Understanding E-Commerce Challenges In The Middle East
Gulf Business|January 2018

Amol Kadam explores the challenges faced by online retailers, and how to take pole position in the growing industry.

Amol Kadam

We have seen some game-changing developments in the e-commerce industry in the region of late – two significant events in this time were the entry of Amazon with Souq, and Noon taking over JadoPado.

It was reported during the Amazon deal that e-commerce accounts for just 2 per cent of retail sales in the Middle East, while according to a report published by BMI Research, the Middle East is one of the fastest-growing e-commerce markets in the world. The report also projects that the sales volume of this region will expand to $22.3bn by 2020.

But when looking at the current state of the market, Gartner reports that only 15-18 per cent of businesses in the region have an online presence and 90 per cent of online shopping import products from outside the region. These numbers show the challenges and the opportunities that lie ahead for the online retailers.

I believe many of these issues or challenges are related to the users, but ultimately, they unearth some real business challenges.

I want the best price, always – users’ motivation to go online 

You may think ‘how would user motivation be a challenge for the e-commerce industry?’ The problem is that motivation – if wrongly placed – can work against the industry’s growth.

As per PwC’s 2017 e-commerce report, 40 per cent of respondents in the region said ‘cheaper price’ is the biggest motivation to buy online. Outside the region ‘convenience’ has always been the biggest motivation.

It's known that e-commerce stores incur less overhead costs and can pass on those savings to shoppers. However, at this stage of the industry and for its growth this motivation is pulling the industry into the wrong lane. The fight seems to be to become the cheapest online store, whereas other factors such as service and end-to-end user experience are lower on the priority-list for business owners.

I want it now – logistics and delivery 

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM GULF BUSINESSView All

Special Report: Money matters

Exploring the future of wealth management in the GCC

10+ mins read
Gulf Business
June 2021

The music world's next frontier

Here’s why you should take note of the burgeoning independent Arab music scene

3 mins read
Gulf Business
June 2021

Shattering the status quo

Georges Kern, CEO of Breitling, is swimming against the tide and gaining market share for the Swiss luxury watchmaker. Here’s what he’s doing right

6 mins read
Gulf Business
June 2021

RACING FOR HYDROGEN

How gas giants are vying to stay relevant as the industry moves towards sustainable goals

4 mins read
Gulf Business
June 2021

London calling

A Dubai homegrown concept, The Maine, led by restaurateur Joey Ghazal is going international and taking its New England brasserie concept to London’s tony Mayfair district

6 mins read
Gulf Business
June 2021

Ensuring efficient SYSTEMS

Advances in UPS design can address data centre cooling challenges, says Jake Guo, Data Centre Solutions manager at Huawei ME

2 mins read
Gulf Business
June 2021

LADDER TO THE SKIES

It’s not just the view at the top that Bal Krishen, the CEO and chairman of UAE-based Century Financial enjoys, but also the journey of reaching there. In this exclusive interview, the enterprising executive reveals his stellar professional rise, where the investment market is headed, and what the future holds

9 mins read
Gulf Business
June 2021

AN ALPINE SOJOURN

Switzerland has been the bellwether and thermometer for the health of Central European tourism. It’s beginning to climb out of one of its most challenging years ever, with Switzerland Tourism CEO Martin Nydegger bullish about a strong recovery

5 mins read
Gulf Business
June 2021

CHECKING — IN —

The region’s biggest travel and tourism event, Arabian Travel Market, held a successful in-person and virtual edition last month in Dubai. And the big question predictably was – has the industry started to recover? Are travellers stepping back on airplanes and ready to explore new destinations as the industry adapts to the Covid crisis? Aarti Nagraj has more details

10 mins read
Gulf Business
June 2021

A charging bull

Stephan Winkelmann, president and CEO of Lamborghini, has laid out an ambitious roadmap for all the cars within its fleet to be hybrid models by 2024, followed by an all-new full-electric Lambo before the end of the decade. And before you ask, the V12 combustion engine will continue to breathe

5 mins read
Gulf Business
June 2021
RELATED STORIES

A Viewer's Guide to the Future of Entertainment

The pandemic has changed Hollywood. Here are five shifts that will last

10+ mins read
Bloomberg Businessweek
May 31 - June 07, 2021 (Double Issue)

AMAZON TO EXTEND PAUSE ON POLICE USE OF FACIAL RECOGNITION

Amazon said that it will extend its ban on police use of its face-recognition technology beyond the one-year pause it announced last year.

1 min read
Techlife News
Techlife News #499

AMAZON WINS EU COURT FIGHT OVER $300 MILLION TAX RULING

In the latest setback to European Union efforts to tackle corporate tax avoidance, a court on Wednesday annulled a ruling by the European Commission that a tax deal between Amazon and Luxembourg’s government amounted to illegal state support.

2 mins read
Techlife News
Techlife News #498

AMAZON BLOCKED 10 BILLION LISTINGS IN COUNTERFEIT CRACKDOWN

Amazon, which has been under pressure from shoppers, brands and lawmakers to crack down on counterfeits on its site, said Monday that it blocked more than 10 billion suspected phony listings last year before any of their offerings could be sold.

2 mins read
AppleMagazine
AppleMagazine #498

BIG TECH STOCKS FLEX MUSCLES AGAIN AFTER A ROUGH WINTER

Big Tech stocks are flexing their enormous strength again, after getting knocked around a bit earlier this year.

3 mins read
AppleMagazine
AppleMagazine #497

Amazon Unbound – Come At Me

When a gossip rag went after Jeff Bezos, he retaliated with the brutal, brilliant efficiency he used to build his business empire. From the new book Amazon Unbound , an untold story of money, sex, and power

10+ mins read
Bloomberg Businessweek
May 10, 2021

Corsair K65 RGB Mini: Hands-on with the 60 percent mechanical gaming keyboard

It’s just so small.

2 mins read
PCWorld
May 2021

Marshall Uxbridge Voice

A stylish and powerful compact speaker

2 mins read
Mac Life
Spring 2021

AMAZON BEGINS ROLLOUT OF PAY-BY-PALM AT WHOLE FOODS NEAR HQ

Amazon is rolling out pay-by-palm technology at some Whole Foods grocery stores near its headquarters to make paying quicker and more convenient.

1 min read
AppleMagazine
AppleMagazine #495 *Special Edition

How to create strong, secure passwords by learning how to crack them

It gets harder to crack a password if it’s 10 characters or longer—but complexity matters too, of course.

10 mins read
PCWorld
April 2021