Hamburg based secondary research company yStats.com has released a new report on B2C E-Commerce. The “MENA B2C E-Commerce Report 2014” indicates that Middle East and Northern Africa are among the most dynamic regions in global E-Commerce, with still more growth expected in coming years.

1. Press Release
Hamburg, January 24, 2014
RESEARCH ON INTERNATIONAL MARKETS
WE DELIVER THE FACTS YOU MAKE THE DECISIONS
Emerging B2C E-Commerce market in the MENA region
Hamburg based secondary research company yStats.com has released a new report on B2C
E-Commerce. The “MENA B2C E-Commerce Report 2014” indicates that Middle East and
Northern Africa are among the most dynamic regions in global E-Commerce, with still more
growth expected in coming years.
According to the findings of this report, B2C E-Commerce presently accounts for less than 1% of total
retail sales in the region, as there are obstacles to overcome to prepare the way for the boom. These
obstacles include the low adoption of the online retail channel by local businesses, the predominance
of cash on delivery payments, and low consumer acceptance of online shopping, compared to
international benchmarks.
Local merchants serve the region
Several fast growing local merchants have emerged in response to the developing interest in B2C
E-Commerce in the Middle East. Among them are mass merchants JadoPado and Alshop, and online
electronics store EmiratesAvenue. Three other regional merchants, online mass merchant Souq.com,
online fashion store Namshi and flash sales site MarkaVIP together garnered over USD 70 million of
investment in 2012. Nevertheless, International sites Amazon and eBay are among the most popular
shopping destinations of online consumers in the Middle East, though behind regional player
Souq.com in terms of annual spending per shopper. Due to relatively low adoption of the online
channel by local merchants, cross-border Internet shopping is common. There are even special
services that assist consumers in buying from International websites and getting their orders delivered.
UAE leads in online sales
E-Commerce is growing in the UAE at a rate of over 20% annually off increasing Internet and mobile
coverage, while store-based retail is affected by high real estate prices. Over 80% of the population
are Internet users, and of this number over 15% shop online; below 10% do so on mobile devices. The
most important factors for online shoppers in the UAE were pricing, customer service and ease of use,
though security concerns and inability to touch and test products before purchase keep some
consumers away from online purchases. The most popular E-Commerce websites were online mass
merchant Souq.com, coupon dealer Cobone, Amazon.com and online flash sales website MarkaVIP.
Consumer electronics and appliances was the largest product category by B2C E-Commerce sales in
UAE in 2012, excluding travel and tickets. The most used payment methods in the UAE last year were
credit card and cash on delivery.
B2C E-Commerce is burgeoning also in Saudi Arabia, though largely restricted to sales of clothing,
electronics, appliances and travel booking. Annual growth reaching almost +40% between 2012 and
2015 is expected. Over half of the population are Internet users and of them about 10% shopped
online. Mass merchants Souq.com and Sukar.com, followed by online fashion sites Namshi and
MarkaVIP were the leading E-Commerce websites by Internet audience reach. Cash on delivery is the
payment method used by most Saudi online shoppers.
Meanwhile in Qatar rapid development of information and communication technology and an online
payment infrastructure facilitate growth of E-Commerce there. Internet penetration on the total
population reached almost 70% in 2012, with below 5% of the Internet users shopping online. B2C
E-Commerce sales are forecasted to grow with a CAGR of over +20% between 2012 and 2015.
Israel also has been a regional leader in Internet shopping, with a double digit share of Internet users
making online purchases. Consumer electronics has been the product category with the highest B2C
E-Commerce sales, but the fastest growing category in the next five years is expected to be groceries.
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2. RESEARCH ON INTERNATIONAL MARKETS
WE DELIVER THE FACTS YOU MAKE THE DECISIONS
Other regional markets are adopting online shopping
Though total sales are not at the level of the regional leaders, Internet penetration and ICT
development contribute to burgeoning B2C E-Commerce in a few countries. In Bahrain, B2C
E-Commerce accounts for over 5% of total retail sales, as almost 90% of the population is Internet
connected and 5% of users shop online. Similarly, nearly 80% of the population in Kuwait uses the
Internet, and the presence of online payment gateways there favors B2C E-Commerce. In Jordan,
Internet penetration is over 70%, with just under 10% of Internet user shopping online, and B2C
E-Commerce is expected to increase as trust in online shopping and payment emerges.
Currently, only a small percentage of roughly half of the Egyptian population that has access to the
Internet shops online. As Internet and mobile penetration increase in Egypt, the potential of B2C
E-Commerce will be enhanced. Mass merchants Souq.com and Jumia.com were the leading
E-Commerce websites in Egypt by audience reach, followed by international players Alibaba and
Amazon. In Morocco, B2C sales in the first three quarters of 2013 have already passed the
transaction total for 2012. The number of online shoppers reached over 300,000 last year.
While showing growth potential, other markets in the region have lagged behind the leaders. Retail
remains largely traditional in Iran, though the spreading Internet connectivity will facilitate
E-Commerce. Just over a quarter of the Iranian population used the Internet in 2012. Development of
B2C E-Commerce in Iraq has been held back by war, though payment and delivery infrastructure is
emerging slowly. Internet users in Iraq accounted for less that 10% of the population last year. In
Lebanon, B2C E-Commerce is in early stages of development, with most of the emerged players
specializing by product categories. Internet penetration reached over 60% of the total population in
2012, but only a small one-digit share of Lebonese Internet users make purchases online. Finally,
despite relatively high internet penetration rates in Oman, B2C E-Commerce is at a very early state of
development, with overseas websites as the destination of most online shopping there.
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About yStats.com
yStats.com has been committed to research up-to-date, objective and demand-based data on markets
and competitors for top managers from various industries since 2005. Headquartered in Hamburg,
Germany, the firm has a strong international focus and is specialized in secondary market research. In
addition to offering reports on markets and competitors, yStats.com also carries out client-specific
research. Clients include leading global enterprises from various industries including B2C
E-Commerce, electronic payment systems, mail order and direct marketing, logistics, as well as
banking and consulting.
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