E-commerce in the Mena region has settled into a stable, high-growth era, with 91% of respondents of a survey regularly shopping online.
Data from leading global payment solutions provider Checkout.com’s report: Digital Transformation in Mena 2022, proves that the e-commerce trends accelerated by the pandemic are here to stay. The report surveyed over 15,500 shoppers across the Middle East and North Africa.
In the past three years ecommerce has grown faster in the Mena region than anywhere else in the world, with an estimated 209 million consumers transitioning to online shopping during the height of the pandemic.
Now, with the pandemic’s lockdowns over, the number of ecommerce shoppers in Mena only continues to grow. According to the report, 91% of respondents said they regularly shop online, up from 87% in 2021. Further, more than half (52%) of Mena residents said they shopped more frequently this year, up from 47% in 2021.
On a more local level, looking at the GCC, we see that 9% of consumers are spending money online at least once per day, which is a 50% increase in the past 12 months.
These positive trends are set to continue, with 88% of respondents across Mena saying they will increase their online purchases over the next year.
In parallel, as the regional economy thrives, and the pandemic recedes, we see an increase in consumers spending money online within categories such as travel and tourism, events and entertainment, however, with a total of 45% prepared food remains the number one category customers spend their money online on.
Digital payments surge
Consumer appetite for digital payments continues to rise, maintaining 2021 trends. The report shows that 70% of consumers across Mena prefer to use a digital payment method - up from 60% in 2021 and 40% in 2020, representing a 75% increase in 24 months. The figure is even higher in the GCC region, which has a much higher digital penetration, with 80% of GCC consumers now favoring digital payment methods.
These results mirror the sharp rise in payment apps and digital wallets in the region, where 82% of consumers in Mena report using some form of fintech app in 2022, up from 76% in 2021. In fact, across the entire region we see a continued uptick in the adoption of digital wallets as the go-to payment method with a 6 percentage point increase in 24 months. In particular countries such as Egypt, Qatar and Saudi have seen a near doubling in the popularity of digital wallets. Conversely, the use of Cash on Delivery (CoD) has declined precipitously in Mena, with a nearly 40% drop in the past 24 months.
Sophisticated consumer base
The increased sophistication of the regional e-commerce landscape is seen in the continued appeal of Buy Now Pay Later (BNPL) options and sCommerce (social commerce). Nearly half of consumers in the UAE and Saudi Arabia used BNPL this year. Across Mena, 39% of consumers have used a BNPL option in 2022, up from 24% of consumers in 2021, representing 64% YoY growth.
A further 28% of consumers who have not used BNPL hope to use it in the next 12 months, meaning as many as 67% of consumers in Mena may use the method in 2023. Perhaps even more strikingly, is to see that the penetration of BNPL is higher in Mena compared with the US and Europe.
With the ever-increasing average time people spend on social media per day, it is not surprising that a fifth of consumers in Mena say they now frequently shop via social media channels (sCommerce), representing a 43% growth in the past 24 months. Meanwhile, the appetite for social commerce has more than double in KSA and the UAE.
Remo Giovanni Abbondandolo, Vice President for Mena at Checkout.com, said: "The report validates our conclusions from last year – that the region's eCommerce and digital payment ecosystem is growing rapidly. The combination of a digitally savvy population and a mature retail sector will ensure these gains are sustained in the long run.
“Additionally, the growing trust in online payments by regional shoppers means the digital transformation of the region's retail sector is well under way. This is underlined by the emergence of Web3 as a key component of the online experience, with shoppers showing a significant appetite for transacting on-chain, and a desire both to be paid and to pay in digital currencies."
As seen in the report, fintech and digital payments adoption continues to soar across the region. Merchants are racing to keep up and as they do so, they continue to innovate and diversify the consumer offering.
Consumers, of course, are quick to respond and the competitive landscape sharpens as the benchmark for consumer expectations continues to climb.
Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).