More M&A deals expected in GCC's healthcare, online food delivery markets

Companies in the healthcare and online food delivery space in the Gulf Cooperation Council (GCC) region are likely to see some consolidation post-COVID-19, as bigger players seek more market share, according to the latest analysis by ValuStrat Advisory. 

These sectors have continued to survive during the pandemic, despite lockdowns, social distancing and strict mobility restrictions. The food delivery segment, for one, has seen a surge in spending since last year, while telehealth has gained traction, as the outbreak triggered a shift from physical to contactless transactions. 

However, not all businesses in these markets are created equal, and some don’t have enough liquidity to stay afloat or compete with their stronger rivals. 

“We expect to see increased consolidation through merger and acquisitions activity within the regional healthcare sectors, as smaller private healthcare groups increasingly face liquidity challenges caused by the downturn in revenue streams because of this pandemic,” the report said. 


According to ValuStrat Advisory, public healthcare spending in the region, particularly Saudi Arabia and Qatar, has reduced during the outbreak, but the Gulf has seen a “significant increase” in the integration of digital healthcare solutions. In the UAE, the Ministry of Health and Prevention recorded nearly 50,000 virtual hospital visits by the end of the third quarter last year. 

Saudi Arabia’s government and private sectors have developed and launched approximately 19 apps and platforms that deliver online healthcare services. In Qatar, the healthcare sector has rapidly diversified and expanded telehealth and telemedicine services for urgent and emergency care, chronic care, paediatric care, mental health, elderly care and home delivery of medications. 

“Telehealth is a fast-growing sub-segment within the healthcare market, increasing on account of changing preferences and the advent of FG, the biggest enabler in automating invasive medical procedures going forward,” Valustrat Advisory said. 

“We expect to see increased consolidation through M&A within the regional healthcare sectors.” 

In the UAE, Dubai and Abu Dhabi can also benefit from an increase in demand for “vaccine tourism” as vaccination rates in many markets around the world remain low. 

Online food delivery 

The online food delivery segment in the region has grown during the pandemic. According to Statistica, the food-delivery markets in Saudi Arabia, UAE and Qatar were estimated to be worth $1.55 billion, $1.09 billion and $185 million, respectively, in 2020. 

Food delivery company Deliveroo has recently announced the opening of its largest cloud kitchen in Dubai. A pandemic-led boom in online food deliveries can also be seen in markets like Qatar. 

However, the report said that as demand climbed, more players have entered the market. There are also concerns about oversupply in developed markets because of the entrance of new players.  

“Given the entry of many new firms in the market, going forward we see some consolidation through mergers and acquisitions,” the report said. 

“We also predict further disruption in the business model of online delivery as the current framework banks on sky-high commissions which is not sustainable. Blockchain technologies have the potential to re-disrupt the market offering with reduced cost to serve for F&B outlets.” 




Share this page Share on FacebookShare on TwitterShare on Linkedin

Read our latest publication

'Bahrain-France Investor Guide' -
is YOUR guide to invest in Bahrain and in France. Click here to view the online guide