Middle East eCommerce Reimagined


September 16, 2020
5 MIN READ
Vinculum
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The Middle East eCommerce is estimated to grow strong by 48.8 billion dollars in 2021.

Online sales in the Middle East are currently 2% of the total revenue, but a quadruple growth in Gulf states alone is to reach the profits to 20 billion dollars before the end of 2020.

More than 28% of the Middle East is young between 15 and 29, making it ideal in targeting the region.

Countries like Iraq, Egypt, Oman, Lebanon, Morocco, Jordan, Algeria, and Saudi Arabia have the fastest growing young generation, with a median age of 22 years old.

The majority of this younger generation is into smartphone usage and online shopping, promoting eCommerce trends in the region.

Reasons to start selling in the Middle East

  • The Middle East, and especially the Gulf region, also has high per capita income and profits from high spending potential. The fact that internet penetration and social media penetration is one of the reasons behind eCommerce growth in the region.
  • Countries like Iran, Egypt, and Bahrain are some of the countries rank in the highest internet users with more countries on the list. More than 60% of shoppers of UAE and 43% of Egypt start their online shopping research through a search engine and have made at least one transaction online. Low prices, effortless product selection, and convenient instore buying are the top reasons for Middle East consumers buying online.
  • The other reason to start selling in the Middle East is low competition, with very few leading retailers ruling the marketplace. So as the internet penetration is high and local retailers are unable to fulfill the demand, it is the time to extend your business cross-border.
  • Major marketplaces like Noon and Souq.com (now acquired by Amazon) are selling a vast range of products, with faster delivery and competitive prices. Their success in the region shows a high demand for online retail.
  • The government of Middle East countries, understanding the growth of international eCommerce in their countries, is investing in digital payments. The government of Bahrain has issued electronics transaction law to secure the payment gateways and promote shopping online.

Challenges with eCommerce in the Middle East

Delivery Address

Many countries of the Middle East do not have postal code or street addresses. They have informal names, unnamed, or named in multiple languages making international delivery a tedious job. But this is an advantage for local retailers as they know the places around.

However, a Dubai based start-up called Fetchr has come up with a solution of delivering parcels directly to the customers by tapping into the GPS location service on the phone.

Payment Methods

Some countries of the Middle East are familiar with online and card payments. But around eighty-five million adults in the region are without banking institutions for several reasons.

Cash-on-delivery is still a primary mode of payment, thus raising the cost of international eCommerce.

Established Mall culture

The Middle East is known for its unique mall culture and a great lifestyle. The shopping malls in Gulf countries provide full retailing experience with total entertainment, from movie theatres to theme parks, large aquariums, and thousands of shops.

Thus, eCommerce is not going to change the concept of the mall entirely but can invest and strategize to build a robust business.

Reimagining eCommerce post Covid-19

As Covid-19 hit the world, consumer behavior has shifted rapidly to online buying globally, including countries of the Middle East.

Thus, bringing immediate focus on the digital commerce industry and need to implement the technology-driven solutions.

On 27th June 2020 of International MSME Day, Unicommerce organized a mega webinar for the Middle East with 10+ influential eCommerce experts and more than 500 businesses to interact on a single platform.

The purpose of the webinar is to bring sellers, retailers, and all eCommerce businesses to learn and implement best practices to simplify online selling.

It is to provide strategies and solutions to the retailer’s problems in such an uncertain time. The event turned out to be successful, received an overwhelming response, and helped grow the eCommerce business.

Two sessions took place.

  • Session 1 was about E-commerce strategies in a post-COVID-19 era with renowned speakers, from Co-Founder of Salasa, Yellow Messenger, Adyogi to VP Business (ClickPost) and Sales Director (Magento Commerce)
  • Session 2 was all about driving the sales growth of your eCommerce business with speakers from esteemed brands like Wimo, AddBloom, Noon and one of the fastest leading start-ups Freshworks

Summary- Key Points from the Webinar

  • To launch your business online.
  • Make sure your business grows.
  • Focus on improving customer experience.
  • Benefits of implementing of automated supply-chain
  • Make use of social media for sales.
  • Look for more ways to reach your customers.

The speakers emphasized on all of the above points and gave an end-to-end insight of various commerce channels. They also spoke about the analytics and technological logistics importance in an eCommerce business.

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