service (DaaS), where 3PL providers offer comprehensive last mile delivery solutions, including warehousing, inventory management, order fulfillment, and delivery, allowing businesses to outsource their entire delivery process.

In Saudi Arabia, the largest and most populous country in the Middle East, the logistics and e-commerce sectors are rapidly evolving. A growing economy, a young and tech-savvy population, and a government committed to economic diversification are transforming the last mile delivery market. The rise of e-commerce and changing consumer behavior, alongside technological advancements, are driving the expansion of last mile delivery services in the country.

Saudi Arabia's last mile delivery market is significantly influenced by the government’s ambitious economic plans, particularly Vision 2030. This initiative aims to diversify the economy away from oil dependence and establish the country as a global logistics hub. Vision 2030 focuses on diversifying the economy, modernizing infrastructure, and enhancing the logistics sector. The well-developed road infrastructure and advancements in logistics are critical to this transformation.

Market Insights:

The GCC last mile delivery market encompasses the countries of the UAE, Saudi Arabia, Qatar, Oman, Bahrain, and Kuwait. As of 2024, Saudi Arabia holds the largest market share, driven by an increase in online shopping and rising consumer spending within the e-commerce sector.

In Qatar, one of the key factors contributing to the growth of the last mile delivery market is the rising consumer demand for faster and more convenient delivery options. Customers increasingly prefer same-day or next-day delivery, particularly for e-commerce purchases. In response, logistics companies are investing in technology and improving their operations to meet these heightened expectations. Many businesses are experimenting with various delivery models, such as click-and-collect, where customers order online but pick up their items at a local store, as well as hybrid models that combine traditional delivery with locker systems. However, challenges such as traffic congestion and limited access in urban areas hinder the last mile delivery market in Qatar. Despite the government's efforts to enhance infrastructure, traffic congestion remains a significant issue, especially in the capital city of Doha. Delivery schedules can be disrupted by traffic delays and roadblocks during peak hours or in densely populated areas. Additionally, limited access to some residential complexes, along with rapid urban development, can lead to inefficiencies in delivery routes. Companies that leverage technological advancements, improve sustainability efforts, and adapt to changing consumer expectations will be well-positioned for success in this rapidly evolving market.

Kuwait’s last mile delivery market has also experienced significant growth in recent years, driven by urbanization, the rise of e-commerce, the demand for faster delivery options, the increased adoption of advanced technologies, and shifting consumer expectations. As a prosperous nation with a developing digital economy, Kuwait offers a unique landscape for logistics and delivery services, making it an attractive market for both local and international logistics providers.

Kuwait has one of the highest urbanization rates in the Gulf Cooperation Council (GCC) region, with a large portion of the population living in the capital, Kuwait City, and its surrounding areas. This concentration of consumers in urban centers has made last mile delivery more feasible, although logistical challenges still exist in the densely populated parts of the city.

Key Players

Notable players in the market include DHL Group, UPS, RAK Logistics, FedEx, Emirates Logistics, Shipa Delivery, Saudia Cargo, Aramex, and others. These companies are adopting various strategies, including expansion, product innovation, and mergers and acquisitions, to deliver innovative products to consumers and enhance their market share. Show more