Year of upheaval: These are the trends shaping Middle East tech
Aside from headline-grabbing Hyperloop plans and government crackdowns on communications tech, what are the shifts that will really change the region?
Over the past year, the Middle East’s IT, tech, and telecoms sectors have witnessed considerable change.
While there’s been the launch of the world’s largest concentrated solar plant in Morocco, and headline-grabbing plans for a Hyperloop high-speed transportation link between Dubai and Abu Dhabi, at the other extreme some countries have been involved in blocking VoIP, and online and VPN services.
Relationships between consumers, businesses, startups, governments, regulators, and telecom providers continue to grow more complex, as societies and economies in the Middle East become more digitally dependent.
Given that busy landscape, what developments have captured attention across the region? Here’s what four experts think:
E-commerce begins to come of age
Some serious money is finally being put into e-commerce in the region.
The most eye-catching new e-commerce initiative is Noon.com, an online shopping platform set to launch in January, initially in Saudi Arabia and the UAE but later across the region, with an inventory of 20 million products.
Noon is fronted by Mohamed Alabbar, a prominent Emirati businessman. Noon is raising funding of $1bn from Gulf investors, with Saudi Arabia’s sovereign Public Investment Fund taking a 50 percent stake. PIF already revealed a new interest in e-commerce when it acquired a $3.5bn stake in Uber in mid-2016.
Alabbar said he wants the share of the regional retail market attributable to e-commerce to rise from two percent, or $3bn, to 15 percent, or $70bn, over the coming decade, with Noon accounting for a large part of that increase and becoming the region’s dominant e-commerce player.
Although e-commerce has been growing in the Middle East in a small way for the past few years, it lags behind the level of development that one might expect given the high and rising levels of internet connectivity, at least in the Gulf states.
But the scale of the new investments and plans suggest that 2017 will be the year when e-commerce in the Middle East begins to fulfill its potential.
Mobile and IoT make strides
A report published by the GSMA this year found that the mobile industry contributed more than $150bn to the Middle East and North Africa economies in 2015. This figure is forecast to increase to almost $200bn by 2020.
Voice-activated AI solutions, such as Amazon Echo, emerged as the main user interface for connected devices in the smart home.
Meanwhile, on the roads, a rapidly-growing ecosystem is developing for connected and autonomous cars.
To support the flourishing IoT space, the industry agreed on three standards for new low-power wide-area networks, or LPWAN, using licensed spectrum, which marks a move away from proprietary approaches. This technology will help accelerate the development of the IoT market in 2017.
Mobile messaging moves on
For me, the most important evolution in 2016 has been the accelerating shift to more private messenger platforms such as WhatsApp. We’ve seen this trend all over the world.
There are a number of interesting reasons for this change in user behavior. In developing economies, where most people still pre-pay their mobile data, people like messenger platforms for being lot less demanding in data usage, which helps keep data costs down. There are no auto-play video ads, for example.
Perhaps the most interesting insight comes from people who say the public nature of social networks puts them under too much pressure to look their best at all times and always give the impression that their life is amazing.
This shift has dramatic implications for marketers. First, there’s no way for marketers to buy their way into people’s conversations on these platforms. Furthermore, the conversations are private, so it’s much more difficult for marketers to glean the insights that we’ve been able to collect over recent years from activities such as social listening.
Perhaps most importantly, the metrics used until now to measure social success, things like likes, views, and clicks, simply don’t matter in the same way in messenger platforms.
Brands need to rethink their whole approach to marketing, not just in terms of the content they’re producing for social, but also in terms of thinking about how they can use everything at their disposal, every element of the marketing mix, to inspire and fuel meaningful and valuable organic conversation.
Egypt begins to bounce back
A number of local and regional platforms are changing the way people work.
Careem, Uber’s regional rival, is growing fast and secured $350m in funding. GetMumm is creating a platform connecting cooks to their customers. Tutorama is connecting tutors to students and Ready2Ship, or R2S, is connecting truckers to ecommerce customers. Vezeeta is connecting doctors and patients.
These platforms are changing the nature of work and employment, and creating new opportunities and much needed jobs for hundreds of thousands of people.
Despite the agony, currency devaluation should help many local companies become more price-competitive in regional and global markets. The cost of talent in Egypt has gone down, and this reduction should allow offshoring firms to compete more vigorously and expand their regional and global footprint.
More venture funding is flowing to Egypt. Algebra Capital just launched its new $50m VC fund. Flat 6 Labs and A15 are also launching early stage or seed funds. Regional funds such as Beco Capital are looking for opportunities in Egypt. Next year, we should see more series A funds investing in technology startups.
Accelerators are starting to narrow their focus to specific sectors that offer interesting opportunities. Up to last year, most acceleration programs were generic in nature.
This year, we started witnessing a focus on sectors such as hardware, fintech, gaming, creative industries, and clean-green tech. Expect more changes in 2017, especially in sectors that can be transformed by technology, such as healthcare, education, and logistics.
Originally published at www.zdnet.com.