“If your business is not on the internet, then your business will be out of business.” – Bill Gates
A virtual platform evolved, which aided the users to procure and vend goods and services on the internet with ease. Ecommerce has been revolutionizing the world by rendering dexterity and effortless shopping to the users. Be it booking of tickets to buying utilities, everything is now just a click away post the advent of ecommerce. During the initial times, people were apprehensive and intimidated about the quality of the product they would be receiving and the credibility of the platform these sites had to offer. But with the increase in smartphone penetration and the internet revolution, innumerable companies have entered the business encouraging internet users to use their ecommerce platform and in building the trust factor for users to come forward to shop online.
The trust factor was inculcated by bringing in easy and safe payment methods, speedy delivery of product and quality products delivered at amazingly low prices in the market. The wrong notion that was predominant has now faded away with time. Today there are more internet users who have turned into confident online shoppers. With the growing trend in ecommerce, several businesses are expanding their businesses by investing in the digital market.
Ecommerce & The Middle East
The population in the Middle East & North Africa (MENA) region is about 350 million and there are about 110 million internet users among them. Out of these 110 million internet users, 30 million are shopping online. Middle Eastern countries have always been in the forefront when it comes to adopting new technologies. This has been the same when it comes to embracing ecommerce too. Starting from the leading home grown online retailers such as Souq, Cubone, Wadi etc. to global titans like Amazon, eBay and Ali Express, there have been several ecommerce firms which had triggered enormous growth in the sector. These titans have generated more revenue to the ecommerce development firms.
This is the reason that many local and global companies have attracted attention from investors. Middle East ecommerce site Wadi.com has raised UD 67 million in funding 10 months after its launch in 2015. Souq which is Middle East’s own home-grown ecommerce platform has scaled up so high that it has obtained USD 75 million as investment from Naspers and USD 150 million from Tiger Global Management recently. The company has raised a funding of USD 275 million to date and plans to utilize the funds to boost its technology and mobile services.
Souq, considered the Amazon of Middle East, boasts the value of more than one billion AED (USD 275 million). It has around 23 million visitors visiting it monthly and it has sold over 8.4 million products. This attracted Amazon to acquire it for USD 650 million dollars. The luxury ecommerce brand ounass.com which is compatible in both Arabic and English is another example. It sells a wide variety of products ranging from cosmetics to footwear.
To promote business, it has come up with two hours to same day delivery, cash on delivery, free shipping and easy returns or exchanges. Noon.com is another luxury online regional marketplace which has been launched recently. It has about 20 million products in its kitty. Created by businessman and billionaire Mohamed Alabbar, the new platform will sell a variety of products and benefit from same day delivery operated by Noon Transportation.
With the rise in acceptance of ecommerce by users in Middle East, the ecommerce development companies have grown progressively. The revenue raised by these ecommerce sites is expected to be valued at USD 10 billion (AED 36.7 billion) by 2018 in UAE, according to Sarwant Singh, Senior partner and head of visionary innovation group at Frost & Sullivan. It is guaranteed that these numbers are going to increase with time steadily.
MasterCard and PayPal conducted surveys on the shopping behavior of Middle East users and the survey shows that 80 percent of the purchases done online in the Middle East are made with cash-on-delivery. Credit and debit cards make up 15 percent and PayPal the remainder. The online surveys also say that the top category in which many users have used the ecommerce sites is for travel, after which comes electronics.
PwC released an annual survey of global shopping habits, interviewing 23,000 online shoppers across five continents in 25 countries in March 2016, including over 1,000 consumers in the Middle East. There were few notable points:
– The percentage of online shoppers has doubled over the time from 6 percent to 12 percent.
– Coupons, loyalty points, discounts and reward points are put to weightage by customers.
– Social media plays a key role in building the brand value through word of mouth.
– Customers prefer cash on delivery than online payment due to the diffidence over security in online transactions.
The e-government initiative that has offered plenty of services to public through online has also played a key role in the acceptance and growth in the number of users who started using the online methods to find solutions through ecommerce. Several online platforms were developed for the citizens to avail the public services easily and rapidly. Not only by moving services online, the UAE government had set up the world’s first purpose-built duty free e-commerce hub named ‘Matajircom’.
With its founding partners, Aramex, Cupola, CWT-SML Logistics, du, Dubai Trade, ENBD, MasterCard, Mohebi Logistics, Shop Go, UPS, Economic Zones World (EZW) and Dubai Customs, the government works closely with regional and international companies to encourage the growth of e-commerce in middle east, aiming to bring local, national and international markets closer together with the aim of making Dubai as the crucial key for years to come.
According to the market research company, eMarketer, as of now, the Middle East ecommerce market is valued at USD 4.9 billion and is expected to expand to USD 10 billion by 2018. This value is going to triple is what the experts say to the state of e-commerce here in middle east. The associate director for digital transformation practice at Frost & Sullivan, said: “The global retail market is expected to be at USD 23tn in 2025 and growing at a compound annual growth rate (CAGR) of 4 percent. Going on, the ecommerce market will account for 18% to 19% of the market in 2025. The e-commerce market in the region is very nascent; there are 10 times more opportunities to be captured in the next year or so as compared to the global markets.”
The state of ecommerce development companies in the Middle East is growing and receiving a notable return on investment (ROI). Middle East is becoming the hub for investments in businesses when it comes to ecommerce sector and this growth is going to triple in the upcoming years. With consumers becoming more aware about the scope of ecommerce the growth is undeterred. The market opportunities here are still untapped considerably, which when tapped to its fullest potential, is going to reap a lot of profits in the years to come.
To experience swift growth in the online business world, it is imperative to understand the importance of ecommerce web design and development, and have online store. Companies such as eDesk HUB offers research and authentic reviews of top ecommerce developers. Online store entrepreneurs must look for only top ecommerce developers to have a well-crafted site for their business, and to unlock the true potential of ecommerce.