8 MENA ecommerce predictions for 2016
This is an edited crosspost with LinkedIn.
What a year it’s been for ecommerce in the Middle East.
Launches of dozens of new startups; the growth of accelerators like AstrolabsME; M&A activity in food delivery with Rocket’s purchase of Talabat; rumors of IPOs in the payments space; and to top it all off, a massive $60 million round for Careem.
As I have said before ecommerce is here and growing in high double digits, and we’ve only just started the journey.
Now that we’re almost into 2016, I’ve outlined eight themes to watch out for in the coming year.
These predictions are based on over 100 discussions with investors, banks, payments processors, website owners and app makers across the region, news from tech events, personal observations of activity on LinkedIn, and, of course, my crystal ball I keep in my bottom right desk drawer.
Growth of mobile ecommerce We are seeing higher conversion rates for ecommerce sales on smaller screens, particularly from repeat customers. Look for this to grow as major ecommerce brands continue to improve their HTML 5 and app-based offerings.
‘Uberization’ of services What started off as ride sharing is now evolving to Uber-everything. From fitness-on-demand (Ubefit) to laundry-on-demand (washplus), startups are continuing to offer aggregation and on-demand services through frictionless experiences.
Slicker customer experience If you have your app store updates set to the manual setting, you’ll see an increasing number of regional retail, travel and services apps releasing faster iterations as a result of increased A/B testing, focus group, and improved analytics.
Big brands embrace ecommerce 2015 saw a number of major retail brands including Adidas, Ace Hardware and Choithrams launch web stores. In 2016, look for more brick and mortar companies to come online as they realize the customer demands for an omni-channel experience. It will be interesting to see how big brands deal with the regional challenges of scaling ecommerce.
Digital incentives will become the norm From banks to airlines to food retailers, incentives are increasingly digital to tap into our connectedness with smartphones and smart devices. 2015 saw a number of fitness and loyalty apps looking to engage with customers. In 2016, look for more digital offerings to appeal to millennials and an increasingly tech savvy population.
Domestic ecommerce grows faster than cross-border trade With the ever-increasing supply of merchants in the region, look for domestic ecommerce to grow fast, especially in markets like Saudi Arabia where entrepreneurship is on the rise.
Same day shipping becomes a key differentiator While the jury is still out on the differentiation of faster delivery for non-perishable items, look out for old (Aramex) and new (Fetchr) companies to work with major ecommerce companies to improve logistics. Similarly, several ecommerce sites are building their fleet of last-mile shipping to stretch that customer experience to your doorstep.
Globalization arrives in the Middle East With improving logistics and a cash-rich, young population, look out for global ecommerce companies to push deeper into the region with targeted offers, localization, and improved shipping.
Despite the political and social turbulence in the region, all signs are pointing towards an exciting year for ecommerce in the Middle East – agnostic of the price of oil.
With the population demographics, relatively limited competition, a plethora of new offerings by both big and small players, and proliferation of smartphones, 2016 will be a year to remember.