2pure , Business __ Monday, March 4, 2013 10:21 AM - Rudolf Jabre

Rudolf Jabre: E- Commerce in the Middle East


Tackling the topic of e-commerce in our region raises an obvious question; when was the last time you bought something online from the Middle East? For many of us who are at ease with shopping online in general – and have also experience e-commerce in this region – the answers will range from rarely toirregularly.

For many others the answer is never, or even more expected that there’s not really that much products to buy online from/in the Middle East…

However E- Commerce is invading the MENA countries, but each has a different methodology to face the challenges and grab the opportunities. Dubai, which has long seen itself as the region's commercial hub, has already opened the Dubai Internet City and the Dubai Media City.
Early in 2005, Souq.com was a new Web site modeled after eBay in the United States, catering to the promising online transaction market in the Middle East. In the last week of October 2012, the fast-growing site received $45 million in funding from international investors, creating a new standard for the region’s developing e-commerce scene.

Namshi.com, a copycat of Zappos.com, which sells shoes online, has shown strong growth in its first year of operation. The site grew from three to 100 employees since it began in October 2011, and now manages 600 orders a day, according to Namshi’s founders and it also received $20 million in funding from J.P. Morgan and Blakeney Management in September to further grow the business according to the New York times
And when Dan Stuart ran some research he found out that:

  •  “80% of respondents have a credit card
  • 70% of respondents use their credit card for online purchases
  • 40% of respondents buy online once per month or more
  • 56% of respondents are somewhat to very comfortable buying online from Europe, 59% from North America, but with the largest group of respondents from the GCC and Levant saying that buying from this region just hasn’t even been an option
  • 49% of respondents site the chief reason for hesitation or lack of online shopping from this region is the lack of options
  • and when asked what would increase their confidence in buying online from the region 55% said trust that the site would run error-free, 53% said clear signs of audit and verification, and 50% said clear transparent customer care”

When starting an e-commerce site today grounded in the MENA region you’ll discover that the main issue is not your determination, building a site, incorporating, or the consumer. The main challenge is the struggle to secure an inexpensive payment access.

Shipping merchandises ordered on the Web across the Gulf countries was not easy because currencies and legal structures diverse from place to place. Regularly, there was the additional requirement of opening new bank accounts or finding a local partner to share the business.
Many clients favored to pay with cash on delivery rather than entering credit card details online. Cash on delivery put a strain on the company’s resources as it had to ship goods first and collect, or not, the money later.
So why you should start selling online?

On one hand the anticipated growth in the Middle East of online retail will pass from 1, 1 billion us dollars in 2011 to nearly 2 billion dollars in 2016 according to wamda.com

On another hand the number of internet users in the Arab world who has purchased online grew by more than 100% at the end of 2012 as online payments are now becoming more widely accepted and some of the shipping issues have been resolved
to start selling online, you have to identify the an opportunity and a business model, than create your e-store with Aramex or REDe ,,, but the most important is to concentrate on your consumers, your core, identify their needs and build a trustful relationship that will allow you to gain their loyalty and keep them coming back.

In order for e-commerce to prosper, both trades and individuals must be self-assured that their transactions are safe and that data will not be misused.

However, specific e-commerce laws would support trade in the Middle East because they would eradicate uncertainty and thereby stimulate a feeling of confidence in e-commerce, without which it may not flourish.

As imperative as the existence of the marketplace and the proper legislations, it’s the technology that makes it possible. To exploit the technology totally, business records, prices and other relevant information must be available online for customers.

comments powered by Disqus