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Hind Al Soulia - Riyadh - By Mauro Romano
It comes as no surprise that the e-commerce sector has been performing seemingly well, since the outbreak of COVID-19 forced retail centers to shut down, significantly increasing sales across various digital platforms. Being one of the fastest growing business in the region, e-commerce has witnessed a rapid growth in the last five years, especially considering the region is known to be one of the leading shopping destinations in the world.
The coronavirus pandemic also created an increase in online sales demand in the MENA beginning from March this year, recording approximately 300 percent increase in sales.
According to a report published by Visa, the market size of e-commerce in the Middle East is set at $48.6bn in 2022 compared to $26.9bn that was set in 2018. The report further states that in 2019, UAE’s e-commerce sales were projected to hit a $16bn, followed by KSA, with e-commerce sales expected to round up at $7.7bn.
In another report published by Statista.com, in 2019 alone UAE had recorded 93.9 percent of Internet penetration, the highest globally. In 2022, the forecasted value of e-commerce sales in the UAE will amount to $27bn, whereas e-commerce sales across the region are estimated to grow by an average of 23 percent per year between 2018 and 2022, as stated in another report by Statista.com.
On analysis of online shopping behavior, it has been observed that approximately 60 percent of women make fashion related purchases online. The average spending on high-end fashion brands in the UAE is approximately AED800 per order, whereas the average spending on beauty related products has been recorded at AED400 per order.
I believe the e-commerce industry is here to stay and is going to drive the future of retail sales, especially once we overcome the present situation. Currently in UAE ecommerce represents roughly 30 percent of the overall retail sales.
However, over the next few years with increasing attention on labor cost, warehouse cost, renting and inventory turnover, UAE e-commerce will increase its market share to 70 percent of the overall retail sales, a report by Visa states.
In the next few years, perhaps we can witness education, government services, professional services, telecom, insurance and real estate industries venture into this platform to further strengthen their business and expand audience reach.
ArabClicks, an affiliate marketing network for countries in the MENA, has been providing game changing solutions for the e-commerce marketing industry in the Arab world, by understanding consumers’ shopping behaviour and providing solutions to address them.
During this year, although we saw that the main drivers of e-commerce in the MENA were purchases made across various platforms, several new industries saw this as opportunity to introduce their products, services and strengthen their customer reach. Platforms offering great deals are among those.
— The writer is CEO of ArabClicks, affiliate marketing network and e-commerce solution provider
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