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The eCommerce industry has experienced a rapid growth in the MENA region over the past three years. Acceptance for doing business online has been slow what with all the yet-to-be resolved safety and security issues creating barriers for this sector. Although establishing an online business in this particular region is still considered a work in progress, the nascent ecommerce landscape is indeed burgeoning with potential. Opportunities are ripe for the taking with Dubai (UAE) winning the Expo 2020 and Qatar hosting FIFA World Cup 2022. Things have never looked better now that the cloud of recession has completely dissipated and traditional as well as emerging market trends are seen spiraling upwards. There is confidence in the air as more and more companies look towards aggressively establishing an online presence.

Convenience and comfort have always been the main attractions for consumers shopping online and are key advantages of ecommerce. According to one forecast: “B2C E-Commerce revenue is expected to rise by more than one third between 2010 and 2015.” In a study, Econsultancy reports: “B2C eCommerce sales in the Middle East region are predicted to reach an estimated $15 billion in 2015 (up from $9 billion in 2012). In addition, the value of mCommerce in the Middle East could reach US $4.9 billion by 2015.”

Another collaborative report published by Visa discloses: “The number of internet users has increased tremendously over the past five to ten years, but the level of penetration still differs widely: from over 86% in Qatar to under 15% in Yemen, Algeria, Pakistan and Iraq. Penetration is highest in the GCC countries with over 53%, compared to an overall penetration of just under 30% for the region (excluding Pakistan), which is just under the world average of 32.7%.”

General online shopping tendencies and performance show ecommerce websites including Cobone, and Souq as market leaders in the industry; the latter being more or less an Arabized version of e-shopping global giant Amazon. Local players such as the digitally advanced Namshi and UAE government-backed Tejuri are not far behind in terms of online selling and buying, creating web stores as well as building a lucrative business presence.

Statistics also show consumers spend their most on travel and buying tickets online, followed by consumer electronics and household items. “Travel tickets are currently the biggest spend for shoppers online in the Middle East, with an average of $1,521 spent each year, followed by $250 on consumer electronics,” reveals a Paypal report.

Noteworthy is popularity of Souq.com with a reported online visitor footprint of about 800,000 from the UAE alone during March 2013. A number of reasons can be cited for this remarkable success namely an online marketplace format selling a wide variety of items from electronics and gadgets, entertainment, household products and so on. The site also offers structured and secure payment/money transaction methods for both e-tailers and consumers such as Cash on Delivery, credit card, paypal as well as Souq’s very own Cash U option – an Arabic-focused pre-pay or mobile payment service.

The popularity of local or domestic ecommerce is indeed increasing day by day. A report by Econsultancy states that 20% of UAE online shoppers go to Souq.com. 10% of Egyptian and 13% of KSA e-consumers also visit the site respectively. The report further informs that while there is high ecommerce penetration, the actual purchasing is still comparatively low.

Security has always been the biggest issue when it comes to making a transaction online with heightened concerns about online frauds, limited product information and most importantly restricted return policies.  Ecommerce business is fast gaining momentum with tech-savvy governments putting more emphasis on going mobile; giving way to developing a more structured and safe e-business environment. Some of the most popular industries online being retail and entertainment, these sectors are predicted to grow exponentially. Motivating consumers online poses the biggest challenge for companies big and small who are looking at means to make their mark virtually. Improving upon product offers, price and item comparisons, better – read secure – payment options as well as incorporating peer reviews will play a vital role in luring traffic and generating massive consumer footprint. It will be interesting to see how web stores, ecommerce websites and e-businesses at large encourage and influence customers/consumers to shop online.

 

 

 

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