By Rob Corder
Arab Advisors Group suggests that with over 2 million Internet Users within the GCC, Jordan and Egypt, the time is right for e-commerce to thrive.
The Arab Advisors Group, a strategic research and consulting company specialising in new economy issues, says that the Middle East is ready for “serious e-commerce and online ventures.”The group’s conclusions are drawn from five reports: GCC E-commerce Primer, Jordan Projections Report, Jordan Internet Landscape Report, Egypt Projections Report and Egypt Internet Landscape Report, which collectively draw on research in Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain, Jordan and Egypt. Arab Advisors Group says there are currently more than 2.04 million Internet users in these eight countries. This is expected to grow to more than 3.5 million Internet users by 2002, a Cumulative Annual Growth Rate (CAGR) of 31.4%. These numbers, says Arab Advisors, represent sufficient mass for e-commerce ventures to thrive. But the group cautions against ploughing money into dot.com startups in the way that created the ultimately doomed dot.com bubble in the United States.The group says strict analysis of Internet fundamentals: solid margins and economies of scale, must be undertaken before any investment is made. “The days when every Internet based model, no matter how far fetched, was funded are gone forever,” the report warns.The report also suggests that established businesses adding an Internet-based channel to their existing sales channels will have the biggest chances for success. As such, a very lucrative market potential exists for payment and back office infrastructure providers, such as Application Service Providers (ASPs).