The Middle East’s e-commerce market will grow by 12.58 per cent on an annual basis to reach $116.8 billion this year, a study by Business Wire found.
“The B2C e-commerce is expected to grow steadily over the forecast period, recording a CAGR of 9.64 per cent between 2023 and 2027,” the report added.
The sector’s gross merchandise value in the region will increase from $103.8 billion in 2022 to reach $168.8 billion by 2027.
By the end of 2023, the Mena region’s e-commerce market size is expected to be worth $100 billion.
Growth of digital payments
The Mena region will also see 147 per cent growth in mobile wallet usage by 2025.
51 per cent of Generation Z in the UAE use digital or mobile wallets for daily payments, compared to 48 per cent in Saudi Arabia, and 43 per cent in Egypt, the research found.
20 per cent of UAE respondents reported a decline in cash usage, with 50 per cent of Generation Z respondents confirming that they exclusively use cards for transactions.
Consumers born between the late 1990s and early 2010s are the driving force for digital payments, thriving on innovation, convenience and seamless experiences, a recent report by Amazon Payment Services indicated.
However, it is the millenials, those born between 1981 and 1996, who have the highest spending power, the report added.
“E-commerce is a growing space in Mena. It is pivoting great success stories that are worth noticing. What is good to see is that these companies are spread all across industries and they are powering category growth like never before,” Sudhakar Adapa, founder and CEO of Commerzify told Khaleej Times.
“Moreover, it is so heartening to see that the enabler ecosystem piggybacking on technology advancement is always ready to offer customised solutions to the brands and companies engaged in the internet business.”
Exploring the metaverse
UAE retailers such as Majid Al Futtaim are also jumping in on the metaverse bandwagon.
The retail giant had announced last month that it will launch the ‘Mall of the metaverse’, a virtual shopping mall.
Mohammad Baker, CEO of global retailer GMG, told Arabian Business this year that experts view the integration of augmented reality and virtual reality as a transformative development in the realm of online shopping.
He said that these technologies empower customers to experience virtual try-ons of fashion items, accessories and makeup, all from the comfort of their own homes.
With artificial intelligence at the helm of the metaverse industry, the retail sector will be keen on pursuing AI technologies for customer retention.
Tamana Padhi, principal, Consumer Industry for Retail, said: “The global metaverse market is set to grow at 33 per cent reaching $1 trillion in 5 years. The Mena region is set to build a $360 billion economy around metaverse in 10 years. Overall consumers in Mena are maturing.”
Half of all consumers in the Mena region are keen to experience the metaverse, and retailers are exploring artificial intelligence and machine learning to improve customer experience, the report by Business Wire found.
Piyush Chowhan, Chief Information Officer of Savola Group, said: “Customers are a step ahead and many retailers are still trying to catch up with their needs.”
