MENA is a ~$2.8Tn economy with a young and vibrant digitally evolved population and strong enabling logistics infrastructure, making the region a fertile ground for digital solutions. Strong regulatory backing, coupled with macroeconomic tailwinds including the pandemic has accelerated the evolution of the MENA digital economy. Online service users are set to grow by 100 million to power 15% of economic growth in the region over the next 5-6 years, with the digital economy poised to grow to ~USD 269 billion by 2027.

1. © 2022 RedSeer Consulting confidential and proprietary information
Dubai. Bangalore. Delhi. Mumbai. Singapore. New York
Solve. New
MENA Digital Economy: On the
cusp of a digital revolution
August 2022

2. 2
© RedSeer
MENA is a ~$2.8Tn economy with a young and vibrant digitally evolved
population
~$2.8Tn
Economy
Consumer
expenditure
50%+
of GDP
~60%
Internet Users
>110
Mobile
connections
per 100
people
~7%
Digital
Economy
Penetration
Source(s): Desk Research, World Bank, Redseer IP
Young & Vibrant
Large Urban Population and
Expat Friendly
Linguistically Alike
Arabic
Official
language in all
countries
26 yrs
Median Age
(one of the
lowest globally)
65%+
of population in
urban
>48%
population
female
Note: Countries included in MENA are GCC countries, Egypt, Morocco, Iraq, Tunisia, Algeria, Libya, Lebanon, Yemen, Syria & Jordan
48%+
of GCC
population is
Expats
English
Widely accepted
in most of the
countries

3. 3
© RedSeer
MENA is home to a digitally ready population with strong enabling logistics
infrastructure, making the region a fertile ground for digital solutions
Source- Redseer Analysis
Supportive Macro And Strong Digital Enablers
Logistics Performance
%, 2019
GDP/Capita by Region
USD, 2021
Median Age by Region
#, 2021
Internet Penetration as % Total Population
%, 2021
26
LATAM USA
MENA India China
SEA
7,666
SEA
India
MENA LATAM USA China
LATAM
SEA China
MENA India USA
67%
3.0
China
LATAM
India USA
MENA
14%
SEA
LPI (Logistics Performance Index)
Logistics cost % of GDP
Note: Countries included in MENA in digital economy section are GCC countries, Yemen, Levant region (except Palestine) and Northern Africa (except Sudan and Western Sahara)

4. 4
© RedSeer
Web 3.0 Regulations
Cybersecurity/Data Localization
• UAE Digital Economy Strategy aims to double the contribution
of the digital economy to the GDP from 9.7% to 19.4% by 2032
• KSA aims for 70% cashless payments in Vision 2030
• Jordan Vision 2025 aims to digitize more than 80% of
government payments and mobilize around US$20 Mn
investments
National Vision Programs
Favorable Employment Policies
Governments are supporting the ecosystem by undertaking key initiatives to
boost Digital Economy in the region
• UAE and Bahrain govt. have taken steps to recognize the use
of blockchain and regulate the cryptocurrency market
• Favorable regulations led to emergence of cryptocurrency
players such as BitOasis, Rain and CoinMENA in the region
• Golden Visa system allows foreign nationals to live, work,
conduct business and study in UAE without requiring a
national sponsor
• UAE has introduced freelance visas for a host of categories to
woo talent into the country
• Saudi government has introduced Labor Laws to improve
transparency and mobility for expat employees in the private
sector
• Across MENA, countries are developing frameworks for data
localization and privacy. UAE data localization policy is one
such example
• New Saudi data privacy regulations aim to increase
confidence in e-commerce by providing consumers necessary
protections against fraud.
Source(s): Desk Research, Redseer Analysis

5. 5
© RedSeer
The timing of the pandemic helped digital economy overall, but more so for
MENA...
Source(s): RedSeer Analysis, Desk Research
Key Takeaways
 Rapid digital adoption was
witnessed in 2020 because of
limited physical movement
resulting in less offline shopping
 High organic demand led to
better unit economics, creating a
favorable environment for the
startup ecosystem to grow
 Players utilized this opportunity
to enhance their capabilities to
meet the excess demand
Standard
Evolution path
New Evolution
path
Digital economy evolution
Conceptual representation
Year of Existence
Penetration
Customer
Acquisition
Cost
The behavioral changes influenced by the pandemic were advantageous for the MENA region as it aided customer acquisition in
the phase where maximum cash burn happens on customer education/awareness & acquisition
Note: Countries included in MENA in digital economy section are GCC countries, Yemen, Levant region (except Palestine) and Northern Africa (except Sudan and Western Sahara)
MENA
SEA
USA
China
1
2
3

