Demand for e-commerce surges as Arabs get Internet savvy

ONLINE sales in the Arab world are forecast to top $2 billion by 2016, amid a boom in e-commerce in markets including the UAE and Egypt, it was reported in Abu Dhabi’s leading English language newspaper The National.

As a result of this growing confidence to shop online, the region has seen a huge increase in the number of e-commerce or group buying websites that allow millions of people in the Arab world to experience more in their local cities.

One such successful venture has been, which reported under two million members and sells over 100,000 deals in the Middle East and North Africa (Mena) region every month. 

The company was launched in 2010 has sold over 1.2 million Cobone deals with discounts accounting to over $70 million.

Jaya Arunasalam head of Travel and Hospitality for says: “Customers are always looking for new things to do and experience, so each of our deal categories, be it electronics, fashion, dining or travel perform very well. Cobone destinations have become extremely popular for customers looking for that quick city escape or that luxury break that won’t break the bank.”

“On a recent survey to Cobone’s customer database, 70 per cent of our customers expressed an interest in our destinations offering while 62 per cent who were interested in food and beverage deals.  As our target audience is diverse, we are catering to all segments of our customer base. We aim to serve the right deal to the right people, at the best price, at the right time.

“Over time, in our efforts to stay ahead of the game, has evolved more into a discounted e-commerce and destinations site. We focus our resources on great customer service and outstanding partner support,” he added.

In the UAE, the government is leading the way in e-commerce transactions in the country. The Telecommunications Regulatory Authority (TRA) has created an effective e-commerce environment while the e-pay gateway allows customers to settle fees for e-government services online on a 24/7 basis in a secure environment. Those looking to pay traffic fines or electricity bills are also able to do so online. Arabic-based content will be driven by these eGovernment portals.

Despite its growth, e-commerce is still a new concept and lack of trust and payment security remains a concern among many users. According to Onecard, an online payments company headquartered in Riyadh, 56 per cent of internet users in the region said fraud was their main worry when buying online. Onecard provides a service similar to PayPal, offering users online payment accounts that can be topped up using prepaid cards or regular credit cards.

After-sales satisfaction is also key factor to ensure continued use.

“Guest satisfaction is central to us. In order to ensure complete satisfaction, the team qualifies each partner prior to launching their deal on Existing guest reviews plus occupancy levels versus demand are kept into consideration to assess their ability to accommodate all customers who have bought a deal,” said Arunasalam.

Arunasalam adds that booking patterns have shown us that Middle East buyers are becoming more impulsive with their purchases. “The time spent to purchase has decreased 30 per cent compared to the same period last year. Customers are also showing more interest in getting off the beaten track trying less popular destinations like Kathmandu or Kenya,” he added.

According to a recent research by Euromonitor International, the Middle East and North Africa region is forecast to see a 54.7 per cent increase in Internet users over 2012-2020, in part as a consequence of the increasing availability in Arabic content. The growing demand for mobile Arabic-language platforms, especially for banking and retail services, will drive the regional m-commerce sector, providing opportunities for businesses in the online domain.

Visa’s latest ‘Tourism Outlook: UAE’ report that uses VisaVue Travel data to compare tourism receipts from across the UAE in 2010 and 2011, show that Saudi Arabia’s spending shot up 73.8 per cent, with a total 1.1 million transactions made on Visa debit and Visa credit cards in the UAE during 2011, with only Angola recording a higher growth rate internationally (89.1 per cent). This growth resulted in a total spend of $326.3 million, making visitors from the Kingdom the fourth biggest spenders, just behind the UK, Russia and the US.

Speaking Out

By Shalu Chandran