The Middle East has had a complicated relationship with e-commerce. Lack of accurate street addresses, a preference for face-to-face interactions, alongside consumer preferences for cash on delivery – instead of credit cards or online-payment systems – have all contributed to a relatively slow adoption of e-commerce.
"E-commerce is becoming a reality," it wrote, "reinventing consumers' path to purchase, forming new customer experiences, disrupting business models, and creating growth opportunities for large and small retailers as well as for a new generation of e-commerce pure players."
Noting that Middle East consumers, and particularly those in the Gulf states, are "among the most connected and digitally savvy in the world," a study from Bain & Google identified high levels of internet and smartphone take-up in UAE and Saudi Arabia, coupled with the eight hours 10 minutes a day that Egyptians spend online, as a strong basis for growth in the region's three biggest markets.
Firm foundations for e-commerce
Now, the coronavirus pandemic is helping to usher in a new era of e-commerce, accelerating trend lines that had already become apparent.
Over in UAE, online fashion platform Namshi even promises that, "If you are on a vacation in Dubai, staying in a Rove hotel and need to do online shopping; do not worry as Namshi is now delivering the orders within four hours at all the Rove Hotels." For everyone else, they promise next-day delivery in Abu Dhabi, Dubai and Sharjah "for orders placed before 10am".
Historically, the mall, the biggest in the world, has been open 24/7 during Ramadan. This year, instead, customers can visit a virtual version on Noon.com, "make their purchase choice online, and have the purchases delivered to their homes by noon across the UAE".
Other retailers are following suit, with many launching their own portals.
Before the COVID-19 outbreak, online groceries were already seen as an untapped market in the region. Wamda commented in 2019, that, "The e-groceries market is currently worth $200m in the [Gulf states] and Egypt, accounting for less than 1% of the e-commerce market and so there is room for rapid growth."
That's begun to change as a result of the coronavirus. As Wamda notes, "Food delivery platforms like Deliveroo, Otlob in Egypt and Careem NOW in Saudi Arabia [are] to start offering groceries on their platforms alongside their roster of meals from restaurants."
Whether the Middle East's e-commerce sector can maintain the momentum triggered by COVID-19 remains to be seen. After all, malls and markets are a key part of life for many people in the Middle East.
Moreover, as Racha Ghamlouch, chief aggregator at the Digital Digest, recently told ZDNet, many players in the region are investing heavily in retail tech. These efforts are designed to offer a more personalized, and perhaps enjoyable, in-person shopping experience.
As Ghamlouch observes, companies are exploring innovations such as robots, smart mirrors and AR apps; as well as analytic-based tech found in facial-recognition programs, and heat maps, which can track and improve store layout and flow.
The big question, then, is whether once restrictions are lifted, consumers will return to their previous habits, or if new online behaviors will have become more ingrained.
Certainly some are betting that this will be the case.
As StepFeed's Leyal Khalife, explained, "The app allows users to pick and choose groceries from different supermarkets or stores and have them delivered to their doorstep in one go."
It's likely that some customers – especially if they've had a positive experience using a technology forced on them due to shop closures and public-health concerns – will continue their online shopping habits. Having acquired a taste of e-commerce, these consumers may be more willing to do it permanently.
The continued rollout, and adoption, of 4G and 5G technologies across the region will also help, by speeding up the online process and unlocking a new series of apps and enhanced digital retail experiences.
If that's the case, Bain's prediction that e-commerce in the region would be worth $28.5bn a year by 2022 – up from $8.3bn in 2017 – with a penetration rate of 7% of total retail sales, may turn out to be an underestimate.
E-commerce's time in the Middle East may finally have come.