In the UK, e-commerce is well established. The widespread availability of smartphones and tablets means that more and more consumers are using mobile technologies to shop, browse, review services and check the availability and price of products online, from anywhere.
The Global Retail E-Mpire study conducted by OC&C Strategy Consultants identified that the in 2013, the UK was “the world’s leading exporter of goods purchased online with a trade surplus of over $1 billion.”
Partner at OC&C, Anita Balchandani forecasts that “Over the next decade, online retail will become even more international…Consumers around the world use the internet as a global shop window. What used to be a local, national market is now a global one.”
There are many regions of the world yet to capitalise on the rapidly growing e-commerce industry but one of those emerging markets with real promise is the MENA (Middle East and North Africa).
Econsultancy, a “leading source of independent advice and insight on digital marketing and ecommerce” report that so far, the growth of e-commerce in the MENA region has fluctuated. In 2011 online sales grew by 63%. In 2012 they grew by 144% but in 2013 only 50% growth was achieved.
As the international agency explains, at first glance these figures “may seem to suggest that growth has peaked, but other factors play a part.”
Regional conflicts and the seasonal impact of Ramadan could be contributing to the instability of localised e-commerce development, but the MENA does have some advantages.
A study of e-commerce in the MENA commissioned by Visa identified that the region has a younger population than Europe, the USA and Japan with a median age of 25 who are “more open to embrace internet…e-shopping.”
Across many states, the labour force is multi-lingual and in countries like Bahrain, the absence of sales tax or VAT has “resulted in a controlled and low rate of inflation over the years that many investors find attractive.”
The issue of conflict and cultural differences will always pose difficulties to the global trade of any country. The biggest challenges faced by MENA nations who want to drive e-commerce are actually a matter of logistics, most notably payment options and delivery channels.
Work is already underway to resolve these problems.
Mawwell, a crowdfunding portal recently launched a service in the MENA to provide creative entrepreneurs with business funding, while digital payment giant Paypal has created new partnerships with Pokeware and the Cairo Amman Bank to develop online transactions in the region.
Furthermore, the MENA is about to come under the global spotlight as Dubai prepares to host the World Expo in 2020.
This is the first time that the event has been held in an MENA country and promises to attract worldwide investors and consumers to the region.
A key part of the Expo’s impact lies in the substantial $8.1billion investment Dubai is injecting into its infrastructure which will have a long term effect on its capacity to drive e-commerce, particularly in the delivery of goods.
Because the success of any e-commerce venture is largely reliant on the numerous ways that reliable delivery services facilitates online trade, the Universal Postal Union (UPU) has confirmed that “e-commerce and supply chain integration are key pillars of the world postal strategy” for the MENA.
The combined efforts of international and local investors is making the MENA region an e-commerce hot spot for development which looks set to expand significantly over the next few years.
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