E-commerce in the MENA region: Why Now is the Perfect Time for Blockchain Rewards
There has never been a better time to be an e-commerce startup in the MENA (Middle East and North Africa) or African market. Business confidence is at an all-time high.
According to a report by the Arab Federation of e-Commerce, the e-commerce sector across the MENA region is set to grow tenfold, from $20 billion in 2017 to over $200 billion by 2020. The scene is similar in Africa, where the market will reach $50 billion by 2018, up from just $8 billion in 2013.
For a shining example of how profitable e-commerce can be when it’s done right, you only have to look at the success of Jumia, the online marketplace juggernaut that has come to be known as “the Amazon of Africa.” From a modest three-person Lagos-based office in 2012, the company has grown to boast 126 operations in 23 African countries and a customer base of three million.
If you have products to sell and customers to reach, it makes sense to ride the online wave right now. However, while there is a proven market and untold revenue potential, there are pitfalls, most notably in the form of competition. Because if you’re taking your business online, you can guarantee that one or more companies with a similar business model are doing the very same thing.
With new business comes new competition
The greater the market grows, the more competitive the landscape becomes. This means you’re going to be vying with other businesses for custom. And there are only so many customers to go around.
Your business must be better than the competition in every way, from the quality of the products you sell to the content you serve them, to the level of customer service you provide.
According to a study by Alliance Data, 63% of Gen Z and Millennials agree they have many choices of where to shop, so a brand must show them loyalty to earn their business. You have to earn the trust of a customer and then do everything you can to keep them. Because a loyal customer is a lifelong customer.
Creating loyal customers
Customers are ready to be loyal. A study by Nielsen revealed that 87% of consumers in the Middle East and Africa are more likely to shop at a retailer that offers a loyalty program.
Another finding from that same study is equally as telling: only 42% of respondents said that retailers offered some kind of loyalty program.
So consumers are keen to do business with retailers that reward brand loyalty, but less than half of retailers are doing anything about it.
This is great news for you as a merchant, as it gives you a chance to do something your competitors might not be: rewarding customers for doing business with you.
The benefits of customer retention are significant:
- 65% of a company’s business comes from existing customers (Gartner)
- 43% of customers spend more money with brands they are loyal to (Accenture)
- Loyalty program members spend 12–18% more per year than non-loyalty program members (Oracle)
- It costs 5–25X more to earn a new customer than it does to retain an existing one (HBR)
Promoting loyalty with blockchain rewards
For a new e-commerce retailer, traditional loyalty programs — while potentially rewarding — aren’t an appealing solution. They’re expensive to implement and maintain, and they don’t really fit in with what customers want.
In a traditional loyalty program, customers sign-up and receive points every time they shop. But they only receive those points if they use the card at the point of sale, which requires them to remember the card and you to remind (and encourage) them to use it. With long delays in getting access to points and a need to collect multiple points over a long period for a reward that’s decent in value, customers simply don’t see the benefit. The fallout of this can be recognized in:
- Low redemption rates
- Inactive accounts
- High customer service costs
- Low client retention
What businesses need is a simple, inexpensive loyalty program that helps develop a symbiotic relationship between you and your customers. Blockchain does all of these things.
Blockchain rewards help to reduce system management costs by using smart contracts for transactions. Smart contracts are transparent, tracked, and secure, with no middlemen involved. This drastically reduces the potential costs caused by fraud or error.
In the case of BitRewards, the program is free for merchants to implement. We provide you with the software and the expertise to roll out the program; you only need to purchase the BIT Tokens.
Blockchain turns the traditional rewards scheme set-up on its head. Rather than have to wait weeks or even months to receive access to points, blockchain can reward customers in real-time.
With BitRewards, the moment a customer makes a purchase on your website, they can instantly be rewarded with cash back in the form of BIT. What’s even better is that BIT can grow in value. The longer a customer holds on to their BIT Tokens, the more they’ll be worth, giving them real purchase value.
Blockchain rewards aren’t bound by the same restrictions as traditional loyalty programs, whereby merchants dictate how rewards can be spent and when. With BitRewards, a customer is free to spend their rewards at their own discretion and at any retailer that accepts them as payment. They can choose to save up their BIT Tokens or exchange rewards for actual cash.
The growing MENA and Africa e-commerce landscape offers huge potential to new businesses but in order to grow and thrive you need to reward customers for their loyalty. BitRewards was created to help you do just that, allowing you to capture a market of consumers keen to pledge their allegiance.