Middle East witnessing a regional e-commerce boom, says Arab Advisors

Middle East witnessing a regional e-commerce boom, says Arab Advisors

recent survey conducted by Arab Advisors in Jordan has shown a significant growth in the e-commerce department, with the research firm concluding that the figures bode well for Middle Eastern e-commerce and broadband adoption.

Conducted in February, the survey showed a significant increase in the number of people purchasing items online, as well as the amount of money being spent.  24.4% of Jordanian Internet users have used e-commerce to purchase products or pay for services or bills in 2011, up from 15.4% in 2010.

The total number of e-commerce users in Jordan stood at around 514,000 in 2011, accounting for a penetration rate of only 8.2%. The amount spent saw a significant increase, going from $192m spending in 2010, to almost doubling to $370m in 2011.

Arab Advisors also conducted an identical survey in Egypt, finding similar penetration rates as Jordan, with 22.4% of Internet users using e-commerce services, whether for purchasing products or paying for services or bills online. Electronics are the most popular e-commerce products in Egypt, followed by software, airline tickets and website subscriptions, showing an interesting mix of both products and services.

The overall penetration rate of the Egyptian population is of course drastically lower, standing at 3.4%. According to Euromonitor, Egypt’s online expenditure is expected to more than triple in the next 4 years, with Egyptians spending as much as $447.3m on e-commerce in 2016. Additionally, Euromonitor predicts that by 2016, the entire region will be spending up to $2b.

The regional boom

Speaking about the Jordanian survey, Jawad J. Abbassi, Arab Advisors Founder and General Manager said, “While the Arab countries are at varying degrees of development when it comes to broadband and e-commerce adoption, a majority of the Arab markets are showing excellent growth. This bodes well for regional and global e-commerce players targeting the Arab World.”

He added, “The solid rise in e-commerce use and expenditure in Jordan between 2010 and 2011 is but one example of this regional boom.”

Sukar.com: Prepaid purchases increase three fold overall

Sukar.com, one of the Middle East’s few private shopping clubs offers prepaid payment options, and has seen usage increase by 3 and a half times since February 2011. Prepaid channels now account for 70% of all of the site’s payments, compared to 20% the same time last year.

Lebanon has seen the larget hike, increasing seven fold, followed by Jordan and Egypt, increasing five fold, the UAE increasing almost four fold, with Kuwait, Oman, Qatar, Saudi Arabia and Bahrain increasing between two and three fold.

Speaking about the shift in prepaid purchasing, Muhammad Chbib, Sukar.com’s CEO said, “The online marketplace is mirroring the offline marketplace in its acceptance of credit card and other prepaid online channels,”

He added, “People in this region preferred cash over cards for a long time but once the fear of credit card scams waned and everyday usage increased, that’s when retail really took off in this region.”

He sees online commerce heading in the same direction, “People are more comfortable using prepaid channels today and use them more often for everyday purchases ranging from cinema and concert tickets to airline and hotel bookings. There is greater customer trust in buying online today and it represents a huge opportunity for this region.”

Read next: Google Maps now lets you 'visit' famous landmarks with photo tours...using YOUR images