Let’s look at the rest of the world to being with.
Global B2C ecommerce sales have reached around $1tn, with annual growth at 20%. Growth in some geographical areas is of course quicker.
- Asia B2C ecommerce sales were $333bn in 2012, rising to $398bn in 2013, an increase of 33% YoY according to Forrester.
- Asia B2C ecommerce sales are expected to reach $858bn by 2018.
- China’s B2C ecommerce alone is expected to reach $541bn by 2015.
India is another region on the path to rapid growth. B2C ecommerce was a $16bn market in 2013, an increase of 85%. One of the culture caveats here is that 60% of internet users shop online, which is quite a high proportion. As the users enumerate, ecommerce should continue to rise as dramatically.
The Indian market is expected to reach $56bn by 2023 according to Assocham.
The Turkish market was $7.3bn for B2C ecommerce in 2012 and is another one to watch, some predicting it could hit $30bn by 2015.
South Africa represents a relatively modest sum at $0.3bn in 2012 but is yet set to increase.
Sales in 2013 amounted to $11bn, with $15bn estimated by 2015, according to PayPal’s 2013 report.
Under 25s represent 60% of current MENA population. This in part accounts for rapid growth and potential of the MENA ecommerce market.
Top buying countries online in MENA:
1. Saudi Arabia
Across MENA, growth rates have fluctuated. 2011 saw a 63% increase in online sales, 2012 a 144% increase and 2013 a 50% increase in online sales. This may seem to suggest that growth has peaked, but other factors play a part, general internet usage, infrastructure etc.
Annual fluctuations in shipment volumes are seen as Ramadan moves back 10 days each year (less parcels are shipped during Ramadan).
In 2013 the most popular products bought online were:
3. Beauty products
In the gulf states, duties are only 5% and this has a big impact incentivising imports into the region.
40% of MENA ecommerce imports are to Saudi Arabia.
One of the major cultural issues in MENA is payment. 79% of ecommerce transactions are paid for with cash on delivery (COD).
The other 21% are paid for online. COD has an impact on logistics and returns, the return rate can be as high as 23% as the customer is more likely to return something if they haven’t already paid for it.
Mobile is also having an impact on ecommerce in MENA, and not just through m-commerce. In the past any imported delivery would have to be consigned by the customer physically, tracked down to sign a document.
Now, 30% of consignment by customers is done via a text message and ‘click a link’ system. This saves time and stops some returns.
Dubai is set to experience increased air traffic as Emirates has more planes in its fleet. This capacity for transport is likely to make Dubai the regional hub for shipment.
Hurdles to ecommerce in MENA include lack of trust when buying online.
An IPSOS survey in May 2013 reported 56% of online shoppers had reported credit card fraud and 37% mentioned non-returns policies as a stumbling block.