Jul 08, 2021 / by admin / in: Blog
Are you thinking about launching an e-commerce business in the Middle East or the GCC? Or perhaps you are simply interested to know what the future holds for these prosperous countries in terms of online sales.
Before you inspect the future, it is always a good idea to delve into the past to see how this has affected the present. The Middle East region has always had a complex relationship with online sales, predominantly due to a lack of physical addresses and a deep-rooted preference for face-to-face interactions.
Moreover, these cultures have always traditionally preferred to use cash payments rather than credit cards or online payment systems, which has further contributed to the comparatively slow uptake of e-commerce compared to other areas of the world.
Recently, all begun to change after the appearance of the e-commerce big players like Souq.com (which has been acquired by Amazon), Jumia, Noon, etc. And the growth of mobile wallets in the Gulf countries (Kingdom of Saudi Arabia, UAE, Kuwait, Qatar, and Bahrain) which both played a pivotal role in changing perceptions of e-commerce within this region.
Today, Middle Eastern consumers are some of the most connected in the world, spending over 8 hours a day online and boasting the highest smartphone penetration rate globally at 83%. A recent economic report from the MasterCard Economics Institute showed that over 72% of Egyptians have shopped online since February 2020. The institute estimated a steady increase in e-commerce spending at a rate of 20-30% of the total spending on retail trade due to the pandemic.
Online sales in the MENA region are now expected to exceed $50 billion by the end of 2022, boosted by a surge in e-commerce due to the global coronavirus pandemic.
The figure is up from the previously estimated figure of $26 billion, due to the impact of Covid-19 on the regional retail industry, according to DeVere Forster, chief operating officer, Dubai CommerCity, the region’s first dedicated e-commerce free zone.
The future of e-commerce in the Middle East is undeniably bright, as we have explored above, with the COVID-19 pandemic acting as a catalyst toward greater internet usage in the region and for businesses to embrace e-commerce solutions.
However, although the Middle East has an internet penetration that is significantly higher than the global average, it is still predominantly only the larger retailers that have taken advantage of this fast-growing market. This means that there is a great opportunity for small businesses in the Mena Region to take their offerings online and reach a much wider and more lucrative audience.
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