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Digital Commerce in the Middle East and Africa

August 2019

The Middle East and Africa recorded significant e-commerce growth, with improved digital and payment infrastructure. Adoption of digital wallet has also been stronger than some Western markets. However, digitisation is still uneven and while GCC consumers have some of the highest levels of connectivity and smartphone penetration, South Africa still need to catch up. Betting on retailing, introducing cheap smartphone and investing in the digital infrastructure are expected to help bridge that gap

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Key Findings

MEA among top performers in terms of growth

The Middle East and Africa grew from a low base in terms of digital commerce value sales compared to other regions, but the region ranks high in terms of historic and forecast growth. While a clear division exists between the Gulf and African countries, the improvements in terms of connectivity and digital infrastructure, as well as successful partnership between international e-commerce players and local ones, have helped narrow the gap.

Retailing dominates digital commerce in terms of growth

Retailers’ greater presence online and competitive offers lead the industry and experienced the higher growth in digital commerce in the Middle East and Africa. Partnerships with major local retailers with payment and telecom companies have also positively impacted greater consumer awareness and trust in purchasing on the online retailing platform.

Rise of mobile commerce

High levels of connectivity and smartphone ownership, coupled with high purchasing power and affluent lifestyles particularly in the Gulf, contribute to the increasing influence of mobile in digital commerce. In South Africa, the launch of cheap smartphones and featured phones with smart functions have converted a large proportion of consumers from PC to mobile for digital commerce. Mobile retailing apps as well as banking apps, social media apps and offers received via smartphones are influential factors.

Digital wallet will help proximity payment take off over the forecast period

Major digital wallet providers have partnered with wide range of local merchants to enable consumers to pay via their phone. The movement that started as a means of financial inclusion for the unbanked population in rural areas in Africa and today associated with convenience in the Gulf region will help proximity payment take off over the forecast period.

Introduction

Scope
Key findings

Regional Overview

Digital commerce in MEA set for strong growth
Digital commerce growth fuelled by rapid digital adoption
Gulf countries drive digital commerce growth
African countries lag behind
Transport dominates, but retailing grows faster
Mobile remote purchase goes mainstream
Retailing leads proximity payments
Proximity payments exclusively made via mobile

Forecast Projections

Full potential to be released over the forecast period
Remote payments drive growth
Regional divisions persist
Transport and retailing will remain at the top
Mobile growth will overtake PC
Retailing and transport will lead proximity payments
Payment through wearables expected to remain negligible
Voice commerce will gain traction at a relatively slow pace

Country Snapshots

South Africa: market context
South Africa: digital commerce landscape
United Arab Emirates: market context
United Arab Emirates: digital commerce landscape
Saudi Arabia: market context
Saudi Arabia: digital commerce landscape
Turkey: market context
Turkey: digital commerce landscape
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