- 09 December 2015
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As in other regions in the developing world, e-commerce is on the up in the Middle East. Local and international marketers still need to provide much-needed expertise and accommodate the consumer culture.
According to the recent State of Payments, report by Payfort, Saudi Arabia and the United Arab Emirates alone will have a combined e-commerce market of more than US$10 billion by 2020. Although still lagging far behind mature markets like Europe, the Middle East is beginning to catch up.
The biggest slice of this region’s e-commerce sector is entertainment and electronics. There is still plenty of room for expansion though, especially in almost untouched areas like groceries.
In fact, the growth of e-commerce across the Middle East is so rapid that both established and new businesses that are a little behind the curve are now being obstructed by their traditional retail models.
So – although marketers looking to reach people in the region could do much worse than driving people to e-commerce sites such as Souq or Aido – there are still issues that are holding back e-commerce companies in the area.
Payfort found that a lack of omnichannel strategy is the most obvious difficulty faced by businesses across the region. This is partly the result of a skills shortage; for example, many businesses have poor acceptance ratios because they have yet to develop adequate checkout pages on their websites.
But solving the problem isn’t simply about bringing in experts from abroad or more training and education. There is an issue around the local culture, which remains tied to ‘cash on delivery’ options – many people refuse to pay online for physical goods. For almost half of the companies surveyed, less than 25% of their customers were paying by credit card or mobile.
One of the primary reasons for this is lack of trust. The business that can communicate best with customers, helping to allay their concerns, will be in a good position to win significant market share – the current goal of most e-commerce companies in the region.Back to all
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