By: Mahmoud Gamal
Dubai - Mubasher: It is clear that e-commerce is expanding in the Arabian Gulf region, with more investments being poured in the sector.
In 2017, we saw the acquisition of Souq.com by Amazon, as well as the launch of noon.com by Emirati businessman Mohammed Al Abbar.
Some analysts and retail experts believe that competition will only be fiercer in the e-commerce market in the upcoming period, with more opportunities for growth as well a huge potential for a strong future for the entire industry in the region.
Economic expert Wadah Taha believes that launching noon in this time indicated the strong appeal of the sector, adding that launching more e-commerce could help reduce costs, which would lead more companies to invest in the sector, as it requires less space and labour.
Taha also expects that demand would surge from the companies of the transportation sector that will see a boom on the back of these electronic platforms, as it is dependent on logistics and sticking to delivery times and deadlines, as well as adhering to quality standards.
The competition between Amazon and Noon will help to widen the base of the sector in the UAE and the entire Gulf region, according to Bassel Abou Taema, economic advisor.
Abou Taema also noted that these electronic platforms is more likely to use digital currencies such as bitcoin and ethereum, which attracted a lot of attention regionally and global in the recent period.
E-commerce expert Mazin Al Darran also stressed the advantage these sites or platforms enjoy, especially the guarantees they offer to their customers, which helps in enhancing the customer’s confidence and increases its credibility, leading to higher sales volumes.
The e-commerce industry in the member countries of the Gulf Cooperation Council (GCC) is expected to reach $20 billion by 2020, according to a recent study, by AT Kearney, a global management consulting firm.
The sector recorded sales of $3.8 billion in 2015, and then $4.8 billion in 2016, and it is expected to grow in the UAE to AED 36.7 billion by 2018.
It is worth noting that the marker saw more acquisitions recently, as letstango announced in July signing a strategic partnership agreement with Air Miles.
The report also noted that the lean towards e-commerce in the region reached the biggest of companies, which led Emaar Malls to acquire a majority stake in Namshi.com.