The Mena region is leading in online sales, a study says.
According to marketing company Admitad, the Mena region posted a 21 per cent surge in online marketplace sales last year, which hit more than $25 billion.
With 29.5 per cent of all orders, the fashion category led the increase in online sales, overtaking the previous year’s leader beauty products.
The fashion segment was followed by the electronics and household goods segment.
An online marketplace is a site that hosts several vendors that can sell their products and services.
Marketplace sales on average account for more than half of all online sales globally.
The study also predicted further growth in online marketplace sales in Mena this year.
“Mena marketplaces will see the trend of diversification of customer acquisition channels catching up in 2023 to accelerate growth,” Admitad experts told Arabian Business.
“The number of local content platforms and influencers in the region will also see a spike [this year], besides a rise in collaboration between brands and direct advertisers to offer rewards for orders placed,” they said.
“One of the greatest strengths of the major marketplaces has been their efficient strategy around seasonal sales,” the study said, explaining that the main factors driving the growth in sales of online marketplaces are convenient delivery options, a large selection of goods across many different categories, and aggressive and effective marketing strategies.
Online recommendations hook customers
While marketplaces offered a variety of rewards and promotional channels to entice customers, Mena customers preferred to follow recommendations and reviews on content platforms to firm up their purchase decisions, which accounted for 28 percent of all purchases, the study found.
Coupon websites were a major draw for local users in the Mena region last year, accounting for more than 25 per cent of their orders from marketplaces.
Contextual advertising, mobile app advertising, and email marketing have all seen significant increases in 2022 as well, adding to the growth of online sales.
For instance, according to Admitad, the quantity of purchases made last year based on recommendations made in thematic forums increased significantly.
Meanwhile, personalisation has also added to increased sales.
A report by MoEngage had found that “52 per cent of brands are investing more in their marketing technology stack to drive personalisation.
Fashion industry to bloom
“Among the fashion products category, accessories accounted for a particularly large number of orders by shoppers in the Mena region – clocking a significant proportion of inexpensive but numerous purchases,” the Admitad report said.
“They also are one of the fastest growing categories by the number of orders from marketplaces – the number of purchases in this category almost doubled in 2022.”
The high-end fashion industry will also grow, with revenue in the luxury goods market amounting to $2.8 million this year in the UAE.
The market is expected to grow annually by 3.13 per cent (CAGR 2023-2028). The market’s largest segment is luxury watches and jewellery with a market volume of $1.7 million in 2023.
Shoes, automobile goods, toys, electronics and beauty products are other products which hit high growth last year, the study said.
