Ninety one percent of customers across the MENA region purchased products online in 2022, according to a survey by checkout.com. Fashion and clothing constituted 46 percent of all online purchases with 1 in 5 consumers purchasing retail products online.
The number sees an increase from the previous year which was at 81 percent. This attributes to a rapidly developing ecosystem that allows government agencies, established companies and startups to flourish.
“This is particularly evident in payments, where governments have set up regulatory sandbox infrastructure and made it easier for businesses in the region with more flexible visa options and commercial licensing,” said Paul Carey, Executive Vice President of Cards & Payments, Al-Futtaim Group.
“If our nearly ten years in the region have taught us one thing, it is that it’s impossible to underestimate the potential, drive and dynamism which exists in this diverse and rapidly changing region. It will be increasingly important on the global stage,” said Remo Giovanni Abbondandolo, VP of Commercial, MENA at Checkout.com.
The pandemic although restricted people from dining out, led to an increased interest for home delivery services. Data shows that in 2022, consumers are ordering food online at a higher rate than observed before.
Over 53 percent of consumers in the MENA region purchased food online as compared to the previous year.
Online food delivery operations have various components functioning collaboratively for each transaction including restaurants, drivers, payment providers and more.
“Collaboration allows us to innovate effectively and to reach and serve society in its most inclusive sense. These days, one provider doesn’t need to manage all aspects of a consumer experience from A to Z. We all need to work together. This is the death of ownership,” said Ramzi Alqrainy, Chief Technology Officer at The Chefz.
Although an inevitable drop was observed in 2020 in the travel and live entertainment sector, the survey reveals that the sector is regaining momentum. Over 20 percent of customers have purchased entertainment services online in 2022 and 32 percent purchased travel services online.
“MENA has become a priority market for many of the world’s tourism boards as it’s a reliable source of long-stay visitors with excellent spending power,” said Alexandre Morin, Director of Payments – Risk and Fintech, Wego.
A rise in fintech apps have also been observed with 82 percent of customers reporting that they used some form of a fintech app in 2022.
“The secure, reliable, and fast movement of digital money between individuals, businesses and governments is the engine powering today’s global economy,” said Dr. Saeeda Jaffar, Senior Vice President and Group Country Manager for GCC, Visa.
Buy-Now-Pay-Later (BNPL) has also faced a rise in users in markets such as KSA and UAE with as many as 67 percent across MENA indicated that they may use it in 2023.
“Previously, retailers viewed BNPL as just another payment method and often compared BNPL services to other payment providers, resulting in downward pressure on rates. However, we see retailers increasingly focusing on overall growth, including marketing, customer experience and product maturity. As a result, we see a win-win, sustainable partnership model,” said Sargun Bawa, VP of Growth at Tamara.
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