Setting Pace For eCommerce In MENA: Do We Sense Shift in Shopping Patterns?

The UAE is an eccentric geographic country that is spread over three continents. It comprehends some very prosperous oil-producing countries such as Saudi Arabia and the United Arab Emirates, besides more diverse finance countries like Turkey and Egypt. 

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This continent has a lot of the fair elements for the victorious e-commerce industry. The population comprises the younger generation, and it’s huge. The combined GDP of this continent is $3.9 trillion, putting it on equivalence with Germany, which is considered the fourth largest wealthy country in the world. Using the internet kick-started in the mid-2000 mainly steered with smartphones and social media. 

Having the richest population and big internet usage, e-commerce will be very well entrenched in this part of the continent. But, the stake of online retail in concern with the total percentage of sales in the Middle East is above 2%. In the richest countries of the Gulf Cooperation Council (GCC), e-commerce sales are just 3% of total retail. In collaboration, e-commerce in the US extended 2% of total retail sales method back in 2004 and recently it hiked to 14%. 

However, meteoric development is forecast in the Middle East. Ecommerce sales are expected to increase by over 11% every year. That will steadily circulate up online retail’s market portion. Maybe the most interesting feature of e-commerce in this role of the world is the huge segment of cross-border shopping. They gauge that about 66% of online shoppers in the Middle East have gained from businesses out of their country. It will be a huge chance for sellers around the globe. 

There is a huge rise in the number of shoppers in the Middle East and North Africa (MENA) region adopting online shopping, and retail shopping is feeling the loot. 

Some factors that the brands demand when considering approaching the Middle East’s e-commerce space.

Using the UAE as a beta test for MENA:

With its multiracial population, of which 80% are diligently online, the UAE has one of the sky-high global internet perception levels per capita. To add to this, the government has refreshed the adoption of the digital lifestyle. 

The region isn’t homogeneous:

Although the UAE provides a good initial point, mainly because of its investment in technology and transformation, it cannot be always calculated as the perfect measure for the rest of the continent. It is pointless to say that every country has its own modulation in language, culture, inclination, and henceforth, despite all these, they judged the entire continent under a single optic. For example, in Saudi Arabia, the retail sector rates highest in the continent, but depending on cash on delivery or COD, has decelerated its development in the online world. Also, less usage of credit cards in Saudi Arabia, linked with common skepticism of online habitat, has permitted 70% of e-commerce transactions to be COD. Although strategically it is incapable, this works for Saudi Arabia presently. 

Alternatively, UAE shopping patterns are comparatively different. A survey conducted by Hall and Partners recommended that female UAE native shop both online and in-store, with an interesting number opting for the former. There is high availability of income and an abundance of credit card perception. Women in the UAE are shopping more in fashion than before, some doing it on a weekly basis. Since the UAE is interdependent on COD, they did the bulk transactions through credit cards. For example, the Middle East’s largest e-commerce site Souq affirms that 60% of their proceedings are through credit cards. It is tough to accommodate such set-off shopping habits in two countries as it is topographically situated close to each other, but both continue to be handled with the identical approach. That’s why it is a necessity for brands to take this into account while thinking about launching the e-commerce sector in this region. 

It is the right time:

Identifying the UAE’s potential in e-commerce, the US retail massive Amazon, in the year 2016 bid for Souq. After exiting from a deal that year, conciliation started, and finally, Amazon bought the firm for USD650 million. Professionals at Bloomberg Technology voice that this is, in fact, one of Amazon’s largest investments in recent years. Parallelly, NOON, a USD1 billion venture, with an organized launch in late 2017, will bring 20 million products, which are ten times more than Souq. The firm hopefully aims to handle the development of online sales beyond the region from 2% to 15% in the future. Conflicting to what some may imagine, the appearance of noon and the enormous investment that lay down into the plan will only uplift e-commerce in the region that will be widespread. The region is on the verge of becoming an important benefactor to the global e-commerce market, and both worldwide and local competitors have admitted this. 

To conclude, e-commerce’s prominent business model of ‘click and deliver’ has adequately changed the method brands interrelate with and reach consumers, counting the MENA region. The development and success of e-commerce in the UAE is the origin of shifts in shopping habits. Brands have to keep in mind the younger generation and need to grow online measures to be successful on the local and global levels. The founder of noon Mohamed Alabbar rightly pointed out “Today you’re digital, or you die”.

I, Priya Nagarajan, is a past Assistant Professor, mentor, tutor, counselor. Writing has always been a passion of mine and so changed my path to my passion. I believe language is the best way to convey your thoughts and dreams to get the results. I believe it takes a personal approach to reach individual success. I write with a flair for creativity and a keen eye for the professional.

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