Germany-based desk research firm yStats.com’s new publication, “Middle East B2C E-Commerce and Payment Market 2020 & COVID-19’S Impact” recounts the progress made in recent months in the advancing online retail activity in this region, including details on the effects of the ongoing pandemic. Yücel Yelken, yStats.com founder and CEO comments that “the initial boost to the use of digital payment methods due to the health crisis will likely be sustained long term.”
E-Commerce sales escalate in the Middle East
Online retail is a developing industry in the Middle East region with the UAE, Saudi Arabia and Bahrain having the highest online share of total retail sales in the region, as of 2019. However, these countries lagged behind other mature markets around the globe such as China, the UK and the USA. The growth of E-Commerce sales has accelerated due to the COVID-19 pandemic, especially in the larger economies of the region such as Saudi Arabia and the UAE, where annual increases were in double digit percentages, as shown on charts in the detailed new yStats.com report. The growth is further expected to advance due to the increasing share of online shoppers in the Middle East as a result of the COVID-19 confinement measures. The report further provides details on the high share of consumers shopping online during the pandemic in Israel as well as on Jordanian consumers who purchased more products online than they would have normally bought in-store.
Online retailers in the Middle East see growth in sales during the health crisis
Significant growth in online activity has been seen by online retail businesses in the Middle East during the health crisis. After the COVID-19 outbreak, Noon in the UAE collaborated with Dubai Mall to launch its virtual marketplace, allowing mall retailers to have their products fulfilled by Noon.com. Online order value doubled for grocery retailer Bin Dawood Holding, and its average sales and app installations accelerated by triple-digit growth rates. Another local grocery app, Nana Direct, received high numbers of online orders and sales. The yStats.com publication reports that Amazon, one of the top E-Commerce market players in the Saudi Arabia, launched its website in the Kingdom, replacing previously acquired Souq.com amidst the pandemic. Furthermore, in the UAE, the E-Commerce sector received the highest number of permits issued to any retail business.
Increased use of digital payment methods stimulated by the COVID-19 pandemic is here to stay, even after the health crisis.
Since the outbreak of the COVID-19 virus, a higher share of shoppers has started switching to digital payment methods in the Middle East. According to studies, a double-digit percentage of consumers were using digital banking services in Israel during the COVID-19 pandemic. Additionally, Jordan saw a growth spurt in the use of e-wallets, as a striking number were registered in 2020, as well as a notable percentage increase in digital financial inclusion. Furthermore, more than half of digital payment users in the UAE preferred using contactless cards to pay in-store. Another important study cited by yStats.com mentions that a large quota of shoppers in the UAE plan to continue the use of contactless payments even after the pandemic is over.