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Ecommerce driving Middle Eastern economy

Ecommerce is emerging as the major driver of the Middle East’s digital economy, according to a new report.

The State of Payments Report 2016 from the online payments gateway Payfort is set to be officially released at the Ecommerce Middle East Show in Dubai at the end of May, but some of its key findings have been released in advance.

Whilst ecommerce remains the fastest-growing sector of the digital economy in the seven countries surveyed (Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia and the UAE), the travel and entertainment industries were also experiencing rapid growth.

The existence of a cash on delivery option is an attractive feature for Middle Eastern online shoppers, perhaps not surprising in a region where many people do not have bank accounts. 51 per cent of those surveyed across the region said that the existence of such an option influenced their decision to buy, with the figure rising to a whopping 91 per cent in Egypt.

Attitudes to online security were somewhat contradictory. 80 per cent of respondents said that they were confident that their personal and payment information was safe. Conversely, though, 71 per cent said that they had refused to make an online purchase due to privacy concerns.

Online security was one of many major challenges to the Middle Eastern ecommerce industry identified in the report. Others included:

  • Wildly varying rates of credit card ownership in the region. Figures range from 97 per cent in Kuwait to only 15 per cent in Lebanon.
  • Slow adoption of mobile ecommerce technology among merchants. With mobile purchases becoming increasingly important, there are fears that sellers could get left behind.
  • Low levels of trust in sellers due to hidden costs. The report recommends more upfront pricing structures as a way of preventing shoppers from clicking the “Empty Basket” button.
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