E-commerce in the Middle East

E-commerce in the Middle East is growing very fast. Gulf States went from $5 billion in profit in 2015 to $20 billion in 2020. In the Middle East, retail e-commerce sales are expected to achieve $48 billion by 2022. Traditional brick-and-mortar stores in the Middle East are more aware today of the importance of having a digital presence and consumers are more conscious and expect high quality and valuable products and services from the e-merchants and do pre-purchase research on different platforms and a variety of devices.

E-commerce in the Middle East

Table of contents :

Facts about e-commerce in the Middle East

Why is e-commerce in the Middle East a wise choice?

What are the challenges facing e-commerce in the Middle East?

What does consumer behavior look like in the Middle East?

What are the e-commerce trends in the Middle East?

How Covid19 changed e-commerce in the Middle East?

Why is e-commerce in the Middle East an excellent market to work in?

E-commerce in the Middle East is growing very fast. Gulf States went from $5 billion in profit in 2015 to $20 billion in 2020. In the Middle East, retail e-commerce sales are expected to achieve $48 billion by 2022. Traditional brick-and-mortar stores in the Middle East are more aware today of the importance of having a digital presence and consumers are more conscious and expect high quality and valuable products and services from the e-merchants and do pre-purchase research on different platforms and a variety of devices.

Here are some facts about e-commerce in the Middle East:

  • The majority of MENA shoppers (66%) are purchasing from outside the region
  • In UAE and Saudi Arabia, the most bought products are: electronics, grocery, home products, Fashion & Beauty and make-up
  • UAE shoppers spend around $122 per transaction
  • 48 % of internet users in the Middle East buy items online
  • Before purchasing, 85% of consumers in the UAE and 80% in KSA use their mobile devices to get information about what they want to buy
  • E-commerce in Middle East is 80% dominated by UAE and KSA
  • In 2020, Cash On Delivery (COD) is 30% used by shoppers as a method of payment
  • MENA consumers use Social Media to find to product they want to buy (70% Facebook , 59% Instagram)

Why is e-commerce in the Middle East a wise choice?

As one of the youngest populations in the world, the Middle East is one of the perfect destinations to invest in your e-commerce business. In this sense, 28% of the population is between the ages of 15 and 29. Also, some countries in the Middle East have the highest internet and mobile penetration rates.

What are the challenges facing e-commerce in the Middle East?

  • The lack of postal addresses in some countries in the Middle East:

In some countries in the Middle East, there is no home delivery system and many regions lack zip codes. For this reason, e-commerce businesses might struggle when it comes to delivering items to consumers based on a district name or a city postcode. This means that the delivery man should be familiar with the city’s layouts which make it hard for e-merchants who desire to send products directly from their country to a consumer residing in one of the countries in the Middle East suffering from this problem.

  • The lack of confidence amongst consumers and merchants:

Several users avoid purchasing online because of the lack of trust in the region’s online payments process. Similarly, merchants prefer payments in cash, due to the low trust in the banking system and the ignorance of alternative payments methods. To alleviate this, merchants should accept more card payments to increase online sales as well as international sales and collaborate in making e-commerce in the Middle East much easier.

  • Preference for COD (Cash On Delivery) over digital payments:

Report revealed that up to 80% of the deals in the Middle East are still done in cash because of cybercrime and also because consumers in the middle east prefer to check the condition of the products before making the payment. For this, e-commerce businesses in the Middle East should put huge efforts into implementing fraud prevention to keep their customers more confident to shop online without any fears.

What does consumer behavior look like in the Middle East?

E-commerce in the Middle East is more present among younger people aged between 18 and 24. Young consumers shop at least once a month driven mostly by the motivation of low prices as the principal factor in addition to the quality of products and services. In the Middle East, e-shoppers are more likely to buy books, video games, health and beauty products, electronics and computers, jewellery, watches and clothing than buying groceries.

Middle Eastern shoppers shop mainly using their mobile devices and pay huge attention to social media reviews while making a purchase. Most e-commerce sales in the Middle East were paid for through Cash On Delivery.

They are also very concerned about their security and don’t want their personal information to be revealed. This is why the online buying process in the Middle East relies hugely on having a mobile-friendly and secure platform.

  • Arabic language:

Launching Arabic language sites or adding Arabic language to your website is extremely important in attracting more customers who usually avoid shopping online due to language barriers.

  • Effect of social media:

Middle Eastern e-shoppers are highly influenced by product’s reviews on social media platforms.

  • Digitization of the restaurant industry:

The restaurants in the Middle East are growing due to digital evolution, and are today generating a majority of their business online.

  • Transforming payment methods:

Currently, the majority of payments in e-commerce in the Middle East are made through cash on delivery. However, the government is working hard in order to change the region’s payment ecosystem.

How Covid19 changed e-commerce in the Middle East?

The Covid19 pandemic forced the majority of businesses in the Middle East to opt for e-commerce. The lockdown measures helped in accelerating the development of an already growing e-commerce sector. Today, customers have become more conservative in money spending and search for high quality products with reasonable prices. Also, digital payment methods increased in the Middle East due to Covid19 crisis and shoppers are more open to use their credit cards for online transactions.

Why is e-commerce in the Middle East an excellent market to work in?

  • The Middle East region has one of the strongest internet penetration in the world which makes people there ready to shop online.
  • Since the Covid19, e-commerce in the Middle East has relied on contactless and cashless payments, not only cash on delivery payment methods.
  • The per-capita spending in the Middle Eastern countries is the highest in the world, especially GCC that are within the top wealthiest nations in the whole world.
  • E-commerce in the Middle East is mostly on social media and shoppers are very active on different platforms.

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