Careem, the Dubai-based super app, is reportedly winding down the majority of its consumer services in Saudi Arabia, marking a significant strategic shift in one of its core growth markets. This unconfirmed move signals a major retreat from its multi-service platform ambitions in the Kingdom, with only mobility services like rides and bikes expected to remain active. The development comes just over a year after the company launched its grocery delivery service in Riyadh, raising questions about its future strategy.
Unofficial Signals and a Strategic Pause
News of the retreat emerged through unofficial channels, including a public alumni placement website and social media posts from former employees. A statement on the site from co-founder Abdulla Elyas referred to a “strategic pause” for its quick commerce operations in the Kingdom. This platform was created to help a high-performing team of 62 senior staff members find new employment opportunities following the decision.
Further evidence of the change is visible within the Careem application itself, where users in Riyadh now see a significantly reduced menu of services. Compared to markets like Dubai and Amman, which still feature food and grocery delivery, the Saudi interface has been stripped back. This discrepancy suggests the rollback is recent and may still be in progress, though the company has not yet clarified the changes.
A Contradiction to Recent Strategy
This apparent withdrawal starkly contrasts with the company's recent communications, which consistently positioned Saudi Arabia as a top priority for its super app expansion. Both Careem's leadership and its majority owner, e&, had previously highlighted the Kingdom's growth potential across various verticals. The move follows the December 2023 acquisition by e& of a majority stake in Careem Technologies for $400 million, a deal intended to accelerate this very growth.
In its most recent annual report, e& celebrated strong growth for Careem, specifically citing food, quick commerce, and payments as key drivers of success. The report identified Saudi Arabia as a priority market and described the quick commerce division as a central engine for growth. The wind-down also coincides with a recent leadership transition at the e& Group, adding another layer of complexity to the situation.
A Challenging Market Landscape
Careem's retreat occurs amid a broader contraction and consolidation within Saudi Arabia's highly competitive quick commerce sector. Other venture-backed players have faced significant challenges, with grocery platform Nana entering financial reorganization and Rabbit reportedly exiting the market. This trend suggests widespread difficulties in achieving sustainable unit economics for standalone, dark-store business models in the current environment.
While some companies are struggling, the market is also seeing the rise of different business models that are gaining traction. Partnerships between aggregators and established supermarkets, such as those involving Amazon, Noon, and Jahez, are proving more resilient. Meanwhile, new and well-capitalized entrants like Meituan-owned Keeta are intensifying the competitive pressure on incumbent platforms.
Careem's strategic pivot in Saudi Arabia reflects the volatile nature of the region's on-demand delivery market and a potential industry shift away from capital-intensive models. While the company has not issued an official statement, the move raises critical questions about its long-term super app strategy in the Kingdom. The industry will be watching closely to see if this is a temporary recalibration or a more permanent repositioning in response to evolving market dynamics.
Source: FWDstart