By: Mahmoud Gamal
Dubai – Mubasher:
E-commerce giant Criteo is looking to expand its operations in the GCC, a top official has said, indicating that the e-commerce business has grown significantly on the back of smartphones.
Saudi Arabia’s e-commerce market is expected to grow by around 15% in 2018, Criteo managing director for the Middle East and Africa (MEA) Michele Iozzo told Mubasher in an exclusive interview, projecting similar growth rates for 2019.
“We see smartphones becoming the central device of our lives connecting the physical and digital world. Mobile penetration rates in the region are among the highest globally, with both UAE and Saudi Arabia ranking in the top three,” she said.
Based in Paris and listed on Nasdaq Dubai, Criteo was founded at a start-up incubator but has grown to become an e-commerce marketing leader using machine-learning technology, data, and performance at scale, and measurable ROI for its clients. With around 2,700 employees and offering services to over 17,000 clients across the globe, Criteo’s annual sales exceed $550 billion per annum.
Below is Mubasher’s exclusive interview with Criteo managing director for MEA Michele Iozzo.
Mubasher: What is the current position of e-commerce in Saudi Arabia and the GCC?
Michele Iozzo: E-Commerce in the region is at an exciting cross-road. Some years ago, people doubted the potential of e-commerce here while referring to the regional culture of going to the mall to shop. Nowadays, the challenge is for physical retailers to adapt to the new needs and expectations of increasingly digital consumers. Big players like Souq (an Amazon company) and Noon invest heavily in e-commerce and thus set high standards for the whole industry, which increases the need for others to innovate and adapt. This can only be positive for the region.
Mubasher: How much is the E-commerce market size in KSA expected grow in 2019, and over the next five years?
Michele Iozzo: The e-commerce market in Saudi Arabia is expected to grow 14.7% to $6.360 billion in 2018, according to Statista. I expect e-commerce to further grow at a similar pace in 2019 and beyond for two main reasons. First, we see a growing number of users visiting the e-commerce websites of our Saudi clients and we expect this trend to continue. And second, users are getting increasingly accustomed to shopping online. The smartphone has become the central device of our life – we organise everything here and shopping is no exception. With very high mobile penetration rates in Saudi Arabia, this means a huge opportunity for e-commerce players in the region.
Mubasher: What are the challenges for e-commerce growth in Saudi Arabia and the GCC?
Michele Iozzo: Consumers in the region favor cash payments on delivery rather than credit card payments when buying online. Business-to-consumer (B2C) websites must overcome this challenge in order to significantly increase market share. It is a lot about educating the customer to generate trust in new payment methods. Also, delivery times and options are still limited. The fastest delivery option is the next day, whereas international players often offer same day delivery and/or delivery within a few hours.
Mubasher: What are the mains factors working in favor of e-commerce growth in Saudi Arabia and the GCC?
Michele Iozzo: We see smartphones becoming the central device of our lives connecting the physical and digital world. Mobile penetration rates in the region are among the highest globally, with both UAE and Saudi Arabia ranking in the top three. That is the main reason for the success of e-commerce.
Our numbers show that smartphones could be the key driver of e-commerce not only globally, but also here in the GCC. Moreover, mobile shopping apps meet the demands of today’s mobile users better than anyone else, as they shop more on apps and also for higher values as compared to browsers. The GCC is at the forefront when it comes to shopping apps, ahead of Western Europe and even the US.
Mubasher: What are Criteo’s growth and expansion plans in Saudi Arabia and the UAE?
Michele Iozzo: We have ambitious plans in the region, and that is why we have moved to a bigger office in Dubai at the end of 2017. As the advertising platform for the open internet, we aim to provide our clients with multiple solutions to help them achieve their business goals from generating awareness to driving sales. To share two examples: online travel company Flyin.com generated 811% more revenue with Criteo, while sports retailer Sun & Sand Sports improved conversion rates by 149% while reducing their cost of sale by 80%. Our aim is to build on this and help other players with their individual challenges.