Five Must-Haves for Igniting e-Commerce in the Arab World

by Mo Ali Yusuf, January 18, 2012

On the backs of several successful e-Commerce companies, an increasing number of entrepreneurs are launching online businesses. However, the region lacks basic e-Commerce infrastructure, a fact which hinders growth potential in the space.

There are many proclamations that e-Commerce has arrived in Arabia and that we should expect to see local versions of e-Commerce juggernauts such as Amazon and eBay in the near future. We are seeing the popularity of websites such as and Dubizzle grow every day, and with the introduction of many regional ‘daily deal’ sites, it seems that consumer trust issues with online shopping are dissipating. E-Shopping also seems to present an exciting opportunity for everyone from ‘mom & pop’ shops to large businesses to compete on an even playing field.

In more developed markets, launching an e-Commerce company is simple.   Registering a company costs a few hundred dollars. Turnkey websites offer e-Commerce solutions out of the box for peanuts. A number of payment solutions offer cheap, cost-effective ways to collect money. Customer service is offered, measured, and valued. Shipping is simple and often free!  All of these factors minimize the start-up ‘risk’ factor for a new entrant, and allow small stores to successfully compete against the big giants. For example, a friend of mine runs a successful online cheese company (seriously) out of small town USA, and does a modest $1 million USD per month in sales.

Here in the region, the potential to create similar success stories exists; however, the effort and high costs required to design and launch a new venture have become insurmountable barriers. Furthermore, the lack of proper infrastructure makes it very difficult to get past the idea phase, which further stagnates the entrepreneurial economy.

Here are five e-Commerce related infrastructure shortcomings presently found in the region:

1. Payments:  Accepting payments on a website can be a huge ordeal. Choices include credit card, prepaid cards, cash on delivery, PayPal, etc. Getting a merchant account and payment gateway in the region is extremely expensive and probably greatest inhibitor.  Sites like PayPal can be used, but having earnings transferred locally is a challenge. Regional payment gateway charge very high pricing to riskier e-Commerce companies, and demand a $25,000 or more deposit. Other regional payment companies such as CashU offer a pre-paid solution, is still inconvenient for the experienced shopper.

What’s Needed: An online payment gateway that offers online merchants the ability to accept credit and debit transactions with fair pricing.

2. Logistics (Shipping& Inventory): Finding a restaurant in Dubai or Riyadh can be a nightmare at times. Finding a residence address is frighteningly worse. Coupled with the cost of shipping goods, the economies of scale of an e-Store are diminished for cross-border sales. The lack of a proper, cheap shipping solution is still needed, although Aramex is making inroads. Also missing in the region is the concept of ‘drop-shipping’, where a supplier / distributor ships directly from their warehouse to the customer, thereby eliminating the need for a merchant to keep inventory.

What’s Needed:  Simple, affordable and reliable order fulfilment services specifically tailored for e-Commerce purchases.

3. Design  / Development:  Arabic is a beautiful language. Unfortunately, Arabic text on a website requires mirroring (from right to left), which is much easier said than done.  It requires custom website interface design, not only language translation.  Turnkey e-Commerce solutions such as Shopify do not offer an Arabic version, therefore requiring companies to build websites from scratch.   Having a website developed from scratch leaves entrepreneurs with the off-shoring route which can lead to poor quality and lack of Arabic knowledge, or a few remaining local agencies which can prove to be costly.

What’s Needed:  A method to display an English website in Arabic (or vice versa), while keeping the inherent structure intact.  Alternatively, more bilingual web design and development companies in the region are required, with both pricing and talent that remain competitive with the larger agencies.

4. Customer Service:  Modern day business gurus view ‘customer service’ as a mindset rather than a process. It goes a long way to build shopper trust and brand loyalty.  My personal experiences vary in the region. For example, a popular daily deal portal offered an immediate refund for a bad spa experience, while another ‘click and mortar company’ who was unable to find the history of a specific online transaction that I made from their e-Store despite days of searching.   

What’s Needed:  A realization that each online customer is valuable to the bottomline and the reputation of a company – whose residual value increases after a successful sale. Investing in customer service through all channels (phone, email and social media) is paramount. A memorable customer experience will increase brand loyalty and trust and result in multiple referrals.

5. Legal:  Forming a company in the region is difficult and labour intensive due to the complexities of navigating local partners, free zones, employee visas, and license types. The cost of a business license can run into the tens of thousands with expensive annual fees, sometimes forcing businesses to register offshore.  Furthermore, in many regional countries, the laws around consumer protectionism, transaction disputes and fraud protection for online transactions are   not well defined or supported.

