Shopping online is almost like magic, and consumers are hungry for more. In this ‘Netflix culture,’ consumers make online purchases because of great offers, better product selection, and the simple ability to buy from home in their PJs.
But buyers also are discouraged by a variety of factors, such as unreliable shipping, complicated return processes, and delivery costs.
As a business, the digital experience you create must address the consumer’s potential pain points. The market is ripe for new business owners to compete in this $8 billion industry.
To take advantage of this opportunity, you have to ask yourself:
- What does your customer want?
- What approaches should you use to encourage them to buy from you?
The Middle Eastern consumer — what are their pain points?
The MENA region has seen a steady increase in e-commerce in recent years. As of 2017, 29 percent of the Middle Eastern population shops online. And, almost half of these shoppers do it because it’s cheaper than in a traditional “brick and mortar” store.
With smartphones, social media, and marketplaces such as Namshi, Souq, and Noon, consumers are encouraged to see e-commerce as a mainstream mode of shopping. In fact, almost 56 percent of Middle Eastern shoppers use their phones for shopping.
Consumers are still cautious of online payments, with 80 percent of online shoppers preferring ‘Cash on Delivery’. By understanding their path to purchase, you can squash their fears and encourage more buyers to shop online.
Social media influencers can ‘warm up’ buyers.
Platforms and portals, such as Instagram, YouTube, and Pinterest, have showcased the power of influencer marketing. Seeing people you trust and like use certain products provides a stronger desire to buy the same products.
Beauty YouTubers such as Zoella can recommend products such as a Topshop blusher, which will result in a 40 percent click-through rate for the brand’s website.
Influencer marketing has proven to be more effective than traditional advertising because the consumers trust and love the personality.
All products are not equal — choose smartly and timely
When starting out, your online business must focus on the holy trinity:
- Free or affordable and dependable delivery
- Deals and discounts — typically more than brick and mortar stores.
- Convenience and flexibility in product selection.
And don’t forget about national holidays. In particular, Ramadan is the time when consumers want to shop the most. While most Ramadan shoppers still prefer offline retail, your business can maximize social media ads and promotional emails.
Leading shopping categories — their opportunities and constraints
Consumer behavior also can vary depending on the products they purchase. Here is an overview of the major e-commerce categories.
Fashion: Find Your Unique Value
As a $1.1 billion industry in the GCC region, fashion is a major slice for online business owners, especially shoes and women’s clothing (Surprise! Surprise!).
Keep track of region-specific trends for a competitive edge in the MENA market.
In this region, consumers are brand-conscious and shop with specific needs. In the UAE, ‘modest clothing’ is trending, with almost 1M followers on Instagram.
The market has heavy hitters, such as Namshi and Sivvi.com, along with Landmark Group. But new startups who set themselves apart still can compete. Businesses with a strong cultural understanding of the region can develop a better user experience.
Beauty: Educate to Build Trust
The opportunities in this $1 billion industry are huge. With an 11 percent contribution to total retail sales, this e-commerce category has much to offer to your business. But developing consumer confidence is critical.
Social media will be valuable for educating potential consumers. Use YouTube and Instagram for greater exposure. Your business’s bottom line could depend on that catchy and cute product demo.
Your focus must be on the digital experience you deliver to your target customers. Use quality content that will help your customers trust your brand and product. Major contenders in this space are Sephora, Namshi and, of course, Souq.
Electronics: What Can You Deliver?
The pioneer of the MENA region’s e-commerce is valued at AED 15.4 billion for both offline and online retail. As a result, electronics has the highest online percentage of total retail sales by almost 16 percent (2017).
Countries such as the UAE have one of the youngest populations in the world. This means the average consumer has a strong ‘upgrade culture’. Simple, quick purchases, such as chargers and headphones, promise easy revenue. Avoid bulky products, such as TVs and fridges, since they are harder to deliver.
Souq is a leader in this category, and has partnered with eXtra and Alshaya to expand its electronics product choices. Noon also is gaining as a competitor. To compete with these guys, you must focus on your product offering and last-mile delivery.
Fast-Moving Consumer Goods: When Diapers Become a Gateway
Low-cost and perishable, the Fast-Moving Consumer Goods (FMCG) pose unique delivery challenges. But each segment has its unique opportunities as well. Enter: disposable diapers.
Having a baby can generate consumer behavior shifts that encourage more online purchases. In fact, the online baby product market is expected to grow by 21 percent from 2018 to 2022. Amazon’s “Subscribe and Save” service has been a huge hit for new parents who need convenient and cheap solutions — almost 40 percent of Amazon’s diaper purchases were done using this service.
As a new business owner, you will continue to have a million questions. But with this bird’s eye view, you can decide what is most valuable to develop for your business now. With a sound digital shopping approach, you can adjust to any issues of your target consumer.
And to find out more about specific products consumers love to buy in the MENA region, check out this article.
This blog is intended for informational purposes only, and should not be considered business or legal advice. MENA 360 DWC-LLC (Fetchr) will not be held liable for the use, non-use or misapplication of this information, lost profits, personal or business interruption, or any other loss.