E-commerce trends in the GCC and MENA

The Covid-19 pandemic has had a profound impact on many aspects of our lives, including the way we shop. With lockdowns and social distancing measures in place, consumers turned to online shopping in record numbers. As a result, the e-commerce industry saw a significant surge in sales during the pandemic.

However, as vaccination rates increase and restrictions are lifted, the e-commerce numbers are beginning to normalize. The initial surge in online shopping was largely due to the pandemic-related restrictions and the shift in consumer behavior. As the world slowly returns to normal, consumers are gradually resuming their pre-pandemic shopping habits, which include a mix of both online and in-person purchases.

Despite the downward adjustment, e-commerce and online shopping remains the preferred mode of purchasing for a large number of consumers. The MENA and GCC regions are no exception to this trend, with e-commerce experiencing significant growth in these areas. According to the DIGITAL 2023 Global Overview Report, over 57% of global internet users made online purchases in 2022, indicating a significant shift in consumer behaviour and preferences toward online shopping.

In the GCC region, the size of the e-commerce market is projected to reach 50 billion USD by 2025, up from 29 billion in 2022, according to research conducted by Statista in July 2022. This growth is driven by factors such as increasing internet penetration, rising consumer demand, and government support for e-commerce.

"Recognising that small businesses in Oman face difficulties scaling up and the challenges I faced when I opened my own business made me interested in creating a platform to help businesses like mine get into e-commerce. I wanted to develop a platform that has the potential to help other entrepreneurs and small businesses and make it easy for anyone to start and run an online store. With e-commerce being a dominant force in all of commerce in the GCC, this leaves us with a lot of opportunities." said Maha Albalushi, the Founder of Wensah.

In the wider MENA region is projected to be valued at $69.5 billion by 2023. The use of mobile commerce or m-commerce is a major driver of this growth, with mobile penetration in the region expected to reach 89% by 2023. As per Arab News, more and more consumers are turning to their smartphones for shopping and purchasing products and services.

The use of artificial intelligence (AI) in marketing is also expected to contribute to the growth of e-commerce in the MENA region. A study by the Arab Marketing Association found that the use of AI in marketing is expected to grow by over 30% annually in the region over the next five years.

Social media platforms like Facebook and Instagram are also becoming popular options for businesses to sell their products directly to consumers in the MENA region. Social commerce is projected to account for nearly 20% of e-commerce sales in MENA by 2023, according to a report by the National Retail Federation.

The emergence of new digital marketing channels and technologies, such as m-commerce, AI, and social commerce, is expected to drive continued growth and innovation in the industry. With government support and the development of e-commerce platforms, small businesses and entrepreneurs have numerous opportunities to expand their operations in the region.