Catching the MENA Online Trade Wave: Here’s the SME’s Guide

Local retailers that are active on the internet have opportunities to get ahead of their competition given the right logistics, fulfillment and payment partners. We examine the trends.
8 July 2021 | 109 Shares

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The huge rise in demand for online shopping during the COVID epidemic has proved a wake-up call for many retailers in the MENA region. All the trends pre-pandemic were pointing to increased importance of internet-facing commerce but the COVID-19 lockdowns have made the progressions exponentially faster.

According to Statista, nearly half of Saudis are now shopping online much more frequently. Furthermore, a MasterCard Economics Institute paper showed an increase of 20% to 30% in e-commerce in Egypt alone as a result of the pandemic.

Smaller e-commerce businesses in the region are stepping up their game. With local knowledge and an awareness of needs and trends on the ground, many have found themselves better placed than overseas merchants to adapt quickly to local pressures.

Additionally, many startups in the region are taking full advantage of the positives that digital commerce offers. New companies like Spotii, Tabby, and Tamara offer payment installments and buy-now-pay-later options. They join more established players like Namshi and Wasdi that have been bedding-in for 7 years, and MarkaVIP, a luxury brand selling to its many clients in the region (Kuwait, Manama and Dubai, for example) with high disposable income.

Combining the convenience of online retail and payment options is complemented by end-to-end logistics and fulfillment operators. Logistics major player Aramex has developed pay-later options to increase cart value and lower cart abandonment rates. The Aramex SMART pay-later options give retailers (startups or established brands) an average 33% lift in conversion rates by encouraging shoppers to by now and never miss a deal.

The company is also providing a delivery network that manages the sometimes-informal addressing systems used in parts of the MENA region. Aramex partnered with What3Words to use sophisticated algorithms to turn descriptive addresses into just 3 words and create the highest degrees of location accuracy for both e-tailers and their customers. Customers who use Shop & Ship, a popular service powered by Aramex to make international shipments easier for people living in the Middle East, will also be able to use their unique 3-word address to get accurate and instant deliveries.

There is a golden opportunity in the region for local retailers to explore with the support of Aramex to grow their businesses, reach, and revenues. Providing a positive customer experience is a critical element of brand loyalty and one that is improved on multiple levels on many brands’ behalf by choosing a logistics provider that can help at every stage of the journey.

Aramex International

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Creating the seamless customer experience is achieved by partnering with the right suppliers, from e-commerce to payment gateways, to delivery, logistics, warehousing, and more. Companies around the world that operate in the Middle East may have these facilities in-house, but they lack the speed, the local knowledge, and an awareness of local trends and needs that are where even the smallest operator can excel. To address all those needs and be sure that carefully-crafted customer experiences remain, most companies look to a local specialist as a supplier of choice.

Providing a smooth transition from browsing, to sale, to payments, followed by prompt fulfillment and convenient delivery – these are the building blocks of positive customer experiences that will turn one-off buyers into returning customers, and returning customers into brand advocates. Reliability and convenience are drivers of the recent e-commerce boom in the MENA region.

And while the upfront investment just a few years ago might have put many businesses off from taking the leap into digital commerce, that’s simply not the case anymore. Many startup businesses in the region are testing the waters by using the marketplace retail model, whereby multiple suppliers’ goods are presented via one overarching brand. Notable e-commerce player Noon is especially proactive in encouraging small startups to sell their goods online, with a local audience keen to shop locally.

Beyond curation of the customer experience, there are other aspects to successful operations. A McKinsey research paper highlights several issues for those retailers with an online presence in the region, including the need to pivot quickly in terms of offerings (discretionary purchases of high-value “luxury” items fell across the region during COVID, yet essentials’ sales rose), and stated that “brands must ensure sufficient delivery and fulfillment capacity. Stores may need to adjust delivery, speed and regularity of restocking, tap into new suppliers, extend delivery windows, and expand click-and-collect tools. Those actions may require more overnight in-store capacity, enhanced logistics (potentially through partnerships), and modifications to warehousing facilities.”

As one of the more complex areas of operations, logistics functions are probably the most challenging to develop and manage in-house. Successful businesses, therefore, use established players in this sector, those partners that come equipped with full warehousing, distribution, and fulfillment systems, ready to “plug into” a burgeoning business.

Key Takeaways