One of the things we enjoy most at Cashback Industry News is taking a look at developing e-commerce markets. Today, we look at the Middle East and North Africa region and the companies and innovations that are bringing e-commerce to this quickly growing marketplace. A Payfort report says e-commerce grew by 23% with the UAE representing the largest growth, followed by Saudi Arabia and Egypt. Payfort says online payments in the Arab world could reach $69 billion by 2020. Dubai-based Souq.com is the region’s biggest online retailer with 1.5 million products and more than 45 million monthly unique website visitors, plans an IPO within 18 months.
Dubai luxury retailer, the Chalhoub Group saw sales drop 2% in the first four months of 2016 at its 600 outlets across 14 countries. Deena Aljuhani Abdulaziz plans to shutter her iconic Saudi luxury fashion retail store and relaunch D’NA as an e-commerce site. Turkey launched TROY – a new online card payment system with a goal to be a cashless society by 2023. PayPal suspended operations in Turkey following the Turkish government failure to renew the companies license. It said the closure will impact tens of thousands of online businesses and hundreds of thousands of consumers.
Uber raised $3.5 billion from Saudi Arabia’s Sovereign Wealth Fund and gained a valuable regional partner. A new report by yStats.com says the Middle East market is one of the fastest growing with high internet penetration rates of over 90% in countries such as Qatar, Bahrain and the UAE. In Morocco, the average online e-cart of a consumer is about MAD 709 (USD $73) Lahcen Haddad, Morocco’s Minister of Tourism said. Dubai headquartered Silsal Design House now sells more than 50% of its ceramic line by e-commerce to the US.
UAE moves online: Internet transactions top $10bn and set to nearly triple by Expo 2020
Despite people turning to the internet to spend more than US$10 billion last year in the UAE, businesses and consumers battle structural and technological constraints.
A report released yesterday by Payfort, the online payment provider, said that regional e-commerce grew by 23 per cent, with the UAE representing the largest growth market, followed by Saudi Arabia and Egypt.
Payfort’s research focused on seven Arab countries: the UAE, Saudi Arabia, Egypt, Kuwait, Lebanon, Jordan and Qatar. It says Expo 2020 will drive growth in UAE’s online transactions, which are set to nearly triple to $27.13bn over four years. Via thenational.ae
Regional online payments on track to top $69bn
The region saw a 23 per cent increase in online payments during 2015, led by strong growth in Saudi Arabia and the United Arab Emirates, showing 40 per cent and 24 per cent year-on-year growth respectively, added the “State of Payments in the Arab World” report from Payfort, the leading online payment service provider in the Arab world.
Focusing on the seven key markets which Payfort operates in (Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia and the UAE), the report tracks online payment transactions in the airline, travel, ecommerce (online shopping) and entertainment sectors. Via tradearabia.com
Souq.com planning IPO in the next 18 to 24 months | The National
Souq received US$275 million in a second round of funding in February from New York-based Tiger Global Management and South Africa’s Naspers to underpin its technology and expand its product line. The online retailer had raised $150m in venture funds in June last year.
It sells 60 per cent of its own inventory on the site but also acts as a market place for third-party sellers, allowing SMEs and companies to use it as a springboard into the online space.
E-commerce has slowly gained traction regionally as more companies allow customers to buy online and pick up in the shop. Souq.com lays claim to 45 million unique visitors to its site every month with the Middle East’s e-commerce market forecast to reach $20 billion this year. Most of its growth is from Saudi Arabia, where Souq now has 10 fulfilment centres, and the UAE, but Egypt is becoming an important market. Via thenational.ae
Level Shoe District owner Chalhoub reports first quarter loss
Dubai luxury retailer, the Chalhoub Group, on Wednesday said that the slowdown had affected sales in the Mena region. It claims the group’s sales from the start of the year until the end of April were down 2 per cent compared with the same period.
Chalhoub runs over 600 outlets across 14 countries in the Mena region – running the Level Shoe District in Dubai Mall and Tryano concept store in Yas Mall along with a host of other stand-alone brands.
