The changing face of Ecommerce in the Middle East

Ecommerce is growing rapidly in the Middle East

So rapidly in fact that obstacles from the conventional retail model still persist in creating problems for startups and established companies alike.

Ecommerce is evolving in the region but continues to hang on to problematic aspects of conventional retail. In the 'State of Payments' research report by Payfort, Ecommerce retailers of all sizes were asked a number of questions in order to gain an accurate depiction of the state of Ecommerce, and the obstacles it faces.

50% of all the retailers questioned struggled to balance their new online service with their in-store policies, indicating a clear disparity between online and in-store strategies. What is widely lacking in the region is Omnichanel strategy, which joins the two strategies into a single approach, each enhancing the other. The reasons for this range from financial to the lack of technical expertise, but they are also cultural. The process of payment for instance is still very much set in its ways with Cash on Delivery options being the most popular - and extremely damaging to the overheads of small or start-up Ecommerce companies:

It is predicted that the company which first cracks the credit card and advance payment problem in the Middle East will gain market dominance. It is also believed that by 2020, almost all Ecommerce transactions will be made on credit or over mobiles, rather than the current statistics seen below:

Ecommerce in the Middle East is evolving faster than the culture is adapting to it. The persistence of 'cash on delivery' is proving exceptionally damaging to small and start up companies due to the overheads of delivery and the uncertainty of return. At some point, a company will emerge which will tread the line between what is old and what is new, will be able to phase out cash on delivery, and change the public's engagement with Ecommerce.

That company will change the game, and will dominate online retail in the Middle East.

David Fuller, Managing Director of Redbox Digital's Dubai office commented:

The findings of the Payfort report are in line with what we experience in the Middle East market on a day to day basis, but things are changing fast. These are modern cities with modern economies and modern consumers who have the latest smartphones and know how to shop online, even if they have to get their goods delivered from Europe or the USA. Most of the large retailers are not waiting around to lose their business to overseas online shops. The payments and logistics will come online soon enough.

We've already delivered Ecommerce solutions for some of the biggest and well known brands in the Middle East including Chalhoub Group and Sun and Sand Sports.