Major Factors Driving E-commerce Industry in the MENA Region

Posted by Desertcart Oman on October 28th, 2022

E-commerce is a growing trend among consumers in the Middle East and North Africa (MENA) region. The e-commerce industry within the MENA region has been growing steadily over the past few years due to increased internet penetration, rising disposable income and increasing smartphone usage.

In this blog post, we will discuss the major factors driving e-commerce growth in the MENA region.

Growth in Mobile Commerce

We Look at Some E-commerce Industry Analysis:

In 2020, 3.7 billion mobile phones were in use worldwide (Gartner), which is expected to increase to 5.3 billion by 2023 (World Bank).

The number of mobile phone users across the MENA region has grown by nearly 10% between 2013 and 2018 and is projected to grow at a CAGR of 4.9% between 2019-2026 (IDC).

A commensurate increase has matched this growth in mobile phone usage. For example, the Facebook app alone had over 250 million active users each month in MENA as of 2017—a figure that has jumped up more than 50 million since then.

Mobile apps are also becoming more popular; they now account for over 90 percent of all downloads on Google Play Store compared with just 60 percent five years ago (Google).

The rapid increase in smartphone ownership means that people have easy access to their bank accounts via their phones, so it should be no surprise that e-commerce payments via smartphones are growing rapidly too!

Many e-commerce platforms offer customers different payment options, such as credit card payments through PayPal or even cash-on delivery options allowing consumers who don't want their information stored online to get around potential privacy concerns associated with using credit cards online without sacrificing convenience or ease of use when making purchases online!

Increased Use of Social Media

The use of social media is on the rise. It's a powerful tool for e-commerce, helping to build brand awareness, loyalty, and sales. Social media may promote products throughout the buying cycle. Like research, information seeking, purchasing, and post-purchase experience.

Facebook, Instagram, and Twitter in MENA allow merchants to reach audiences in various countries without opening local offices. The ease with which you can reach out to your target audience using these tools makes it a great way for businesses in this region to capture new customers who may not have been aware of their products.

Larger Number of Online Payments

• The number of consumers making purchases online is growing.

• There are more payment options available.

• Consumers are increasingly turning to credit cards, and mobile wallets are expanding quickly.

Adoption of Marketplace Model

The “marketplace model” has made e-commerce more accessible to buyers and sellers. In this model, an online platform allows buyers and sellers to connect with each other and trade on the website created by the company or organization. 

Examples of marketplace models include Amazon, eBay, Alibaba, and others. Even B2B websites have adopted this approach: Alibaba (China), Rakuten (Japan), and Aliexpress (Russia) are just some examples that come to mind.

More Social Media Usage

Social media has become an integral part of our lives, and it's only getting more powerful as we move forward. People are using social networks to stay connected with friends and family.

Businesses are also harnessing the power of these platforms to engage with customers and promote their products. Facebook reports that users spend an average of 40 minutes daily on its platform. It's impressive when considering that this is just one platform!

The MENA region is no exception to this trend: people here use social media sites like Facebook, Twitter, Instagram and Snapchat daily for personal and business purposes. Social media can help you reach your target audience in this saturated market.

Increase in the Usage of Mobile Commerce (M-Commerce)

M-commerce is using mobile technologies—cell phones, smartphones and tablet computers—to engage in commercial transactions.

The factors driving this change include increased use of smartphones and tablets, increased use of mobile apps, and an increase in the usage of mobile browsers. M-commerce includes QR codes (Quick Response barcodes), which are visible on billboards across cities such as Cairo and Dubai. 

Users can activate coupons or limited-time offers with a simple smartphone scan. QR codes are being used increasingly throughout MENA countries due to their ease of use. They can also be found on business cards or brochures prepared specifically for mobile devices.

There has also been an increase in banking apps - banks offer financial advice through these banking systems so customers can make informed decisions about how best to manage their finances based on their individual needs rather than just relying on traditional "face-to-face" meetings at bank branches.

Emergence of 3D Printing

These are the e-commerce industry trends. 3D printing is a process of making a physical object from a digital file. Medicine, automobile, and aerospace employ 3D printers. 3D printing is popular in MENA for rapid prototyping and bespoke products.

Consumers Are Opting For Cross-Border E-Commerce Retail Industry

If you’re a regular shopper, you might have noticed that more and more people are buying their goods from foreign worldwide shipping stores. This is because of a few trends that have emerged in the region:

• The high cost of living in most cities has made people need to buy cheaper products from abroad.

• Consumers can now choose from an array of options when looking at items they want to purchase. This means they don’t need to settle with items available locally as they can find better deals on other websites or platforms.

• Consumers can now get access to brands or products that aren't available locally through cross border shopping websites like DC and Souq (which are based out of the UAE), Amazon (based out of Dubai) and eBay (based out of Beirut).

Blockchain Technology

This is another tech for e-commerce industry growth. Blockchain technology is a decentralized digital ledger that records transactions across many computers. The record cannot be altered retroactively without altering all subsequent blocks and the network collusion. 

This makes it an ideal technology for e-commerce industry market size. It provides a secure, trusted transaction environment and creates an immutable chain of custody.

Integration of Virtual Reality and AR Into Shopping Experience

Virtual reality (VR) is the creation of a virtual environment. It is presented to the user so that the user suspends belief and accepts it as a real environment. The virtual world can be similar to the real one but also differ significantly.

In terms of the overseas online shopping experience, VR will allow you to visit the store without leaving your house. This technology works well for companies that are active in different markets simultaneously.

It allows them to open new stores without investing in expensive infrastructure. It can also serve as an effective tool for demonstrating product features. Also, providing customers with valuable information about products they're interested in buying.

Final Words:

The MENA region has seen a rise in the adoption of MENA e-commerce over the last few years. 

This has been facilitated by factors such as increased use of social media and a larger number of online payments, which have allowed consumers to spend more money online.