MENA Mar­keters and Shop­pers Em­brace E-com­merce

ArabAd - - COVER STORY -

E-com­merce is wit­ness­ing a ma­jor growth spurt in the MENA re­gion as con­sumers in­creas­ingly shift from the show­room to the we­b­room.

The rev­enue of e-com­merce in the Mid­dle East was es­ti­mated at $39 bil­lion in 2015 and is ex­pected to sur­pass $45 bil­lion by the end of this year. Pay­fort’s State of Pay­ments Re­port 2015, an an­nual re­port on the world of pay­ments, e-com­merce and in­no­va­tion in the Arab World, even pre­dicted that by 2020 the fast-grow­ing sec­tor will be “nip­ping on the heels of air­lines” to be­come the big­gest.

Ac­cord­ing to 'The Paypal In­sights: E-com­merce in the Mid­dle East 2013' re­port con­ducted in con­junc­tion with Ip­sos, such rapid growth is due to two main fac­tors: the mas­sive jump in the on­line com­merce pop­u­la­tion and the flood of lo­cal re­tail­ers com­ing on­line to fill the needs of th­ese newly found cus­tomers.

And with Think with Google cit­ing mo­bile among the top 3 2016 pri­or­i­ties for MENA mar­ket­ing lead­ers, the evo­lu­tion of we­b­room­ing is set to en­tirely trans­form the way con­sumers in­ter­act with brands. May 2016

For in­stance, Bri­tish multi­na­tional bank­ing com­pany Stan­dard Char­tered has re­cently made a $50 mil­lion in­vest­ment in Souq.com, the re­gion’s lead­ing on­line re­tailer. “We did this, be­cause we felt com­fort­able that our re­gion is in the early stages of real dis­rup­tive change when it comes to con­sumer be­hav­iour, re­tail shop­ping and mo­bile tech­nol­ogy,” the com­pany’s web­site read.

Go­ing back to the Pay­fort re­port, Face­book re­mains the num­ber one chan­nel for e-com­merce plat­forms (41%), fol­lowed by Instagram (21%), Twit­ter (13%) and Pin­ter­est (9%). Face­book right­fully tops the list as 65 per­cent of the to­tal num­ber of con­sumers who have bought some­thing on­line are ac­tively present on the so­cial net­work, but the re­port ex­pects that Instagram “may well take pole po­si­tion” in 2016.

How­ever, SEO is still of equal im­por­tance to so­cial me­dia in terms of boost­ing e-com­merce sales with 16% per­cent each, fol­lowed closely by email mar­ket­ing (13%) and re­fer­rals (12%) among other mar­ket­ing chan­nels.

Back in 2013, the Paypal in­sights re­port cited travel, con­sumer elec­tron­ics, com­put­ers and jew­elry/watches as the top on­line spend­ing cat­e­gories re­spec­tively. Air­line tick­ets and ho­tel reser­va­tions/tours still oc­cupy the first spot to­day, while event tick­ets have quickly over­taken elec­tron­ics as the se­cond top prod­uct MENA con­sumers buy on­line.

But even when the Mid­dle East seems to have en­tered a new era of on­line com­merce with in­creased smart­phone pen­e­tra­tion and en­hanced in­fra­struc­ture, e-com­merce com­pa­nies still face a num­ber of chal­lenges in­clud­ing cash on de­liv­ery (COD) which costs can prove dam­ag­ing to small com­pa­nies.

This be­ing said, there is no doubt that the on­line com­merce mar­ket is thriving on a mul­ti­tude of fronts in the re­gion, no­tably in gulf coun­tries like Kuwait, KSA and UAE along with Egypt and Le­banon, a move that is almost rad­i­cally shift­ing the fo­cus of MENA mar­keters to­wards prioritising their mo­bile cus­tomers in or­der to ac­quire new buy­ers and drive con­crete re­sults.

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