What is driving the e-commerce industry in the MENA region?
Digitization is at the heart of the e-commerce market today, with consumers driving its growing importance.
Retail, being one of the main drivers of e-commerce today, provides consumers with a way to purchase goods that are convenient and available on the go. It’s clearer every day that customers place greater importance on experience when shopping online. About 91% of customers in the Middle East and North Africa (MENA) region have become digital converts since the pandemic and intend to continue shopping online. With this trend, MENA e-commerce sales are expected to reach $50 billion in 2022, up from $32 billion last year.
Over the past decade, the MENA region’s e-commerce market has steadily grown, facilitated by the development of the region’s e-commerce ecosystem, a well-developed logistics infrastructure and consumer confidence in digital payment channels. The recent rapid expansion of the sector, driven by Covid-19, presents new opportunities for retailers.
With lockdowns in place at the height of the pandemic, many MENA shoppers turned to digital channels to access the products they needed, with groceries and electronics being among some of the categories at the fastest growing. With today’s resilient logistics sector, research suggests that online shopping habits are here to stay as more and more consumers are inclined to purchase their goods over the internet, even after the pandemic.
The rapid adoption of online shopping has definitely changed the face of retail. Some companies heavily invested in brick-and-mortar stores have had to close their outlets or go out of business altogether. As consumers shop less in-store and more online, expectations around the shopping experience are also changing. A recent PWC consumer survey found that fast and reliable delivery remains the second most important factor in purchasing decisions, after price.
In this increasingly fast-paced, challenging and competitive environment, where consumer expectations are high, it is important that retailers and brands invest in a solid e-commerce strategy, supported by effective logistics solutions to ensure success. More than ever, consumers now want fast, on-time and flexible delivery solutions, with the option of easy returns. While ensuring on-time deliveries to customers is often one of the biggest challenges e-commerce businesses face, it’s also a key area where they can gain a competitive advantage by working with the right logistic provider.
Today, digitization is one of the best methods to ensure fast and reliable delivery services. With innovative tracking solutions, retailers and consumers benefit from timely updates on their packages and control over the delivery of their goods. By providing more transparency, flexibility and convenience, tracking is a surefire way to gain consumer trust while improving efficiency.
The digital transformation of the logistics industry, which includes digitized processes for customs documentation, can help e-commerce businesses streamline lengthy or complex administrative procedures. At the same time, new technologies designed to improve efficiency across the logistics hub, including autonomous vehicles, artificial intelligence, data analytics, robotics and drones, continue to offer revolutionary new ways to further improve the delivery process.
Brands and retailers that can leverage these tools to advance their delivery services will earn the trust of their customers. To take advantage of the growing momentum of the e-commerce market, companies must work closely with their logistics providers who offer advanced technological solutions to ensure reliable and fast delivery services in this competitive market. In addition, businesses must also embrace changing consumer behavior and meet the demand for on-time, flexible, and reliable delivery services.
Taarek Hinedi is Vice President of FedEx Express Middle East and Africa Operations