Marketers with a thirst for brand recognition are competing fiercely to dominate this region, but each are being hampered by something seemingly basic - how to take payment for goods.
Currently, 70% of all Ecommerce transactions in targeted areas of the Middle East are cash on delivery. At the Ecommerce show in Dubai (May 2015), Redbox Global Marketing Director Oliver Turnbull was chairing a round table discussion with a number of key marketers and businessmen. His side bar discussion focused on how to provide a trusted payment gateway to a specific Middle Eastern consumer base. It was surmised that consumers in this region are slow to trust Ecommerce sites with personal or financial information. This inherent absence of trust between brand and customer is the only real barrier preventing Ecommerce from flourishing across the Middle East.
During the conference, we hosted a round table session with Middle Eastern retailers to ascertain how consumers could be better served. Some of the key points to come from the session included the following:
- People feel they will not get as good value online as they do in-store. Bartering and negotiation are key cultural considerations.
- Women in the region are statistically less likely to provide personal data than the worldwide average. This proved to be an obstacle to the building of customer databases and the reviewing of trends.
- Regional logistics make existing Ecommerce strategies challenging, or hugely impractical. Soaring temperatures in the summer months for example make next day delivery options far too difficult for perishable goods that require refrigeration. For a positive effect on user experience, area specific strategies are required.
- Personal relationships with shop owners are still preferable to trust in a brand or enterprise. The trust barrier is yet to be successfully breached by online brands in the Middle East.
Cultural and traditional barriers aside, the opportunities available in the Middle East are staggering. Levels of disposable income amongst the general populace have never been higher, the rate of mobile phone penetration is phenomenal and the aspirations of businesses wishing to be at the cutting edge of technology is growing with considerable pace. The next few years will see the Middle East skyrocket in terms of commercial growth.
The mobile sector in particular has seen mammoth growth in the last few years alone, and there is no sign of the trend decelerating. The UAE is not the world leader in mobile phone penetration, far ahead of the UK and US.
By tailoring Ecommerce solutions to take advantage of the extremely high rates of mobile penetration, we can give businesses with consumer bases in these countries a significant advantage over their more traditional counterparts.
Redbox Digital has been in Dubai for nearly two years and are the only Gold Magento Partner to maintain a permanent office in the region. With an additional office in Jeddah due to open in August 2015, Redbox Digital are primed to lead the development of Ecommerce in the Middle East. With our local knowledge, established base and consumer research practices, we can create successful Ecommerce platforms tailored to a unique Middle Eastern audience.