Adveta dwivedi


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Adveta dwivedi

  1. 1. Brought to you by :Adveta Dwivedi E-commerce Landscape in Middle East
  2. 2. • Overview of the growth of ecommerce industry in the middle east over the last 5 years • The Status Quo • Ecommerce scenario on buying pattern and smartphone penetration. • Key Players - Names, website screenshots • Venture capital funds inflow • Customer insights - Key demographies, geographies, peak shopping seasons • Logisitics & Fulfillement - Issues with current setup & Suggested partners • Online payment processors - Suggested partners, integration options • Language options - English Vs Arabic • Digital Marketing options - SEO, SEM, sms marketing & social media. • Case Study. • Quo Vadis - What does the future hold? • Key Challenges • Positive Signs • Winds of Change • Entry of global giants AGENDA
  3. 3. Status Quo
  4. 4. 12.811.29.0 7.0 E-Commerce Sales Growth The PayPal Insights: e-commerce in the Middle East report conducted in conjunction with Ipsos shows that the Middle East’s online commerce market grew 29% from $7 billion in 2011 to $9 billion in 2012. bn$ 2011 2012 2013 2014 15.0 2015 bn$ bn$ bn$ bn$ *SOURCE : PayPal Insights: e-commerce in the Middle East report
  5. 5. In 2012, there were over 30 million people shopping online in the Middle East, an increase of 20% from 2011. Given that there were over 110 million internet users in 2012 (and over 120 million in 2013), almost 30% of these internet users are now active buyers online 11095 Mn 2011 2012 25 30 Mn Internet users Online Shoppers Active Online Users
  6. 6. $ Internet Users & Online Sales Growth $9 billion in 2012There are 110 million internet users in the Middle East and North Africa, of which 30 million are shopping online already. PayPal estimates a total population of 350 million. $15 billion by 2015 X2 *SOURCE : PayPal Insights: e-commerce in the Middle East report
  7. 7. Mobile E-Commerce The number is as high as 60% in the United Arab Emirates and Saudi Arabia. X6 $ $500 million on mobile in 2012. $3 billion paid for on mobile by 2015 *SOURCE : PayPal Insights: e-commerce in the Middle East report Nearly half (47%) of the Middle East population uses smartphones
  8. 8. $248$250$1521 $222 Things People intend to buy Online ! ANNUAL SPENDING(USD) COMPUTER TRAVEL CONSUMER ELECTRONICS JEWELERY/WATCHES CAR PARTS/SPORTS HOUSEHOLD FOOD N DRINKS $192 FASHION $133 $108 $107 $176 *SOURCE : PayPal Insights: e-commerce in the Middle East report
  9. 9. 20% of UAE online shoppers go to 10% of Egyptian and 13% of KSA e-consumers also visit the site respectively.
  10. 10. eCommerce penetration in the region Egypt Lebanon Saudi Arabia Kuwait UAE UAE Saudi Arabia Lebanon Egypt Kuwait 46% 25% 9% 8% 35%
  11. 11. J.P. Morgan Chase and Blakeney Management have invested over $20 million in Dubai-based ecommerce firm - Reuters is reporting Jabbar Internet Group, Naspers($75 mn) and Tiger group invested in In total, Souq has raised $150 million to date *SOURCE : Trade Arabia Jordan-based, a discount sales website, has received funding from international investors Antwerp-based Hummingbird Ventures and San Francisco-based Lumia Capital. Tiger has also invested in Dubai-based businesses and Venture Capitalists Inflow
  12. 12. Online consumer • According to recent research from Ipsos ,Online shoppers in the Arab world are more likely to come from the over 35 age group, with 53% of that group saying they bought online occasionally. • The 26-35 age group follow closely behind with 52% saying they bought online occasionally. • Men are more likely than women to shop online in the Middle East, with 46% of males compared to 32% of females shopping online. *Source IPSOS 2013
  13. 13. *SOURCE : Trade Arabia • Online spending frequency and sales have a large upward shift amongst Middle Eastern consumers during Ramadan. ! • In the U.A.E.,For example, the eCommerce market had a 40 percent increase in sales during the Holy Month in 2012 ! • Internet use in Saudi Arabia was reported to peak between 3am and 6am during Ramadan. Peak Shopping Season
  14. 14. NO recognized law, only hand carried regulations Companies can only send consolidated freights by road and not by air Aramex has worked very closely with e-commerce providers such as and, more recently, Namshi to optimize the inventory and delivery logistics. Customs costs remain prohibitively expensive Logistics
  15. 15. 6080 155 Payment methods for e-commerce In Qatar, 7% of online shoppers use PayPal to complete their transactions. Credit cards are used in 18% of the cases, and COD is used for the remainder, 75% of the time % % 2012 2015 15 25 Cash on Delivery Payment Cards Paypal
  16. 16. About 80% of online purchases in the Middle East are made with cash on delivery. Credit and debit cards make up 15%, and payment gateways the remainder.