While the group has seen falling sales at a variety of outlets as the low oil price, the strong dollar and the fall in high-spending visitors from Russia and China played a part in changing consumer sentiment negatively, the group’s chief executive believes this year will finish 6 per cent up on last year. Via thenational.ae
Saudi’s Deena Abdulaziz Relaunches D’NA Boutique Online
Deena Aljuhani Abdulaziz re-imagines the Gulf’s luxury retail landscape with a bold move to shutter her iconic store and launch into the e-commerce stratosphere.
On a snowy New York evening in February, Deena Aljuhani Abdulaziz quietly slipped out of a dinner party hosted in honour of Jean-Paul Goude and Carine Roitfeld. Gliding down the sidewalk in a floor length mustard yellow evening gown by The Row, she quickly spots her waiting car and climbs into its back seat.
“It’s been a long day and I’ve only been in New York for less than 24 hours,” says the Saudi retailer, pulling out her two phones to catch up on emails from her team in Riyadh. Since launching D’NA, her iconic members-only store nearly a decade ago, with locations in Riyadh and Doha, Deena has become a serious player within the industry. A regular front row fixture during fashion week, she has carved out a niche for D’NA as an independent fashion voice in the Middle East and beyond, earning her a place on the Business of Fashion’s list of top 500 individuals shaping the global fashion industry. Via harpersbazaararabia.com
Turkey launches new card payment system, TROY
Turkey has introduced its own card payment system, called TROY, and the nation is setting its sights on becoming a cashless society by 2023.
Speaking at the launch, Dr Soner Canko, general manager of the Interbank Card Center (BKM) in Turkey, said: “Many countries around the world, from Canada and Italy to South Korea and India, have their own payment systems and now Turkey has taken its place among them.”
TROY has completed its first transaction and Canko says all POS terminals, ATMs and e-commerce websites in Turkey are ready for the cards and further transactions. Via bankingtech.com
PayPal to halt operations in Turkey after losing license, impacts ‘hundreds of thousands’
Turkey has been making moves to bring tech business in the country under more localised control, and today big U.S. online payments company PayPal became the latest casualty. The company announced that it is suspending business operations in Turkey effective June 6, after failing to obtain a new license for its services.
The closure, PayPal told TechCrunch, will affect tens of thousands of businesses and hundreds of thousands of consumers.
A spokesperson confirmed the closure and also the reason behind it in two separate statements to TechCrunch.
The first statement closely follows the message in Turkish on PayPal’s local site regarding the denial of a license from the financial regulator BDDK. Via techcrunch.com
Uber raises $3.5b from Saudi Arabia’s sovereign wealth fund
Uber has raised $3.5 billion from Saudi Arabia’s sovereign wealth fund, the U.S. ride-hailing service said on Wednesday, gaining a crucial partner in its expansion into the Middle East.
The investment from the Saudi Arabian Public Investment Fund was part of Uber’s most recent financing round that valued the company at $62.5 billion, Uber said, making it the most highly valued venture capital-backed company in the world.
In a written statement, Uber co-founder and Chief Executive Officer Travis Kalanick called the investment a “vote of confidence in our business.” As part of the investment, a managing director at the Saudi fund, Yasir Al Rumayyan, will take a seat on Uber’s board, the company said. Other board members include Benchmark Capital general partner Bill Gurley and Huffington Post co-founder Arianna Huffington. Uber said the Saudi’s investment puts the company’s total balance sheet, including cash and debt, at more than $11 billion. Via dealstreetasia.com
Middle East B2C E-Commerce Market 2016
The new report by yStats.com reveals that although the Middle East is the smallest of the global regions by count of Internet users, over the past years, its online audience has been one of the fastest growing. IT infrastructure is developing rapidly across the region, resulting in high Internet penetration rates of over 90% in countries such as Qatar, Bahrain and the UAE. As more consumers gain access to the Internet and begin to appreciate the convenience of online purchases, online shopper penetration rates across the region are also growing, with Israel boasting the highest rate of all.
