E-commerce in the Middle East has currently one of the fastest growth rate in the world. Arab Advisors in Jordan have published that there is a significant increase in the number of people purchasing items online and in the amount of money spent. E-commerce in the MEA is still a very niche market but it’s growing exponentially (According to Euromonitor: current customers spending c. $1.1 bn online.
By 2016, it will double to $2.2 billion). UAE and KSA are experiencing the strongest growth. This is due in part to the locals in these areas becoming more comfortable with using credit cards online. However, internet shopping is on the rise in other parts of the region as well.
But, penetration of e-commerce users in the middle east is still very low and is around 10%. The most important reasons of such a low penetration in the past were:
- Internet users didn’t trust online retail
- High cost for small retailers
- Low and weak e-government support
- Low internet penetration
- Low credit card penetration
Some of the factors that are participating in the current growth is the significant increase in the internet penetration and the change in the people mindset toward the online retail.
Another reason, is the adoption of regional adapted solutions such as prepaid payment options which is rassuring the customers against fraud risks and solves the low banking and credit card penetration rates (compared to Europe and USA).
Researchers have noticed that it is not only the wealthy parts of the region that are seeing a rise in shopping through the web. In the last two years, sales in Egypt have surged more than 150%. In Iran they’ve climbed more than 80% fueled by a rise in PC ownership and social network usage.
How long will it be able to keep its high growth? The region is in a complete transformation technologically, economically and politically. Delivery infrastructures and real time cloud solutions are not as developped as in Europe, will the middle eastern be able to find solutions that are efficient and adapted to the region?