  17. 17. Language(‫)ﻟﻐﺔ‬ English/‫ﺍاﻟﻌﺭرﺑﻳﯾﺔ‬ • Arabic is the language of the region. • Important to have bilingual website - English and Arabic. • 80% of the Google searches in Saudi Arabia are done in arabic. • Invest in arabic websites and concentration on arabic websites, search engines in digital space. • Google(95%), yahoo maktoob and bing are the popular search engines.
  19. 19. DIGITAL MEDIA • The total digital advertising spend in the Arab region in 2011 was only USD 175 million, representing 4% of the total ad spend in the region. Deloitte predicts that digital ad spend will grow at a CAGR of 35% in the region over the period from 2011 to 2015 reaching approximately 10% of the total advertising spend by 2015. • Branded apps are a key growth area, however, SMS messaging remains the most popular and most ‘effective’ medium of mobile marketing, particularly in emerging markets such as the Middle East from a return on investment perspective. • There is a strong unmet demand for Arabic content with wide variations across markets. In the UAE, at least 40% of respondents would prefer to browse in Arabic, while in the KSA, 99% of respondents prefer to browse in Arabic. • Advertising effectiveness is measured by a range of metrics standard across most advertising formats, such as cost per thousand impressions (CPM) and, for online advertising, click through rates (CTRs).
  20. 20. Algeria – ! Bahrain – ! Egypt – ! Iraq – ! Kuwait – ! Lebanon – ! Libya – ! Morocco – ! Oman – ! Palestine – ! Qatar – ! Saudi Arabia – ! Syria – N/A ! Tunisia – ! United Arab Emirates – ! Yemen – N/A
  21. 21. SOCIAL MEDIA An average UAE internet user is a fan of 43 pages on Facebook Facebook engagement in the Middle East increases 30% during Ramadan. Facebook ads in Egypt are now as popular as Google ads More than 70% of active users access Facebook from a mobile device The MENA region contributes around 2 hours out of 72 hours of video uploaded every minute on YouTube!
  22. 22. • About 23 million visitants to the website every month, potentially expected to increase even more • Over 6 million registered users who actively use the domain for purchase • Over 4,00,000 products featured as a part of the overall product catalogue across 15 major categories • As per Naspers’ report, the website is currently valued at about US$ 500 million • Employee count of about 1,000 personnel Naspers report Case Study : s PARTNERS
  23. 23. Quo Vadis
  24. 24. Challenges of E-commerce No street addresses for residential or business locations within the city, only P.O. boxes The Gulf region is also highly susceptible to online cyber attacks. A study by Norton from Symantec reported that two-in-five mobile shoppers in the MENA region have become a victim of cybercrime. Only 6 percent of Internet users regularly shop online, and almost half (43 percent) of users said they do not purchase online because they don’t trust the region’s online payments process. Logistics across borders.Customs costs remain prohibitively expensive, with additional fees frequently making the purchase of goods from overseas uneconomical – negatively impacting both suppliers and consumers Absence of the relevant e- laws necessary to provide proper levels of protection for consumers and vendors.
  25. 25. USA 307bn 353bn Europe 353bn 390bn Asia Pacific 220bn 278bn Latin America 43bn 54bn MENA 10bn 15bn World 960bn 1120bn 2012 UP2011index= B2C e-commerce and the growth rates per region (in US$) 15% 20% 35% 30% 45% 20%
  26. 26. LAND OF OPPORTUNITY Expected to be a $15bn market by 2015. Nearly half of the region is on smartphones. Paypal, google and aramex to invest in the market. VC funding companies investing in ideas.
  27. 27. • Despite the entry of global players like Amazon and eBay in some of the Arab nations, the online marketplace in the region is dominated by local retailers, led by • Local retailers not only offer consumers the opportunity to buy global brands and products, but also have a better understanding of the cultural and language requirements of the Arabs as opposed to multinationals like Amazon and eBay. • Still a belief the market will consolidate in the years to come and the large global online retailers will acquire fast growing local players to help increase their market share. Entry of Global Giants
  28. 28. NEW INITIATIVE Google, PayPal, ShopGo and Aramex recently announced the launch of a new initiative to empower retailers to head online in MENA for the first time. ! The idea is that the platform, called EZStore, will act as a hub or one-stop-shop for businesses wanting to go digital, enabling them to enjoy a three-way funnel process: promoting their online shops with Google, managing payments with PayPal and shipping merchandise though Aramex. “ “
  29. 29. Sources 1. a-study-by-paypal/ 2. trends-infographic/ 3. middle-east/#.U2De7q2SzkU 4. middle-east/ 5. 6. 7. 8. by-2018-1.1297490 commerce-MiddleEast-2012-2015.pdf ramadan-causes-online-shopping-to-increase/#.U2FTPq2SzkU 9. 10. fb67759e1cc6d310VgnVCM2000003356f70aRCRD.htm 11. raises-75-mln/ !
  30. 30. SHUKRAN