Evolution of E-commerce Consumers in Middle East

March 15, 2019 posted by VANI

Growth of e-commerce in the Middle East

With the descent of e-commerce platforms, the retail game has changed forever. With Asian countries leading the way in tech-driven online shopping portals, the MENA regions are not too far behind. The Middle East in particular, is seen as the next big 'boom'. This market has immense possibilities with high earning and spending potential. In the beginning, online shoppers were in the mercy of retailers dictating the price, but now the tables have turned.

Evolution of ecommerce consumers in middle east VINIEO PIM

Consumer Behavior

Between 2012 and present, the online sales and projections form the Middle East are astounding. Global brands have set up shop here catering to the demands of the consumers. With global giants like Amazon stepping in, and procuring 'Souq' has opened the gates for many others to join. With 55% of the population using smartphones, shopping has become competitive, where one bad review can make or break a company. The shift is global, as consumers have increased their expectations, become more demanding and online portals doing their best to keep up. Understanding consumer behavior and pattern is essential in maintaining consistency and performance of online shopping platforms.

Past, Present and Future Trends

PayPal's statistics showed that 2012 alone, consumers spent $2.9 billion in online shopping. According to a study in 2017 by 'We are social' and 'Hootsuite', the Middle East has the world's highest social media penetration, goes to show that this market is full of thirsty e-commerce consumers. A similar study conducted by Deloitte in 2017 showed that the UAE already had the world's highest social media penetration, and the projection provided by PayFort this year, says that the Middle East e-commerce market would grow to $69 billion by 2020. This rapid growth of e-commerce portals combined with high per-capita income, internet and social media penetration is accelerating at an impressive 15% YoY. This is also due to the fact that, the government has also sanctioned many projects, and loosening regulations to favour e-commerce companies. They are actively trying to make things easier for e-commerce companies.

The Role of Technology

Global e-commerce giant Amazon bought Dubai based Souq for $580 million to get a head start using this base toward the other regions in the Middle East - this sort of omni-channel retailing is essential for big players to understand new markets. Unfortunately, what this also does is hamper the local businesses that rely on the support of locals for their survival. Alongside, Mohamed Alabbar - Dubai's real-estate tycoon, launched another e-commerce platform, 'Noon.com' with help and funding from the Government and private investors to help push the local businesses. With these two players, competition is sparking everywhere.

With online shopping made easy and convenient, there is still resistance from the local consumers with regards to payment - with UAE as an exception, other Middle Eastern countries are still lagging behind, sticking to
'cash-on-delivery', bringing up the cost of operations - this is a major challenge that e-commerce companies are facing. But this does not seem to stop consumers from going online and make purchases - this is still on the upward trend.

With multi players and active governments pushing for seamless online transactions, the locals are still skeptical. Although technology has brought the world on a palm - bringing buyers and sellers on one platform, payment also needs to be addressed and simplified. Apart from the UAE, credit and debit cards have not been accepted for reasons such as: security, online theft and hacking. In spite of the fact that online platforms have changed the way consumers shop, digital payment and processing are yet to be tackled in the Middle East.

E-commerce websites are bringing retailers and consumers closer, enabling buying, selling, processing orders across multiple platforms, using a single device. The market is filled with tech-savvy adults who are looking for ways to reduce their daily stress; online shopping. Dubai is a buzzing market, filled with people from various countries. Hence, the growth and potential projected for this region is higher than anywhere else in the world. E-commerce companies need to step up and give the users better online experiences, competitive prices, seamless payment means and the best of technology. The ball is always in the consumers court!

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