The COVID-19 epidemic altered global habits and lifestyles, and the MENA retail industry was no exception. It created an urgent need for businesses to use digital technology in order to adapt to changing customer inclinations toward online purchasing. As a result, more than half of customers intend to increase their online buying frequency. The retail business is predicted to develop further, owing primarily to a technological disruption in which data analytics, artificial intelligence, machine learning, and shifting customer behavior will transform the retail industry landscape.
Before the COVID-19 epidemic, the Gulf Cooperation Council (GCC) region’s e-retail business was predicted to have a 12.2 percent penetration rate of offline retail in 2025. Following the epidemic, the predicted penetration rate increased to around 16.3 percent. (Statista)
Over the last few years, the region’s e-commerce business has grown quickly. In the United Arab Emirates, the value of e-commerce transactions is expected to reach over 27 billion US dollars by 2022. (UAE). According to the UNCTAD E-commerce Index, the UAE leads the Middle East and North Africa (MENA) area, followed by Saudi Arabia. Airlines and hotels were the most popular e-commerce segment in the UAE in 2020, while fashion remained the most popular in Saudi Arabia.
The value of e-commerce sales in the region increased following the governments’ mandated lockdowns and social distancing regulations to prevent the spread of the COVID-19 virus. In a similar vein, the predicted market size in Saudi Arabia by 2025 is expected to reach 21 billion US dollars. According to a 2020 poll carried out in the UAE, over 30% of respondents increased their internet buying frequency during the epidemic. Governments responded to e-commerce trends by making it easier to get e-commerce licenses. This was done to encourage new enterprises to invest in logistics and other sectors that may help the e-commerce industry.
Consumer behavior in the Middle East and North Africa has been shifting continually as it spans two continents and has a young, ever-growing population. Digital adoption, creative company concepts, and quick market entrants are changing the way people purchase. The COVID-19 pandemic has upset established patterns of life, causing considerable shifts in purchasing habits.
Selling in Saudi Arabia is an excellent target for international and local e-retailers. There are a variety of essential statistics and data to consider before launching your shop in a new area. In Saudi Arabia, there are 20,813,695 Internet users, and Internet penetration is 64.7 percent. In terms of device utilization, there are 21,337,000 smartphone users, with 65.20 percent smartphone penetration. Smartphones are increasingly being utilized for digital transactions on a worldwide basis. Clothing, flight tickets, mobile phones, utilities, and watches are all among the most popular items in Saudi Arabia
UAE consumers buy from cross-border shops to have access to a larger selection of items or to get higher quality products that are not available locally. The UAE also boasts low delivery charges for customers who want to buy from outside the area. The major countries from which UAE customers buy include the United States, India, and China, and are frequently connected to accessories and footwear, as well as beauty and self-care products. The Emirati tendency to shop internationally is rapidly increasing, growing from 23% of total e-commerce sales in 2019 to 26% in 2021 and predicted to reach 32% in 2025 as stated by Wam News Agency in their report. The number of users in the e-commerce sector is estimated to reach 6.8 million by 2025 while the user penetration rate is expected to reach 69.5 % by the end of 2022.
The UAE has been aiming to expand internet penetration and use, e-payment platforms, and logistic infrastructure, all of which have led to greater public trust in e-commerce platforms. In addition to ordinary shopping, the market is varied in that it includes government services and education fees. Airlines and hotels were the main e-commerce segments in the UAE in 2020. The government is constantly pushing the electronic economy in order to establish the nation as a regional hub for the expansion of online enterprises. Internet buyers in the UAE made 58 percent of their online purchases from foreign suppliers due to trust in gateway security and trustworthy and free delivery procedures. Product and brand reviews on social media influence e-commerce behavior. E-commerce players may utilize social media to increase sales in the same way that other international marketplaces can.
Retailers have understood that language and localization are critical things to consider when stepping into international markets. Luxury labels such as Burberry, Dolce & Gabbana, and jewelry store the Blue Nile have developed Arabic language sites targeting customers in the UAE, as well as advertising in Arabic. These activities will attract more local clients who have previously shunned e-commerce due to linguistic hurdles.
Shein expanded into the Middle East in 2016, and sales immediately surpassed 200 million yuan. It is currently listed among the top 10 shopping apps in the Middle East’s most important markets: the United Arab Emirates and Saudi Arabia. In fact, Shein debuted its fall/winter menswear collection in the Middle East in November 2021, offering casual wardrobe necessities for men at reasonable rates in line with the company’s goal that everyone should be able to enjoy fashion. In order to establish control of a new market, Shein Middle East offers the same shopping experience that they do in the United States, including the opportunity to purchase with local currency, regular discount codes, and quick shipment.
Another story that has strengthened E-commerce between Morocco and China is Chicpoint’s entry into the Moroccan market. As a China-based eCommerce platform that offers a variety of clothing products for children and women, Chicpoint is the first marketplace that partnered with Fulfillment Bridge to unlock the potential of payment on delivery in Morocco. As of today, Moroccan consumers have the opportunity to order from Chicpoint, get their parcels delivered within 7 to 10 days, and pay upon delivery using their cards. Boosted by Fulfillment Bridge’s direct line from China/Hong Kong to Morocco, this service has made a lot of noise among e-commerce enthusiasts in both countries.
Targeting the Middle East has become a hot topic nowadays in the industry as numbers show that it is an e-commerce goldmine. Amidst ongoing governmental, social, and economic changes, e-sellers are more than never inclined towards leaning over fulfillment providers to seek advice, grow, and go beyond their limits. Choosing your 3PL partner might look like choosing your lifetime partner, or more. Eventually, you will need a partner with whom you can see the full picture, project into the future, and reach new horizons together hand-in-hand. Having this at the back of its mind, Fulfillment Bridge puts at the disposal of its partners teams of international and local market gurus, logistics experts, and marketing professionals. Being originally rooted in China and Hong Kong and having acquired the right set of competencies, Fulfillment Bridge has reached the point where building a bridge between China/Hong Kong and the Middle East makes no secret. By relying on the right 3PL partner, Chinese merchants have the opportunity to access the market in a hassle-free and budget-friendly way.