This year has been a great year for e-commerce. It has been a year of acquisitions and launches. One of the biggest thing that happened in e-commerce this year is the launch of Noon.com by Emaar Properties chairman Mohammed Alabbar on the October 1.
What is Noon.com? Noon is the Middle East’s homegrown competitor against e-commerce giant Amazon. Noon also took over Souq.com, who is one of the biggest e-commerce platforms in the region beginning of 2017.
In light of this prolific growth, Communicate has spoken with agencies who are working with current e-commerce players to figure out their role in this new wold order.
Then and Now
The media director of Starcom, Anna Woloszczenko said “e-commerce in MENA owes its growth to four flagship regional markets, the UAE, Saudi Arabia, Kuwait and Egypt for varying reasons across markets, ranging from sheer population size and potential, to broadband infrastructure, to record digital penetration levels.”
According to a study that has been done by the Global WenIndex (GWI), the region is still very much behind compared to the global benchmarks. Studies has also shown that, 75% of people purchased at least a product online in the previous month globally. While this number was only 56% in KSA and 66% in the UAE.
The strategic planner director of MEC, Marie Abiad, said that while she was working on a travel brief, “we noticed that, surprisingly, in the region, people don’t spend as much time to book flights and hotels as they do in other parts of the world.”
I normally takes consumers around 30 to 40 days from searching before making a booking. On the other hand in the region, it takes to 20 days.
But according to Stanislas Brunais who is the senior director at OMD says that the lead time and conversion is longer. It can take up to 30 days sometimes. However, booking that are made in the GCC tend to be quicker and done in a maximum of three to four days.
Brunais also added, “consideration happens a lot on mobile and conversion is more skewed toward desktop, either because the mobile experience is bad or because people are more inclined to share their personal details on desktop.”
Because mobile devices play a huge role in many peoples lives today it is also part of the customer journey, especially when it comes to the consideration phase. It is extremely important that e-commerce players track their audiences across their devices.
Of course there is always the issue of trust. According to a report by PwC, 62% of the Middle East e-commerce consumers are worried about being hacked on their mobile devices and risk personal information being stolen.
When it comes to regional e-commerce companies, Souq and Noon are two of the biggest players and it is not fair to leave out the travel industry and service providers. If a timeline was created and put together, travel will be the first, followed by fashion, then transport, then local and international brands such as Sephora or Chalhoub, said Brunais.
According to local media reports, football has been reducing in the UAE this is because the Middle East (UAE and KSA) in particular are strongly driven by the mall culture. Hmmm.. so does this mean that it would make sense that retailers incest in an e-commerce platform?
This is an industry in which clients need a lot of education on, Rodriguez said. Businesses who have a good understanding of the importance of an online store and are ready to take the step might have another question in their mind: should we invest and build our own platform or be a part of a market place?
According to Brunais the answer is clear. He says that brands need to be present everywhere because users are where the data lies. “And the only way to do it is to have your own website but, if you rely only on marketplaces to sell your product, you will never get that data,” he says.
Brands today should know how to position their selves whether it be through meta tags and descriptions or content based tab takeovers and offers. Pure advertising on just your e-commerce sites are however quite restricted to direct buys and traditional formats. Rodriguez thinks that this is due to the e-commerce sites wanting control of who gets to advertise on their site and also being able to charge them at a high price.
What Lies Ahead
Obviously there are great opportunities for both local and regional players to up their online game. A report by KMPG for 2017 shows that, an astounding 58% of online purchases in the UAE were imported. This just goes to show that the UAE customers are willing to shop online. They just prefer to shop from global e-commerce stores.
Also, e-commerce is receiving major help form a governmental level as well. The Arab Federation of e-commerce was created with a goal of helping the industry grow from $20 billion in 2017 to 200$ billion beyond 2020.