How e-commerce in MENA will boom by the year 2020

September 23, 2015

Payfort has recently released a report called the “State of Payments 2015” which includes the forecasts by the year 2020 of all online payments in the MENA region. 60+ companies in ecommerce in the region were polled to get their view on how customers are behaving online.

Ecommerce is the fastest growing sector covered in this report and by 2020 it will become the biggest. By then, Payfort predict UAE and KSA will have a combined ecommerce market of over $10 billion in 2020 vs $3.8 billion in 2014.

Ecommerce market size in 2014

ecommerce MENA 2014

Ecommerce market size in 2020

ecommerce MENA 2020


In terms of seasonality, we can see that for the year 2014, ecommerce size was continuously growing from January to July, before dropping in August just after Eid El Fitr and it reached a peak point in November and December before Christmas and New Year. The figures charted on the graph represent divergence from the 12-month average. So if transaction size figure in September is $1.8m that means the total amount spent was +$1.8m higher than the 12 month average amount.

ecommerce MENA evolution size 2014

The most important aspect when it comes to online payment for ecommerce companies is the transaction volume. They are focused on increasing the number of transactions with the aim of capturing market share. In the future they will have to focus on increasing their average order value.

ecommerce MENA importance

Since cash-on-delivery is causing high return rates and increased costs, the main online payment challenge for ecommerce companies is to increase trust on check-out with users so they can have a more regular sales cycle, without any “surprise” for each transaction that is being made.

ecommerce MENA challenge

Facebook is still the most important social media channel for ecommerce companies when it comes to sales and consumer engagement. However Instagram may become the leading ecommerce social media channel in 2016 with their ads format being implemented in the region.

ecommerce social media MENA

Beside social media, the marketing channel that provides the biggest boost to ecommerce sales is SEO. Ecommerce companies are not heavily reliant upon paid media and instead focus on SEO, social and email marketing to increase market share.

ecommerce MENA SEO

Entertainment and electronics are the largest ecommerce sectors in the region. Groceries however, could explode if major players make it a focus.

most popular good ecommerce MENA

At the end of the day, ecommerce is heavily competitive and multiple vendors fill each niche. This is why it is no surprise that the most important challenge for ecommerce companies is still to increase market shares.

ecommerce MENA challenges

More than sending out newslettsers or creating reward program or promotional offers, some of the best ways to increase customer engagement acquire more market share are:

  • Adding a human touch to merchandising: the online shopping experience would be much more desirable if it looked closer to being in a shop.
  • Creating useful content: we’re not only talking about product features and description, but more lifestyle content that can help the consumers project themselves with the product, once they buy it. We can imagine fashion ecommerce posing street style look books, or transforming a product demo into a demo using real people in real shopping situations etc…
  • Selling the benefits of the products, not the features: This will help a lot for SEO as people are searching for a solution to their needs, something that can be achieved by the benefits of the product you are selling.
  • Sharing customer reviews with a real face: customers reviews are already very powerful, showing the face of the real person behind the comment is even more convincing, especially when everyone is wondering about the possibility of fake comments/reviews posted by competitors.
  • Providing customer service through live chatting and video: this is the best way to show the customer they can gain your trust, making them feel more comfortable in their checkout when it comes to payment or products selection.
  • Launching an online influencers program: This means re-organizing your content distribution network and expanding your relationships with a select group of online content creators that have a powerful audience on their social networks wether Youtube, Instagram, Snapchat or their blogs.

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