6. 6
© RedSeer
...setting it up 100m new users to power 14% of economic growth in the region
over the next 5-6 years
Source(s): RedSeer Primary Research and Analysis
Underpenetrated market, presents immense upside
Growth left in mature & frontier markets
Online service users to increase by 100Mn in 2027
Digital to power 14% of economic growth
2021
86%
2027(F)
14%
Additional
Increase in GDP
Digital Economy
MENA GDP
USD Tn, 2021 – 2027(F)
2021 2027F
Smartphone Users (Mn)
Online Services Users
(Mn)
At least one transaction
for any e-commerce
service
Active Internet Users
(Mn)
Total population using
internet atleast once a
year
+100 Mn
Increase in
Userbase
Fashion Electronics FoodTech Ride Hailing Healthtech
MENA Region 1 Region 2 Region 3 Region 4
Online penetration
In %, 2021
Sectors UAE KSA Rest of MENA
Ride Hailing 15% 17% 16%
Payments 12% 16% 15%
E-tailing 19% 22% 28%
Services- Mature Sectors1 14% 15% 15%
Services- Emerging Sectors2 27% 28% 29%
Digital Economy Sector vs Country Growth Matrix
% CAGR for period 2021 – 2027F
Note: 1.Mature Sectors include Travel and Ride-Hailing. 2. Emerging Sectors cover InsurTech, EdTech and HealthTech
Current Online
Maturity
>>>
Nascent
Matured Growing

7. 7
© RedSeer
High NPS in digital economy has driven intent to increase spend in the future
Source(s): RedSeer Consumer Survey, RedSeer Analysis
NPS1,2 across different Sectors
NPS Score
Spend Increase3 among Current Sector Users
% net increase among Current Users for each Sector in next 12 months
Edtech
Ridehailing
Online Travel
Fintech
58%
59%
Foodtech
E-Tail
Healthtech
59%
55%
54%
53%
46%
Note(s): 1. It is largely representative of UAE & KSA consumers
2. On a scale of 0-10, how likely are you to recommend the following websites to your friends & relatives? (0 - Not at all Likely, 10 - Very Likely)
3. How will your spend change on digital activities for the following categories in the next 12 months?
Online Travel
Foodtech
Healthtech
5%
Fintech
Edtech
7%
E-Tail
Ridehailing
14%
10%
10%
10%
7%
Edtech to see
highest spend
increase as currently
most of the users
are watching free
content
Average NPS
pre-pandemic: 40%

8. 8
© RedSeer
Millennials and Gen Z will shape the future of digital economy in MENA – these
cohorts are digital natives and have values rooted around sustainability
1946-64 1965-80 1981-96 1997-2012
• Idealistic
• Collectivist
• Techno-skeptic
• Desire to
own/possess
• Competitive
• Tech-novice
• Experience
seekers
• Tech-savvy
• Individualistic
• Tech dependent
• Realistic
• Social
• Expect
Customization
Baby Boomers Gen X Millennials Gen Z
Behavior/Context
Digital
Consumption
MENA Population split1
By Generation type
Millennials and Gen Z
together account for >50%
of the total population of
MENA
Ordering Frequency
Online Wallet
share
14%
22%
28%
25%
Gen X
2020
Gen Z
Millennials
Baby
Boomers
Low High
Source(s): Consumer Survey, RedSeer Analysis
Gen Z and Millennials will drive consumption by 2030; These cohorts are conscious about their
environmental impact and will drive traction to sustainable practices and circular economy

9. 9
© RedSeer
Overall, $91 Bn MENA digital economy in the region is expected to be $251 Bn
by 2027
2019 2020 2021 2027F
65 66
91
251
+2%
+38%
+18%
Source(s): RedSeer Analysis, Desk Research
Digital Economy – MENA
$ Bn, 2019 – 2027F
2019:2020
Disruption Phase
• The onset of the COVID-19 pandemic helped
drive mass adoption of e-commerce, with the
customer base in the region expanding to Gen
Z and Gen X users
• This period witnessed the rapid rise of online
grocery, food delivery and other quick
commerce platforms
• Furthermore, to support the growth of the
digital economy, government’s in the region
implemented regulations on digital payments
to drive adoption and fuel e-commerce growth
2021:2027
Acceleration Phase
• The post pandemic digital economy has
seen the rise of emerging sectors
including HealthTech, EdTech and Fintech
• Regulation and government initiatives
across MENA will unlock investments and
drive growth, with future growth arriving
from hinterlands
• However, inflationary pressures, cross
border regulations and geopolitical
instability present challenges to the
digital economy growth
2016-19:
Growing Phase
• Tech-Savy, Gen Y, Affluent Consumers
were primary adopters of the digital
economy
• E-Tailing players were the first movers
into the digital space
• UAE began as the regional hotspot for
the digital economy buoyed by its strong
internet penetration rate and high share
of educated customers

