E-Commerce has started to explode across the Arab World, with payment flexibility and logistics expertise helping to drive momentum.
The numbers don’t lie. The statistics in every available indices show a staggering acceleration across the Arab World of not only internet use, but of the subsequent, and perhaps more significant, purchase of goods and services through it. In the United Arab Emirates, e-commerce user penetration stands at 25.1 per cent, according to Arab Advisors. While in Saudi Arabia, 14.3 per cent of the entire population engages in e-commerce purchases, which represents 3.5 million citizens. Regional e-commerce, moreover, has grown at 300 per cent in the past two years. E-commerce, so much an integral part of contemporary consumerism in the West, is finally making its mark in the Middle East.
Underlining this point, there is a raft of new enterprises and initiatives springing up to capitalize on the trend. Samih Toukan, fresh from the sale of his Arab-language community site Maktoob to Yahoo, has poured all of his energies into Jabbar Internet Group, which include Souq.com and CashU.com, a marketplace and online payment facilitator respectively, believing that they have the potential to outstrip the successes of the company that was sold for a reported $164 million. Then there’s Dubai-based Nahel.com, which actually began life by trading through Souq.com, and recently launched its own site to sell over 10,000 IT and electronics products – not least the much-coveted iPad.
What these sites have in common, other than demonstrating the entrepreneurial potential of e-commerce, is that Aramex is using its logistics expertise to enable each of them to deliver the best possible service. Aramex has long been a champion of e-commerce, not least through the development of it’s own market-leading Shop’n’Ship service, and has partnered with companies to build efficient payment and delivery systems. To create the optimum infrastructure to kick-start e-commerce, Aramex has also created a dedicated team to work with the likes of Souq.com, Nahel.com, Shaadi.com, and others.
“We provide these sites with warehousing facilities to store their inventory, customs clearance services to expedite the clearance of goods at the main borders, and payment options to facilitate the whole payment process with buyers,” Iyad Kamal, COO of Aramex adds. “In addition to online payments, a lot of business is on a cash-on-delivery basis. So, we can actually manage this process for these e-commerce sites, with collection and billing and management.”
“In addition to our integrated logistics solutions, we have extensive experience in the region when it comes to facilitating online retail and we can lend that expertise to e-commerce entities,” comments Hassan Mikail, Regional Manager, E-Commerce Services. “We let them focus on their front end and we will do everything else - from order-processing to customer service, to call-taking, effective delivery and collecting the cash.”
It’s not just consumer traffic that Aramex is trying to develop. The company is also the co-creator, with Dubai Customs and Emirates Airlines, of a new “e-freight” paperless cargo system in Dubai, which will speed regional trade by enabling cargo operators, airlines and customs officials to exchange the required documents electronically. It’s all part of a drive to match the potential of regional trade with the power of the internet.
With online retail gaining ground in the Middle East and companies like Aramex facilitating the e-commerce process, it is only a matter of time before shopping online for most people in the region becomes as natural as going to the mall.
This article first appeared in The Navigator, Aramex's quartley e-newsletter.