e-commerce: Only warming up

Shady Elborno - Head of Macro Strategy
Published Date: 14 April 2021

 

The e-commerce sector in the MENA region (and much of the world) has been one of the clear success stories of the pandemic, as Covid-19 only accelerated a shift that was already taking place. For businesses that have chosen to embrace this shift, e-commerce has delivered. It enabled many brick and mortar stores that would have otherwise been inaccessible through this pandemic to survive, grow and even thrive. It has seen global e-commerce giants become even more strategic players in the global economy. More importantly it has largely altered the DNA of how businesses interact with their consumers, creating value for consumers through pricing and choice, and for businesses through reach and efficiencies.

While the level of development of the e-commerce landscape across much of the region is not really balanced, the region has a number of variables that support adoption. Three main drivers are, a young population that is largely digitally savvy, wide and deep penetration of mobile communications and internet access, and an eco-system that is rapidly adopting digital payment solutions, increasingly through fintech. We see much of the region continuing to embrace this shift towards e-commerce, not only due to the pandemic, but as part of a natural shift that makes sense given the presence of strong drivers that support adoption. In the long run e-commerce will deliver gains to both consumers and businesses in the region and allow economies a platform on which to drive economic development and growth.

In this short note, we will focus on the gains specifically in the UAE, as it leads both MENA and the GCC region in the development of its e-commerce marketplace. Having the highest internet and mobile phone penetration in the region, the most developed digital payment solutions backbone, and as the region’s logistics hub, it is natural for the UAE to be an axis for e-commerce in the wider MENA region. We will look at the picture both pre-pandemic and post-pandemic, the dynamics that will drive long term e-commerce trends, and the changes which are likely to come. In short, a snapshot of where we are and where we are headed. We believe the UAE will be the ideal ground where much of the regional architecture defining the new chapter of e-commerce dynamics are drawn and will be an excellent blueprint for the potential the region can achieve in the long run. 

Click here to Download Full article