Social media platforms are boosting the Mena e-commerce sector, according to new research by the Middle East arm of RedSeer Strategy Consultant.
Thus, Mena retailers should focus more on Gen Z and millennials consumers, as these demographics tend to be impulse purchasers and are heavily influenced by social media players, the study suggests.
The drastic shift in consumer behaviour and spending habits are deemed as the major drivers of the forecast boom in social media spending by retail chains and corporate, which is currently estimated at $3 billion.
Social media channels already wield significant influence, driving more than 30 per cent of purchases in the $400 billion Mena retail market.
“With their large user base and increasing time spent, social media platforms are fast emerging as the preferred influential channels for retail purchase decisions [in Mena],” said the report.
The platforms are emulating the surge in social commerce prevalent in countries like China and some of Southeast Asian countries, the report finds.
“The rising social commerce market will create over $10 billion additional revenue opportunity for social media players in the region [over the next five-year period].”
Spike in social commerce
The study noted that alternate models such as live streaming have gained steam as consumers spend more time on social media.
“The influence of social media on purchase decisions is already very high at 30 per cent and it will be difficult to increase this further in the light of the new channel emerging. Hence, $10 billion is the additional revenue opportunity for social media in the future in Mena,” said the RedSeer report.
The corresponding retail spend that can go through the social media platforms is much higher at $120 billion, it said.
Head of business partnerships for retail and e-commerce Mena at TikTok, Aref Yehia, said Mena ad spending across platforms is not going to slow down.
“In fact, there is a continuous rise of both user base and engagement for TikTok, which played a fundamental role in augmenting the surge, as the platform continues to inspire creativity and bring joy, making it a safe and effective place for advertisers to showcase their brands,” Mr Yehia told Arabian Business.
“Our partnerships team’s efforts are focused on enabling advertisers to reach their business objectives via leveraging our business solutions, such as video shopping ads, which leverage the platform’s native format to deliver strong performance results for the e-commerce sector.”