10. 10
© RedSeer
E-Tail and Travel are the two largest sectors, contributing ~60% to the Digital
Economy
2019 2020 2021 2027F
65 66 91 251
Source(s): RedSeer Analysis, Desk Research
Digital Economy Sector Split – MENA
$ Bn, 2019 – 2027F
Others
E-Tail Travel
Note: 1.Others include Ride Hailing, FoodTech, HealthTech, EdTech and Bill Payments
Key Takeaways
 Growth sectors including EdTech,
HealthTech and Fintech are
currently underpenetrated in the
region. Going forward, rapid growth
is expected in these sectors as
currently observable in economies
including USA, India, China
 Super App focus of digital startups
in the region will generate new
growth trajectories. By increasing
customer use cases, customers are
expected to display improved
loyalty and cross adopt services
including food & grocery delivery,
ride hailing, digital payments, etc.

11. 11
© RedSeer
While UAE & KSA drive large majority of the market currently, other markets are
set to outgrow them in coming years
2020
2019 2021 2027F
65 66 91 251
Source(s): RedSeer Analysis, Desk Research
Digital Economy Country Split – MENA
$ Bn, 2019 – 2027F
UAE+KSA
Rest of MENA
Key Takeaways
 Growth in the digital economy in the
UAE & KSA are anticipated to come
from emerging sectors including
EdTech, HealthTech and FinTech
 Growth in digital economy of other
countries in MENA including
Jordan, Egypt, Iraq and Rest of
MENA will come from both
emerging sectors and matured
sectors
Note: 1.Rest of MENA countries include other GCC countries, Egypt, Morocco, Iraq, Tunisia, Algeria, Libya, Lebanon, Yemen, Syria & Jordan

12. 12
© RedSeer
Coverage of full perspective
• Macro trends
• Regulatory and investment environment
• Digital economy enablers
• Digital economy sector1 adoption and growth
• Digital economy evolution by sector
• Online penetration by sector & comparison with other global markets
• NPS and spend increase among current sector users
• Digital economy size (2019-2027F)
• Digital economy sector split (2019-2027F)
• Digital economy country2 split (2019-2027F)
• Digital economy sector vs country growth matrix (2019-2027F)
• Online market overview by sector – Market Size & Segmentation, Competition, Relative attractiveness
Thank you for you time.
This was an overview of the digital economy. The full perspective goes into a
lot more detail as outlined below
Note(s): 1. Sectors covered include E-Tail, Travel, Ride Hailing, FoodTech, HealthTech, EdTech and Bill Payments
2..Countries covered include GCC countries, Egypt, Morocco, Iraq, Tunisia, Algeria, Libya, Lebanon, Yemen, Syria & Jordan

13. 13
© RedSeer
Country level deep-dives:
• UAE
• KSA
• Qatar
• Kuwait
• Egypt
Sector level deep-dives:
• E-Tail
• Food Tech
• Travel
• FinTech
• HealthTech
• EdTech
• Classifieds
• Ride Hailing
• PropTech
Furthermore, we have country and sector level deep-dives for Digital Economy
Source(s): RedSeer Approach

14. 14
© RedSeer
Authors
Sandeep Ganediwalla
Partner
Redseer MEA
Akshay Jayaprakasan
Engagement Manager
Redseer MEA
Abhishek Rajput
Associate Consultant
Redseer MEA
Nikhil Harikumar
Business Analyst
Redseer MEA

15. 15
© RedSeer
Project Team
Siddharth Bhatt
Associate Consultant
Redseer MEA
Kayan Hammoud
Business Analyst
Redseer MEA
Milli Saklani
Business Analyst
Redseer MEA
Muskan Jaiswal
Business Analyst
Redseer MEA
Susri Padhi
Business Analyst
Redseer MEA
Leticia El Zein
Business Analyst
Redseer MEA

16. 16
© RedSeer
Source(s): Consultancy Middle East
Top strategy consulting firms in the Middle East
Top e-commerce consulting firms in the Middle East
Top retail consulting firms in the Middle East
Top private equity consulting firms in the Middle East
Platinum Consulting Firm Pioneering the METAP Digital Economy
About Redseer - Industry Pioneer in the Middle East

17. redseer.com
Solve. New
Disclaimer and confidentiality notice: This document contains
information that may be confidential and proprietary. Unless you are
the intended recipient (or authorized to receive this document for the
intended recipient), you may not use, copy, disseminate or disclose to
anyone the message or any information contained in the document.
© 2022 RedSeer Consulting confidential and proprietary information
Dubai. Bangalore. Delhi. Mumbai. Singapore. New York
For enquiries on the perspective please contact us at:
mea@redseer.com
facebook.com/redseerconsulting
twitter.com/RedseerME
linkedin.com/company/redseer-mea/