What’s Needed:  A country-specific or regional policy for online transactions.  Rules are needed to protect the customer.  Also required is a specific business license that is cost-effective, that would allow entrepreneurs to setup companies with limited investment.

Aside from the fifth point, the previous four areas highlight challenges that are also opportunities for business creation. Each challenge is a successful industry on its own in North America, Europe and Asia.  These five elements need to be put in place before we will see the region achieve its true potential, and yet if the current momentum can be turned towards building solutions, the industry will be well on its way. 


Mo Ali’s passion for tech started much like the moment of revelation in the Matrix movie. Since his first computer at the age of 10, something about a black screen with green font just appealed to him. Since then, he has developed a passion for e-Commerce, payments, and anything disruptive. You can connect with him on Twitter at @moaliyusuf or on his LinkedIn profile.

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Anas Alshanti , Mon 23.01.2012
Dear Mo,

You can actually withdraw money (Previously Moneybookers) directly to your bank account. check them out, they are true global online payments solutions.

Anas Alshanti , Sat 21.01.2012
Great article; I think this is the right time to seriously think about finding solutions about issues that you have mentioned, and maybe i can help add some value here:

1- Payments:

PayPal: You can only withdraw money from your PayPal account to your Credit Card, the amount you can withdraw depends on your account limits, of course once you account is verified by PayPal they should lift those limits, generally you can withdraw $500 on daily basis and you will charged $5 per withdrawal initiated by you, for more information visit

2- Skrill / Moneybookers (Previously): They are my favorite payment processor :) you can think about them as a global payment solutions provider, they allow you to withdraw money from your eWallet directly to your Bank Account, and this is a big +, of course like everyone else your merchant account will have sending and withdrawal limits, these limits can be lifted to a No-limit account once you are verified, to know more, visit

With regards to local payment gateway providers, no offense, but are you kidding me!

Important note: i am not talking about CashU nor OneCard (both are little expensive from a merchant perspective but very well-respected solutions)

About logistics; drop shipping is great when we are talking about large companies or distributors with large volume of goods in a large country, but for smaller companies this might not be an ideal solution, some would argue that a Shared-Drop-Shipping-Facility might work for midsize companies, but generally requires a very advanced inventory management network solution. If you are on about cross-border selling, shipping should be your priority concern, it's customs and duties - levied by the destination country - we should be worried about.

Arabic language is an integral part of the success of any e-commerce project in the middle east but it would take some time before "Standardizing Arabic e-commerce language" across all e-commerce websites in the region, meaning; to create a standard language and translations for e-commerce related content such as product naming, category and specifications

I would like to mention my friends a they are creating a new technology for translating websites to multiple languages instantly, check them out!

having said that, we will be soon launching our website which is an e-commerce shopping marketplace tailored for the Middle East.

Dokkankom allows individual sellers, midsize merchants and product manufacturers to sell their products online locally, regionally and even internationally without having to worry about software installation, configuration or managing servers, we handle the technology so merchants can focus on running and growing their online stores.

Have a great day everyone!

Anas Alshanti
Mo Ali Yusuf , Sun 22.01.2012
Thanks for your insights Anas. The biggest problem with global payment providers (e.g. PayPal) is you cannot withdraw money into a local bank account which creates all sorts of issues with money transfers, AML, etc. We are working on a comprehensive guide to payment processing in the region - please look out for this.
Firas Khalifeh , Fri 20.01.2012
thanks you,
it is really useful.
you mentioned in the first point to work with 3rd party payment provider.

have a question, how could I get a advice about where to start in payment issues. i had read a lot about. but still have no CLEAR solution.
i am a Syrian based. and you know about the embargo on Syria.

so my plan is to open a bank account in Lebanon or Jordan and then create account !!
what do you think ??
Hichame Assi , Thu 19.01.2012
Thanks for the article... very insightful.

You should monitor the progress of ... it will resolve 4 out of 5 of these items, and reduce the headache for all retailers. Watch this space!
Hassan MIKAIL , Thu 19.01.2012
Sounds exciting Hichame. Let me know how Aramex can help...we've got some goodies that can make your baby fly....
Hassan MIKAIL , Thu 19.01.2012
Good snag list and it's only missing one thing: all the above needs to happen;however, if the big local or regional brands & traders don't get online, then we still need to get in line at their retail points (smiley face).
Mo Ali Yusuf , Sun 22.01.2012
Excellent point Hassan. But we can't wait for them forever :)
Anas Alshanti , Sat 21.01.2012
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