On the back of strong online shopping, the e-commerce market in Oman is set for further growth in the coming years.
According to a report, Oman’s online market, which was valued at $2.19 billion in 2020, is expected to reach $6.52 billion by 2026, registering a compound annual growth rate (CAGR) of 20.1 per cent during the period between 2021 and 2026.
Major drivers of e-commerce growth in the Sultanate are high spending potential, developed transport logistics networks, rising internet penetration levels and a growing tech-savvy youth population.
“The overall economic growth of this country is expected to drive the e-commerce market. The different initiatives of the Oman government are fuelling the growth of this market,” says the report based on a study by ResearchAndMarkets.com.
The main objective of these initiatives, says the report, are to unravel the future change of governance, transportation, logistics, commerce, which can infuse digital transformation into the economy.
According to the National Centre for Statistics and Information (NCSI), the total fixed Internet subscriptions in Oman rose 6.9 per cent to touch 506,091 at the end of November 2020 compared to the same period of 2019.
The number of active mobile broadband subscribers rose 12.1 per cent to 5.31 million at the end of November 2020 compared to the same period of 2019.
According to the report by the global market researcher, the major restraint of this market is the changing mindset of the consumers.
”Most of the consumers preferred to buy directly from the retail shops due to the high security of payments in offline payments”, it points out.
The Sultanate is coming very close to 100 per cent smartphone use penetration; the country has high mobile broadband penetration, and its 4G coverage also reaches a high level, the report says.
According to a survey conducted by the NCSI, the most important indicator of access to information and communication technologies in Oman is possession of smart phones, which reached 95 per cent.
This is in addition to household access to the Internet, which reached 94 per cent, while household possession to computers including smart phones reached 96 per cent
In recent years, Oman has made great efforts to build up its IT infrastructure both at governmental and private levels.
The growing adoption of 4G and 5G technology is also driving the growth of this market.
For instance, points out the report, the Oman Telecommunication company planned to set up 2226 5G sites by 2024, which will increase the internet consumption rate for this country.
However, spending on telecom services and devices is decreasing due to the large-scale job losses due to the ongoing Covid-19 pandemic. This decreasing trend of consumer spending can create a considerable barrier for this market. Major vendors in this market are also innovating their services to cater to this untapped market.
In terms of market share, affirms the report, some of the major players currently dominate the market. However, with technological advancements, data analytics, web design, creative programming, digital marketing, cataloging and app development, and product innovations, major companies are gaining a competitive advantage and increasing their market presence by securing new contracts and tapping into new markets.