E-commerce to M-commerce: The evolution of Online Economy in the Middle East

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The face of Middle Easternonline retail is changing drastically, experiencing a sustained growth in online market investments, led by the $580 million acquisition of Souq.com, UAE’s largest multi-commerce website, by Amazon. With one of the highest global per capita internet penetration levels and a steadily growing youth marketing sector, the region is poised for an e-commerce boom.

In the UAE, the top market in the region, B2C E-Commerce sales doubled between 2015 and 2017, with a projection of further growth at annual rates of above +20% through 2021.

The main growth drivers include high rates of Internet connectivity among population, reaching above 90% in countries such as Bahrain, Qatar and the UAE.

However, the most interesting trend observable is the growth and dominance of “M-commerce” over E-commerce.

The MENA region accounts for 10% of the global mobile app traffic and revenue generation. Furthermore, as per the FPMG 2016 report, 95% of the people in the region owned a smartphone (an increase from 74% in the last 2 years).

The reasons of eCommerce Mobile Apps boost are multiple and constitute an important spectrum of research and interest, both for the consumers as well as the service providers:

1. Shop-on-the-go: Forgot to buy a gift and no shop nearby? Stuck in a traffic jam and not enough time to shop from a retailer? Multiple different gifts for multiple people, but only a day for all that? The apps have you covered, by putting away all the time consuming demographics, and providing you everything at your mobile screen.

2. Optimization: Mobile apps allow the user to customize the app with the an ever increasing flexibility, ranging from adjusting app display color, to filtering a user’s search according to their geographical location, past purchases and wish lists. The result? Increased usage rates of apps over websites, and better conversion rates.

3. The most effective window shopping: The immersive experience of having access to a wide variety of products, ranging from electronics to clothes, with the additional option of being able to compare the prices of products, along with access to customer reviews and rating, allows users to be surer and more interested in buying a product. This in turn, also ensures customer satisfaction, with more than 80% reporting satisfaction from their online shopping experience.

4. Attractive pricing: 4 out of 10 online shoppers search for discount coupons before initiating a purchase. The competitive pricing also leaves the customer with an exquisite range of prices and discounts, and the option of choosing the most comfortable one, without the hassle of saying no to a dedicated salesman, or the tiring journey from the first shop to the tenth.

5. Shop-on-the-go: Forgot to buy a gift and no shop nearby? Stuck in a traffic jam and not enough time to shop from a retailer? Multiple different gifts for multiple people, but only a day for all that? The apps have you covered, by putting away all the time consuming demographics, and providing you everything at your mobile screen.

6. Offline availability: Probably the more important differences between websites and mobile apps. The availability of certain features that can be used even offline, offers a never before seen level of preference towards mobile apps.

7. Less thinking, more buying: Ever caught yourself browsing through an apps list of products, without the preceding thought of buying one, because the app showed a notification about this great summer collection, or an impeccable range of gift boxes, just appropriate to gift on Mother’s day? The feature of push notifications, reminders, and special offers keep the audience hooked to the app experience.

Online food services

But is it just the shopping that makes up the entire e-commerce? Interestingly, merchandise shopping is receiving stiff competition from online food services, taxis, hotels, flight tickets, games, and even property and car purchasing, dethroning it as the most common aspect of e-commerce. And the most rapidly rising are the food services.

According to forecasts, the food delivery app market will be worth about 13.2 billion U.S. dollars in the UAE in 2018. KPMG’s annual food and beverage report 2016 found three in every four people in the UAE order a take away or have food delivered at least once a week, using mobile apps. Apps like Roundmenu.com, GuidePal.com, EatEasily.com and MakeMyFood.com have become worth millions of dollars within a few years owing to the popularity and ease of food service apps.

New trends

Subscription e-commerce

Offering a monthly delivery of product/services based on as subscription rather than a one-time purchase, is an upcoming concept in e-commerce. Success stories like Dollar Shave Club show that such series hold great potential among MENA countries too.

Social media influence

72% people in UAE believe that social media has an influence on buying decision, 10% higher than the global average, thereby showing how social media platforms like Facebook and Twitter can have a huge positive impact on online buying and selling.

The start-up scenario

Several startups in recent years have entered the e-commerce and mCommerce scene, with mobile apps allowing users to multitask efficiently with minimal effort and also save valuable time.

1. Bridg: A mobile payment platform that facilitates payment through Bluetooth technology, which has become a viable alternative for conventional banking in Dubai.

2. Morni: It is an interactive platform offering on-road assistance in Saudi Arabia. The app is totally free to use and useful to get timely help to get the problem fixed while travelling.

3. HelloFood: The online mobile app allows you to order food from different restaurants including Burger King, KFC, Taco Hut, Quiznos, Canton, Amo Hamza, and Hardees, and is available in multiple cities of Saudi Arabia.

To conclude, just a simple quote by Tolman Geffs sums up the impact of e-commerce trend and why every industry today should invest create an eCommerce mobile app.

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