The Middle East e-commerce market is small but growing quickly. We’ve got news highlights and insight to help you gain a perspective on this fast-developing market. Wamda.com reports e-commerce in the Middle East reached $39 billion in 2015 and expect $45 billion in 2016. Dubai-based Wadi.com raised $67 million in new capital for market expansion in the Middle East. The partnership includes Rocket Internet Group, South African telecom MTN and already offers 150,000 products from 2,000 brands.
The global Muslim e-commerce market is estimated at $100 billion with 1.6 billion consumers from the Middle East to SE Asia. New companies like Zilzar, Souk, Irhal and Modanisa are working to develop the unique needs of this market for halal products. New food and restaurant app Grabbd launched in 2016 aimed at MENA millennials. Souq.com CEO Ronaldo Mouchawar predicts another year of strong growth for his company and a continued market boom.
Talk about an e-commerce challenge? Imagine collecting cash on delivery in the UAE where more than one-third of items are refused according to Souq’s Indraneel Jain. Pakistan’s Zameen.com launched in 2006 to serve the growing online real estate market and now has more than 500 staff. New Jordanian startup Camelship handles e-commerce deliveries throughout UAE.
Is ecommerce MENA’s biggest digital market?
So as ecommerce grows, so do the associated business streams such as digital advertising, social media, and payment gateways; as we see below, they are all beginning to boom in the Middle East. Via wamda.com
Wadi.com Raises $67M For ME eCommerce Expansion
A new round of funding is poised to strengthen an eCommerce platform’s presence in the Middle East. Business Standard reports that Dubai-based Wadi.com has raised $67 million in a Series A round led by Al Tayyar Travel Group, which will go towards increasing the online marketplace’s staff in India, expanding its availability to consumers in the Middle East and building out the platform’s technology.
Ankit Wadhwa, who founded Wadi.com last year with Pratik Gupta and Kanwal Sarfaraz, told Press Trust of India (PTI): “This is the largest series A funding in the tech history of Middle East and will further accelerate our growth. Wadi.com is currently active in UAE and Saudi Arabia and is expanding soon to other countries, like Oman, Qatar, Kuwait and Bahrain.”
Wadhwa additionally told the outlet — which notes that Wadi.com is a joint venture, facilitated by the Middle East Internet Group (MEIG), between Germany’s Rocket Internet and South African telecommunications provider MTN — that the platform has attained the number three spot in the general merchandise marketplace category by revenue in the Cooperation Council for the Arab States of the Gulf (GCC) region in 10 months’ time. It currently offers more than 150,000 products from over 2,000 brands, including Apple, Samsung, Lacoste and Hugo Boss. Via pymnts.com
New E-Commerce Sites Specialize in Halal Products for Muslims
An upsurge of new e-commerce firms are jostling to capitalize on the growing numbers of middle class Muslims who are now spending more than $100 billion a year shopping online. From travel to fashion, many of the world’s 1.6 billion Muslims want more choices as their incomes grow, but also need to be sure that what they buy is halal, or religiously permissible according to Islamic guidelines.
Enter start-ups such as Malaysia-based Zilzar. The company, which launched in late 2014, says that Amazon.com and other shopping sites have left this market mostly untouched. Zilzar believes it can attract more Muslims to its site as it works with various agencies to select and have only those halal certified merchants and products listed on their online store. To non-Muslims it isn’t necessarily clear what’s halal and what’s not. Typically it’s known that pork and alcohol consumption are prohibited in Islam. But it can also include cosmetics and vitamin supplements, which can contain both animal gelatin and alcohol. Via blogs.wsj.com
Samih Toukan talks new Grabbd app and Jabbars direction in 2016
Mobile apps focused on food and drinks seem to be popping up faster than American fast food chain restaurants in emerging markets. In early January 2016, Grabbd became one of the latest food and drink apps to launch out of MENA, and its developers are looking to stir up a crowded market by fusing three things smartphone worshipping millennials love —food, lists, and travelling.
Grabbd allows users to browse through lists of restaurants, cafes and bars and bookmark—or ‘grab’—the ones that interest them. The app then organizes them into personalized lists based on location. Through a social feed, Grabbd users can compare their picks with lists made by friends who are also on the app. Via wamda.com
Predictions 2016: Souq.com CEO and co-founder Ronaldo Mouchawar
Over the past 10 years, Souq.com has gone from strength to strength – paving the way for e-commerce to thrive and for local, and international, businesses to flourish in this region.
Looking back we have an exciting story to tell and each year has been ever more significant. Last year was remarkable for many reasons. We grew the number of online transactions, built and broadened our brand partnerships and product portfolio, grew our m-commerce offering and improved our online platform through a rebranding of the site and strengthened partnerships.
These are all just the tip of the iceberg and we have bigger plans for 2016. The Middle East is still the fastest growing e-commerce market and Souq.com is also still growing faster than the industry average. And why is that? Well, high gross domestic product per capita, robust mobile penetration rates, a younger population and ease of buying are some of the key factors fuelling a boom in online sales in the United Arab Emirates. Via gulfbusiness.com
UAE shoppers prefer cash-on-delivery for online purchases
However, more than a third of the online shoppers who choose cash-on-delivery don’t honour the transaction when their parcel arrives on the doorstep, often for trivial reasons. “Sixty per cent of our customers pay cash on delivery – I’d say about one in every three people change their minds at the doorstep,” Indraneel Jain, regional director at souq.com, 7days.ae reports. Via thepaypers.com
Pakistan’s Startup Culture No Less Than Silicon Valley
Founded in 2006 by Zeeshan Ali Khan and his brother after leaving an e-commerce business in the U.K., Zameen, just like many famous U.S. internet companies, was founded first in their bedrooms. Despite the online buy-sell culture being extremely limited back then, Ali Khan followed the money coming into the real estate business in Pakistan from the outside, the U.K. specially.
Currently, the company employs 500 people, and has offices in all major cities in the country. “Zameen.com came into being when we realized there was a desperate need for a trustworthy online real estate enterprise in Pakistan, especially given the importance the average Pakistani attaches to property,” Ali Khan told Newsweek.
“Back then the state of internet infrastructure in Pakistan was extremely poor but the offline property market was exploding. Facilitated by large investments from the Pakistani diaspora, people found that investing in real estate would earn them significant returns.” Via inquisitr.com
Enabling ecommerce with delivery
Ecommerce is constantly evolving and becoming more advanced, but shipping is hindering its progress. It’s one of the biggest problems in ecommerce, especially for social sellers and SMEs who can’t get cheaper rates from couriers, an issue born out of the fact that they don’t have corporate accounts which requires getting a trade license.
Jordanian entrepreneurs Fares Nimri and Sari Issa were very much aware of the gap between ecommerce platforms and couriers when they decided to launch CamelShip in August 2015 as a shipment solution for the ecommerce sector in the UAE. Via wamda.com
Despite the regional challenges, the Middle East e-commerce market is poised to grow in double digits.