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Retail therapy
The Gulf's shopping mall culture has kept retailers from looking to the web to boost sales, but a surge in Saudi Arabian broadband usage over the next three years could change that.
Jarir Bookstore, the Saudi Arabian bookstore chain that is also the country's largest seller of laptops, has an impressive website. There's a form for prospective employees to fill out, a section with the latest discount deals and information about virtually every product the company has to offer, including 18 different types of pencil sharpeners.
One catch: you can't actually buy anything unless you're headed down to your local branch.
Jarir is still doing better than most. Many of the firm's competitors have no online presence at all, and even when they do, prices are only updated sporadically. While the Middle East may be home to some of the world's keenest and most discerning shoppers, they're splashing the cash in-store and not on the internet.
However, that could be about to change as analysts predict that a huge increase in broadband usage in the region's biggest economy, Saudi Arabia, will prompt a new era of online shopping in the Gulf.
"Go to the website of any of the big luxury car dealers in Dubai, and go to the used cars section, for example," says Laurent-Patrick Gally, a retail analyst at SHUAA Capital in Dubai. "I'll bet that none of the used cars you can see displayed on the website have been changed for the last five months."
Elsewhere it's a very different picture. Research suggests 17 pence of each pound spent in the UK in the first half of the year was spent online.
According to the IMRG Capgemini e-Retail Sales Index, UK shoppers spent over $50.9bn on the internet in the period - up 38% from $36.9bn in the first half of 2007 - despite consumers being squeezed by rising mortgage costs, falling property prices and soaring energy costs.
Sales of clothing saw the biggest gain, totaling $3.38bn in the first half, as shoppers tried to reign in spending by finding the best deals on the web.
British shoppers are Europe's biggest online spenders by far. Two of the key drivers behind their love for the net have been their long workday compared with the rest of Europe, and the relative ease with which they can get a credit card.
Both factors would appear to apply to the Gulf as well, but at SHUAA Capital Gally doesn't see the Middle East experience mirroring the UK anytime soon.
"Think about the opening hours of shopping centres in the UAE, and the same in Saudi Arabia," he says. "In certain periods of the year you can shop until 2 o'clock in the morning."
And whereas UK retailers now attend workshops on what to do with all their bricks-and-mortar stores, as more and more of their revenue shifts online, Gulf malls have managed to become a destination in themselves.
"In terms of shopping, the malls are a much more important part of the culture here than they would be in other parts of the world. They are almost the centre for every part of entertainment," says Michael Hughes, executive director of strategy at branding firm The Brand Union. "In Saudi Arabia, it's sometimes the only place people can go."
However, the third big driver of online sales, broadband penetration, is about to change dramatically in the region.
Investment bank EFG Hermes said in July that broadband usage in Saudi Arabia could see a 16-fold increase over the next three years as new operators enter the market.
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