The growth of the digital economy in the Middle East and North Africa (MENA) is not slowing post-pandemic. Quite the reverse. Our new research shows the adoption of digital commerce and payments has expanded and become more ingrained across the region.
Here we explore five data points from our new research that illustrate the growth.
Nowhere has ecommerce grown faster than in MENA over the past three years. And that trend continues. Not only are more consumers turning to ecommerce, but they’re also spending more time and money shopping in digital channels.
Our data finds that more than half of consumers shopped online at least monthly in 2022. Nearly 10% of consumers made online purchases daily—a 50% increase in the past year.
Consumer confidence in the Middle East remains high. Unlike those surveyed in Europe, the UK and US, MENA’s shoppers anticipate spending more online in the coming year. Consumers cite the travel, tourism, events and entertainment sectors as places they expect to increase their spending.
Cash is no longer king in MENA. Our research finds that 70% of consumers cite a digital payment method as their preferred option, up from 60% in 2021 to 40% in 2020—representing a 75% increase in two years.
There’s been an 11% decline in cash on delivery, with Egypt and Pakistan seeing particularly steep declines. In Saudi Arabia and the UAE, cash on delivery is nearly non-existent as a preferred ecommerce payment method.
At the same time, there’s been a commensurate increase in the take-up of new digital payment methods, such as digital wallets like Apple Pay and buy-now-pay-later (BNPL) options. Nearly one-in-five MENA consumers prefer to use such methods, almost doubling in two years.
In a region where cash was historically so pervasive—and held such cultural significance—the growth of digital payments is remarkable.
Consumers in MENA are among the voracious users of social media worldwide. Small wonder then that social channels have swiftly become the bedrock of online shopping activity in the region.
There’s been a 43% growth in the share of consumers who say they most frequently shop online through a social media site. Merchants are exploring different channels to reach consumers to capitalize on this opportunity. Some are going a step further, launching their own social platforms. ShopperON, for instance, launched a video platform that allows individuals to host live streams and stores to create and host their own branded channels.
Similarly, consumers continue to report a strong preference for shopping on marketplace platforms. Overall the data finds a significant appetite for marketplaces serving consumer demand for varied, cross-border retail optionality as well as for travel, luxury and food.
As Web3 emerges as a key component of the online experience, shoppers show a significant appetite for transacting on-chain, with a desire to be paid and to pay in digital currencies rather than solely in fiat.
More than half of those under 40 surveyed in the Gulf region felt that cryptocurrencies should be used for payments, not simply as an investment asset. Meanwhile, 25% of local merchants said they intended to enable crypto payments at their online checkouts by 2024.
We're also seeing local governments making significant strides towards providing clear regulatory frameworks to support the safe and effective use of digital currencies. So, when it comes to crypto payment adoption, watch this space.
Nowhere in the world did COVID-19 turbo-charge ecommerce quite like in MENA. The growth lines tracked through our reports since 2020 are a testament to this. Consumers have quickly adapted to the increased choice and rewarded merchants for their digitization efforts and investments.
Ecommerce is the gateway to a global market. Across the MENA region, consumers are shopping increasingly cross-border. And domestic and international brands alike have an opportunity to thrive in markets characterized by young, affluent, tech-savvy early adopters. Fortunately, consumers and businesses in MENA remain relatively insulated from the economic woes impacting much of the world. Consumer confidence remains very high, and the appetite for all things digital continues to grow.