A recent research conducted by The PayPal on e-commerce in the Middle East in conjunction with Ipsos shows that the Middle East’s online commerce market grew 29% from $7 billion in 2011 to $9 billion in 2012. The Middle East market will reach $15 billion by 2015 and this year’s growth reveals that the market is on track to meet our projected growth figures.
This growth was driven by a massive jump in the Middle East’s online commerce population, as well as a flood of local retailers coming online and offering local consumers what they could only have found outside of the region before. In 2012, there were over 30 million people shopping online in the Middle East, an increase of 20% from 2011.
Click here to read a series on e-Commerce Entrepreneurs in the Middle East.
The healthy growth in online spending in the Middle East is due to a number of factors:
new consumers purchasing online for the first time; retailers establishing an online presence or increasing the sophistication of their current online offering; a number of major international retailers marketing directly to consumers in the region and finally, the explosive growth of mobile commerce.
While travel remains the most popular item for online shoppers, the PayPal Insights: e-commerce in the Middle East report has revealed increases in spending on other items such as computers, consumer electronics, and fashion and jewelry.
Along with the dramatic growth in spending and the online commerce population, cross-border e-commerce is booming in the MENA region, with more than 70% YoY growth. The growth is driven by the limited choice currently available in the MENA region.
While everyday new e-merchants open their e-store in the region, the majority of the shopping remains cross border distributed among the US (35%); Asia (30%) and Europe (25%), the intra MENA region represents already 10% of e-trade. Indeed, local online offering is growing.
The PayPal Insights: e-commerce in the Middle East report shows that consumers in the Middle East love to shop on Souq.com or Wysada to discover new trends and incredible products.
Mobile transactions already represents 10% of e-commerce (similar to the rest of the world), the research shows that with a 6 times growth in the next 4 years, m-commerce will represent close to 20% in the Middle East in 2015. This means that while purchasing via desktop/laptop remains dominant, there is a mobile mind-shift occurring with the rise of tablet and smartphone penetration.
Purchases made on a computer remain the most dominant throughout the Middle East, especially to buy computers or airline tickets. However, m-commerce is expected to grow in almost all categories within the three countries. 56% of total online shoppers in KSA make their online purchases from home or at work, while 55% do so in UAE and 90% in Qatar.
Consumers find that using tablets somewhat is more enjoyable for shopping online than smartphones. However, the main barrier to online shopping for Tablet users is the feeling of a lack of security during the transactions. Lack of user-friendliness is a primary barrier towards even greater adoption of mobile purchasing.