As trust in buying online increases, customers in the Middle East turn to E-Commerce websites not only for online travel bookings, but also for physical product purchases. The research findings contained in the yStats.com report reveal that consumer electronics are especially gaining popularity among online shoppers in the Middle East. In countries such as Kuwait the average online transaction value is on a decrease as shoppers gain confidence in online shopping and make more, smaller-value purchases. On the other hand online shoppers in the Middle East remain cautious when it comes to paying for their purchases. As a result, the leading E-Commerce companies operating in this region, such as UAE-based Souq.com, have to cope with the need to offer cash on delivery.
While the United Arab Emirates and Saudi Arabia remain some of the largest markets in the Middle East in terms of online retail market size, other countries should not be overlooked, as yStats.com report indicates. For example, Jordan has launched multiple successful E-Commerce projects, such as online clothing retailer MarkaVIP. Qatar ranked among the top 5 emerging economies worldwide in B2C E-Commerce index; and governments in Oman and Bahrain undertake multiple initiatives to support online commerce development in their countries. Moreover, following the cancelation of sanctions, Iran has a high potential to come to the forefront of B2C E-Commerce in the region, with its large population, rising Internet connectivity and high levels of debit card ownership. Via ystats.com
Lahcen Haddad: Moroccan E-Commerce Websites Earned MAD 24.09 Billion in 2014
Lahcen Haddad, Morocco’s Minister of Tourism, spoke at a conference on “Global Economic Mutations and Growth Perspectives” on Thursday May 26, hosted by the Rotary Club in Casablanca.
Haddad underlined the importance of digital media as a “vector for job opportunities” and suggested that the use of digital technologies and mass communication outlets will enable economic growth.
Globally, E-commerce is predicted to contribute 50% to global GDP by 2025. Haddad said that a “digital revolution” is imminent, as the evolution of E-commerce in Morocco is particularly promising.
In Morocco, the average online e-cart of a consumer is about MAD 709, close to that of an American online consumer’s average e-cart which amounts to approximately USD $73. Various facets of E-commerce are appealing to Moroccan internet users, such as its rapid service, large number of choices in products, and the possibility of easily comparing prices. Via moroccoworldnews.com
Plated in Dubai
The “Made in Dubai” brand is about to take part at a pop-up store in Bloomingdale’s Dubai – only three brands have been selected to be a part of this exclusive programme, with Silsal being one of them. But that isn’t its only accomplishment of late; the brand, currently available at O’de Rose and Galeries Lafayette, has previously been exhibited at the British Museum and sold at the Louvre in Paris. Moreover, Silsal will be participating at the NOW exhibition in New York come August – the first Middle-Eastern brand to do so. In September, it will be a part of Maison&Objet, the world’s best-known design trade fair.
All this from a company that started its journey in 1989, in a basement in Amman. Sibling duo Rula and Reem Atalla opened the small design business at that time with the aim to draw attention to Jordan’s rich craftsmanship in ceramics. They combined utility with style, with many of the motifs used to decorate the ceramics having a Middle Eastern touch. Playing with calligraphy and mosaic patterns, their products became known as the perfect gifting item with the city’s style set. When the Atalla sisters decided they had taken the business as far as they could, Reem Atalla’s daughter Samar Habayeb decided to step in. For the last couple of years she has been CEO of Silsal Design House with Maya Salameh as creative director. And as a trained architect, Samar has had the vision to scale up the business.
Today, Silsal is a Dubai-based company, with offices at the Dubai Design District and its own e-commerce presence. And with their online business receiving 50 per cent of its orders from the US, it seems they are already on the path to making Silsal truly international. Via khaleejtimes.com
Global news you can use
This was a busy week of e-commerce retail and business around the globe. We’ll be back again Monday morning with more global news you can use. Enjoy your weekend.