Online sales in the Middle East and North Africa (MENA) region is now expected to exceed $50 billion by the end of 2022, boosted by a surge in e-commerce as a result of the global coronavirus pandemic.
The figure is up from the previously estimated figure of $26 billion, due to the impact of Covid-19 on the regional retail industry, according to DeVere Forster, chief operating officer, Dubai CommerCity, the region’s first dedicated e-commerce free zone.
Speaking on Images RetailME’s latest webinar, he said: “I think it’s all because of a pandemic. You can see the change in consumer behaviour and an increase in e-commerce demand. Online sales in the entire MENA region is now expected to reach $50 billion by the end of next year. That’s nearly double the revenue that was forecast back in 2013.
“Online spending is increasing rapidly and as a result, we’re experiencing huge growth in demand.”
Dubai CommerCity is spread across a total built up area of 520,000 sq m with office spaces of 240,000 sq m and logistics units covering 54,000 sq m.
E-tail globally is a $5 trillion business. In 2019, retail e-commerce sales worldwide amounted to $3.53 trillion, and e-retail revenues are projected to grow to $6.54 trillion in 2022.
Amid the ongoing pandemic, online shopping has surged worldwide and this change in consumer behaviour has forced most retailers to shift their business models to meet the growing demand for online sales.
According to a study by Dubai Economy, the UAE is currently the most advanced e-commerce market in the Middle East and North Africa, with an estimated annual growth of 23 percent between 2018 and 2022.
Further research conducted by Zebra Technologies at the beginning of this year showed that online or in-store shoppers leverage both channels for the same reasons – product availability, product selection and price.
Hozefa Saylawala, director of sales, Zebra Technologies, said: “We have been living in interesting times, and I think last year the indication was about the rapid changes in the retail landscape. But all the changes are around the way our customer shops and the way our customer behaves. We have seen the emergence of e-commerce. We have seen a surge online. But what is constant is the changing behaviour of the customer.
“The research by Zebra shows that 76 percent (of customers) want to get in and out of stores quickly, 76 percent prefer retailers that offer easy returns, and 65 percent prefer shopping with online retailers that also have brick-and-mortar locations. And all of these have to be enabled and fast-tracked with the help of technologies.”
When asked about the changes in the retail industry observed pre and post Covid-19, Khaled Soliman, group CEO of Dubai-based Jashanmal Group, told the webinar: “Covid-19 has enforced two types of changes. First, our internal changes within the organisation itself and second, the changes in the market – the customer. Internally, there’s a whole culture that needed to shift. And we became much more digitally dependent on things like technology, speed, efficiency, effective communication, resilience, agility, emotional intelligence and communications.
“All these became crucial elements to embrace within your organisation, a culture which it was not prepared to accept. So companies needed to undergo massive change.
“For external changes, shopping used to be a pleasant experience before – a form of entertainment. Now, post-Covid, a customer will only go to a store and shop if they really need something.”
Another trend being played out in the sector is a new type of categorisation – the home versus non-home product categories.
Atul Bhatia, CFO, Splash, part of the Dubai-based Landmark Group, said: “We have a solid offering for lounge wears and what you wear at home. After talking to our customers about it, we started using many new technologies in our garments to make them biodegradable. It made us realise the renewed focus on the importance of some of these trends.
“Another obvious trend is the customer’s migration towards more digital purchases, which has evolved into merging of the physical and digital spaces. Today, when you see people shopping in the stores, you will see many people using apps in there. In most cases, they’re comparing prices so they keep the apps open in front of them. So, even in the physical retail world, digital is playing a major role.”
Nick Vinckier, head of growth, Faces, part of the Chalhoub Group, told the webinar: “Trust is super important. You look online or offline; we want to add value to a person’s life. On the one hand, you have availability; you need to have the product. On the other hand, there’s transparency or information. So, we (retailers) need to make sure that you offer that to the customer. Number three, you see a need for convenience. For us, it was super important to nail these three domains.”
Zebra’s Saylawala added: “What we are seeing is a change in focus. Customers are demanding a contactless, frictionless, seamless experience inside the stores. A recent study showed that the customers want to walk in quickly and don’t want to get caught up in the queues. So, it’s about self-scanning technologies. How soon can I conclude my payment through the contactless method? How you can provide me with the information?”
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