Is it time to sell online?

Local eCommerce on the rise


A new report shows that UAE customers now prefer local ecommerce sites to the big global names, with one local site outperforming Amazon – supposedly the pinnacle of online retail – 3 to 1 in this region. Is regional ecommerce on the up, and how can you take advantage?

It’s fair to say that ecommerce has never quite swept the UAE the way it has other parts of the world. Yes, people do shop online here, but with such an immense physical retail offering on our doorstep, there has been a lower uptake. In addition, the other key advantages of online retail – such as significantly lower cost or wider availability – are also less of a draw here.

However there are signs that may be changing. Several key factors are at play. Firstly, the emergence of strong online brands here: brands that come from this region, and who are aimed at this region. They have finally captured the public’s imagination, in the way that Amazon and others did in Europe, America and elsewhere. Secondly, the improvement of delivery logistics and customer service – previously a stumbling block that had held online retail back. These are both areas that SMEs now have it within their power to take advantage of: elsewhere in this issue of SMEXchange, we look at the latter topic in more depth. Third come additional factors, such as the fact consumers are now more confident about the speed, convenience and security of paying online.

It’s worth analyzing the trend more closely. For this, a survey carried out earlier this year is particularly illuminating. According to MasterCard’s Online Shopping Behaviour Study 2015:

  1. 42 per cent of residents in the Middle East have access to internet shopping.
  2. The top categories for online spending include airlines, travel and hotels, home appliances and clothing.
  3. 85 per cent of respondents access the internet on their mobile.
  4. 46 per cent shop via mobile because it’s convenient.

Most intriguingly, more than half of the people surveyed said they prefer to shop from local websites rather than foreign ones.
Of these, the clear leader is souq.com. It is our region’s most visited website for online shopping, the report confirms. More than 45 per cent of respondents purchased through it in the past three months, well ahead of second-placed Amazon.com (16 per cent in the same period).
Other illuminating insights include the fact 87 percent of local online shoppers are satisfied with their experience.

What this says for an SME, especially any that have been uncertain to date about how much emphasis to put into online retail, is that there are clear signs the tide is turning. Building a strong local brand, as souq.com has, clearly has potential. Similarly, making your offering mobile friendly and – as we explore elsewhere – exemplary in its delivery service, will then support that. Finally, taking into account the leading sectors will help those thinking of launching a new brand. For example, although there are regional players in the travel market, none have reached the status of market leader. Could you?

 

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“The opinions expressed within this article are generic. Mashreq is not responsible for the accuracy, completeness, suitability or validity of any information on this article. The information, facts or opinions appearing in this article do not reflect the views of Mashreq. Mashreq does not assume any responsibility or liability for the same.”

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