Ramadan is a period that usually drives high levels of consumer activity in the Middle East. Businesses this year are already expecting a surge in consumer spending, and across nearly all retail categories.
Although most physical stores are now reopened and back to full capacity, consumer behavior has fundamentally shifted in recent years, with digital commerce now essential for merchants to meet consumers where they really are. Among the biggest beneficiaries of this growth in the digital economy are the food delivery, grocery, and household goods sectors.
The opportunity for these merchants is substantial. Last year, 3 in 4 consumers (76 percent) in the UAE and Saudi Arabia alone said that they anticipated purchasing products and services online more frequently during Ramadan. That trend is only expected to continue, as approximately 83 percent of consumers in the region say that they’ll maintain or even increase their level of e-commerce spending from 2021 into 2022.
Amidst this growth in digital commerce, local merchants can best prepare for the Ramadan season ahead by keeping a few key strategies in mind.
Remember to offer local payment methods
While business ambitions may be global, payment habits remain strongly local. Just as you translate your website into local languages, ensure you offer a full range of popular local payment methods in each country where you trade. And remember to accept payments in the correct local currencies. In KSA, for example, mada cards have seen exponential growth in online sales. Businesses with local entities should ensure they are configured to accept mada locally or via the Visa/Mastercard networks for those selling into KSA.
But also think globally
Approximately 85 percent of consumers in the region have made online purchases from brands and retailers outside of their home country in 2021, with a third (33 percent) citing cross-border shopping as their number one reason for shopping online. This presents a phenomenal opportunity for global and domestic merchants to expand their businesses across MENA by offering both international payment channels and popular local payment methods.
Consider buy now, pay later options
Buy now pay later (BNPL) methods like Tamara are booming in the region today. We estimate that up to 53 percent of consumers in MENA could be BNPL users in 2022. Offering BNPL can increase conversion rates and drive a significant uptick in average order value for online sellers.
Demonstrate safety and security
Some 62 percent of consumers surveyed in a recent PwC retail report of the Middle East said they were concerned about having their personal information compromised. Merchants need to ensure they invest in security and select partners with robust security frameworks. Adding security and verification logos, like those from Visa and Mastercard, on payment pages where users enter personal information also enhances trust.
Lean on your payments provider
Your payments provider should be able to help you optimise your payment performance. That includes benchmarking your acceptance, authorisation, decline rates against the market. Your provider should also suggest strategies to deliver more successful sales, and ensure that your risk settings match your risk appetite and customer spending habits.
This happens when your payments provider is plugged into the broader ecosystem locally, harnessing relationships with the schemes, issuers, and regulators to solve your issues quickly and make the process as seamless for you as possible.
Mohammed Ali Yusuf, Regional Manager for MENAP at Checkout.com.
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