Ecommerce At High-Growth Stage In MENA
Around 91% of respondents said they regularly shop online, up from 87 per cent in 2021. Ecommerce in the MENA region has settled into a stable, high-growth era, with increased opportunities for ecommerce players. Data from leading global payment solutions provider Checkout.com’s report: Digital Transformation in MENA 2022, proves that the ecommerce trends accelerated by […]
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Around 91% of respondents said they regularly shop online, up from 87 per cent in 2021.
Ecommerce in the MENA region has settled into a stable, high-growth era, with increased opportunities for ecommerce players. Data from leading global payment solutions provider Checkout.com’s report: Digital Transformation in MENA 2022, proves that the ecommerce trends accelerated by the pandemic are here to stay. The report surveyed over 15,500 shoppers across the Middle East and North Africa.
Ecommerce Penetration Deepens
In the past three years, ecommerce has grown faster in the MENA region than anywhere else in the world. An estimated 209 Million consumers are transitioning to online shopping during the height of the pandemic. With the pandemic’s lockdowns now behind us, the number of ecommerce shoppers in MENA only continues to grow. According to the report, 91 per cent of respondents said they regularly shop online, up from 87 per cent in 2021. Further, more than half (52 per cent) of MENA residents said they shopped more frequently this year, up from 47 per cent in 2021. On a more local level, looking at the GCC, we see that 9 per cent of consumers are spending money online at least once per day, which is a 50 per cent increase in the past 12 months.
These positive trends will continue, with 88 per cent of respondents across MENA saying they will increase their online purchases over the next year.
In parallel, as the regional economy thrives and the pandemic recedes, we see an increase in consumers spending money online within categories such as travel and tourism, events and entertainment. However, with a total of 45 per cent, prepared food remains the number one category customers spend their money online on.
Digital Payments Surge
Consumer appetite for digital payments continues to rise, maintaining 2021 trends. Seventy per cent of consumers across MENA use a digital payment method – up from 60 per cent in 2021 and 40 per cent in 2020, representing a 75 per cent increase in 24 months. The figure is even higher in the GCC region, which has a much higher digital penetration, with 80 per cent of GCC consumers now favouring digital payment methods.
These results mirror the sharp rise in payment apps and digital wallets in the region, where 82 per cent of consumers in MENA report using some form of fintech app in 2022, up from 76 per cent in 2021. In fact, across the entire region, we see a continued uptick in adopting digital wallets as the go-to payment method, with a six percentage point increase in 24 months. In particular, countries such as Egypt, Qatar and Saudi have nearly doubled the popularity of digital wallets. Conversely, Cash on Delivery (CoD) has declined precipitously in MENA, with an almost 40 per cent drop in the past 24 months.
Sophisticated Consumer Base
There is a continued appeal of Buy Now Pay Later (BNPL) options and s-commerce (social commerce). Nearly half of the UAE and Saudi Arabia consumers used BNPL this year. Across MENA, 39 per cent of consumers used a BNPL option in 2022, up from 24 per cent of consumers in 2021, representing 64 per cent YoY growth. A further 28 per cent of consumers who have not used BNPL hope to use it in the next 12 months, meaning as many as 67 per cent of consumers in MENA may use the method in 2023. The penetration of BNPL is higher in MENA compared with the US and Europe.
With the ever-increasing average time people spend on social media per day, it is not surprising that a fifth of consumers in MENA say they now frequently shop via social media channels (social commerce), representing a 43 per cent growth in the past 24 months. Meanwhile, the appetite for social commerce has doubled in KSA and the UAE.
Remo Giovanni Abbondandolo, Vice President for MENA at Checkout.com, said, “The report validates our conclusions from last year – that the region’s ecommerce and digital payment ecosystem is growing rapidly. A digitally savvy population and a mature retail sector will ensure these gains are sustained in the long run. Additionally, the growing trust in online payments by regional shoppers means the digital transformation of the region’s retail sector is well underway. The emergence of Web3 underlines this as a key component of the online experience. Shoppers showing a significant appetite for transacting on-chain, and a desire both to be paid and to pay in digital currencies.”
Conclusion
The report shows that fintech and digital payments adoption continues to soar across the region. Merchants are racing to keep up, and as they do so, they continue to innovate and diversify their consumer offerings. Consumers, of course, are quick to respond and the competitive landscape sharpens as the benchmark for consumer expectations continues to climb.
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