The B2B e-commerce sector in the Middle East is bound to grow exponentially in the coming years, with the market segment forecast to hit $3 billion by 2025, according to the latest report by Red Seer, a global consultancy specialising in digital sectors.
The tremendous growth potential of the sector has drawn the attention of numerous investors, as the B2B market in the Middle East has been already approaching $500 million in funding in the last two years.
For now, penetration in eB2B retail in MENAP is less than one per cent.
“Penetration in eB2B retail in MENAP is currently less than one per cent, whereas regions like China have surpassed 10 per cent penetration already,” said the report.
“The market, however, is showing significant growth potential, driving sustained future growth, with the market size expected to reach $3 billion by 2025,” said RedSeer.
Bigger players like Sary and MaxAB have already surpassed $100 million in funding, helping them to consolidate their geographical presence in the region.
The fast-moving consumer goods and groceries segments retain an edge over other markets, accounting for more than 90 per cent of gross merchandise value currently, the report finds.
Nevertheless, “huge opportunities exist in other sectors like fashion and electronics,” RedSeer said.
Bigger players like Sary and MaxAB have already surpassed $100 million in funding, helping them to consolidate their geographical presence in the region, RedSeer said.
The study said the eB2B sector in the Middle East is on the verge of witnessing consolidation as players look to distribute their focus on scale and profitability as well as enhancing capabilities.
“Consolidation is imminent as witnessed recently when players merged to enhance capabilities as seen in the acquisition of DXBU, which helped them scale business. Global expansion is another area where consolidation helps, as seen with Sary’s acquisition of Mowarrid to enter the Egypt market,” RedSeer said.
Similar trends are predicted in future where, by way of consolidation, bigger players will attempt to hone their capabilities or foray into new markets.
The RedSeer study, however, cautioned that it is important that players learn from evolved markets and make the right choices to ensure sustained future growth.
“As this transition takes place, the MENA region must be strategic to ensure the region’s B2B sector continues flourishing with cross-border buying and selling,” RedSeer said.
