The robust growth of the e-commerce industry in 2020 accelerated the digital transformation, both for consumers and e-commerce industry players, and ‘new normal’ became the life-style for most consumers. A rise in e-commerce startups too was witnessed as more and more people started adopting contactless payment options. The trend certainly gave a big boost to fintech and e-commerce across key sectors in the UAE economy. The spurt in players led to a competitive market which will throw a challenge to every e-commerce player to retain their consumers, your competitor is just a click away!
David Pidgeon, chief operating officer, Redtag, said: “I think overall it’s probably a fair observation to say that e-commerce in most businesses flourished in 2020. We expect advances in technology — in retail — to move at a pace, and sometimes it’s easy to be influenced into the latest new digital development, so you have to choose well. The new normal is offering new platforms, channels, and opportunities for businesses to engage with their customers, and this is the area we will focus on the most — how we can continue to use technology to help us gain a rich understanding of our customers and to serve them better.”
It predicted that e-commerce will become the main source of growth in the retail sector over the next five years, which has grown from a mere $5 billion in 2015 to about $24 billion in 2020.
Verloop.io founder and CEO Gaurav Singh, said: “In e-commerce, one size fits none. Customers expect a personalised approach that makes them feel special. Businesses now have to communicate with their consumers to build meaningful, continuous, and delightful interactions. Meeting a customer’s ever-changing and increasingly requiring expectations and habits requires the brand to support a customer 24/7 across channels. While most customers want the e-commerce players to be connected round the clock, others are interested in live chat or email, while some want to talk to brands on Twitter.”
Led by the region’s largest economies Saudi Arabia and the UAE, it is estimated that e-commerce in the Gulf will grow to $29 billion in 2021, $34 billion in 2022, $39 billion by 2023, $44 billion by 2024, and $50 billion by the end of 2025. The report forecast a larger acceleration in e-commerce between 2020-22, at a 20 per cent compound annual growth rate (CAGR), and 14 per cent until 2025.
Shane O’ Hara, CEO of Paymentology, said: “The year 2020 has seen that e-commerce is the way to future business, replacing most brick-and-mortar businesses. Digital disruption will accelerate, breaking the traditional businesses and paving the way for a more digitised world. Business activities are increasingly becoming apps on smartphones with products and services being delivered to customers’ doorsteps through orders placed and paid for via the smartphone apps – be it ordering food, a refrigerator or an airplane ticket.”
E-commerce sales revenue in the Middle East and North Africa region is forecast to grow at a compound annual growth rate (CAGR) of 16.9 percent between 2016 to 2021 to reach $48.8 billion (Dh179 billion) in 2021, according to Deloitte, the global accounting firm. The UAE is expected to lead the market, followed by Saudi Arabia and Qatar. These countries are expected to jointly account for more than 50 per cent of the forecast revenue in 2021.
“The sector has a long way to grow in this part of the world where e-commerce penetration is still way below the other countries. The number of IT players specialising in digital transformation will accelerate as businesses are shifting to the digital space. This trend will see the whole world – business, economic activities, and government services – shifting to the digital space,” said O’ Hara.
Global non-cash transactions surged nearly 14 per cent from 2018 to 2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade, according to the World Payments Report 2020 by Capgemini Research Institute. Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader, at 243.6 billion. The growth was driven by increasing smartphone use, booming e-commerce, digital wallet adoption, and mobile/QR-code payments innovations. It was led by China, India, and other SE Asian markets, contributing 32 per cent growth.
“People will adjust to the new normal by acquiring new skills that are well suited for the digital era where machine-to-machine interaction will reduce man-to-man interaction. Instead of humans, you will interact either with robots or chatbots, taxis will run on their own, without drivers. It is an interesting world that we are entering powered by the fourth industrial revolution and run on artificial intelligence, big data analytics, robotics, biotechnology, cybersecurity, and genetic engineering,” added O’ Hara.
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