With its high-end shopping malls, hotels, and retailers you’d be forgiven for thinking that the Middle East is going to be a tougher than usual market to crack, but when it comes to ecommerce, you could be surprised.
Reporting on findings by Gartner, Deloitte found that in 2018, only 15 percent of businesses in the Middle East have an online presence, and almost 90 percent of the online purchases in the region are shipped from abroad.
However, with the arrival of Noon.com, a large regional e-commerce player, the entry of major international players, such as Amazon (through the acquisition of Souq.com), and by increasing technology adoption, the number of people in the region shopping online has grown and you could be just the business this lucrative audience is looking for.
As founder of noon, Mohamed Alabbar, said, “today you’re digital, or you die” and as an ecommerce retailer you probably don’t need convincing of that.
His comments though show that even traditional markets are adapting to modern times, so what do you need to do to crack the Middle Eastern market?
Choose your entry point carefully
As you will have done before embarking on any new market, do your research as to the best place to start.
When it comes to targeting the increasing number of shoppers in the Middle East and North Africa (MENA) region, the best place to start is often the United Arab Emirates (UAE).
As Sara Dwela writes for Hall & Partners, with its cosmopolitan population, of which over 80% are actively online, the UAE has one of the highest global internet penetration levels per capita.
Government initiatives to encourage a more digital lifestyle are also getting more and more people online and ready to make digital purchases.
The country currently holds 53% of total market share across the region, followed by 14% in Saudi Arabia, 12% in Oman, and 10% in Qatar.
It won’t be ‘one size fits all’
While the UAE serves as a good starting point to test the market, don’t be fooled into thinking every other country in the Middle East will respond the same way.
Just like in Europe, and possibly more so, every country has its own nuances in language, culture, preference, etc, yet the entire region is often still to be viewed under a single lens.
Retail in Saudi Arabia, for example, rates highest in the region, yet reliance on cash on delivery (COD), along with other factors, has slowed its growth in the online space.
Low credit card usage in Saudi Arabia, combined with general distrust of online ecosystems, has also allowed for 70% of e-commerce transactions to be COD, so bear this in mind with your mail fulfilment.
On the other hand, UAE shopping habits are drastically different. Female residents shop both online and in-store but prefer online.
With a high disposable income and comfortable use of credit cards, women in the UAE are spending more on fashion than before, with about a third doing so on a weekly basis.
The Middle East’s largest e-commerce site Souq, claims that 60% of all their transactions are through credit card.
The time is now
Amazon has already recognised the opportunities the Middle East offers. In late 2016 they began to consider bidding for Souq and eventually bought the for as much as USD650 million.
However, they aren’t alone in looking to the Middle East for business growth. While Bloomberg Technology called Amazon’s deal one of their largest acquisitions, rivals noon carried as many as 20 million products, 10 times more than Souq, as far back as 2017.
Just because there are two big players in the region doesn’t mean there isn’t room for you.
These big and trusted brands have boosted trust in e-commerce in the region overall and helped consumers get used to digital purchases and mail fulfilment.
The region is on the brink of becoming a major contributor to the worldwide e-commerce market, and both global and regional players have started to recognise this.
The Middle East may seem like a world away, but with the right partners you can make the most of what is becoming an exciting and lucrative market.
Asendia, for example, has local partners in the region that know how people across the Middle East shop and like to receive their orders in countries including:
- Israel
- Bahrain
- Saudi Arabia
- Turkey
- Qatar
- Morocco
- Egypt
- UAE
- Oman
- Kuwait
- Jordan
Asendia can help you enter the market with relative ease, and at a cost that helps increase your margin. To find out more, drop us a line.
