During the review period, e-commerce remained the fastest-growing distribution channel in MEA. This trend was driven by increased consumer demand for convenience, which prompted the diversification of retail strategies. Besides, low penetration of online formats attracted new entrants, while diversified offerings gave room to niche categories. This regional brief covers dynamics in e-commerce across the region, with the forecast period highlighting the impact of coronavirus (COVID-19).
This report comes in PPT.
E-commerce expanded aggressively in MEA in the review period, despite an apparent digital divide between countries. The channel’s performance was supported by improved internet penetration, fintech innovations, extended offerings and intensified promotional campaigns. However, as the COVID-19 pandemic took hold from late 2019, key players were increasingly concerned by potential disruptions in cross-border activities.
Niche categories such as food and drinks continued to rise, driven by chained outlets which leveraged multichannel approaches to mitigate the competitive pressures. The move also led to a rise in click-and-collect options, a strategy that attracted new users across emerging markets. Nevertheless, apparel and footwear remained the largest category in MEA, supported by momentum gained in the Middle East.
The influx in affordable smartphones drove mobile-centred strategies, giving room to interactive shopping apps and improved client engagements. The shift was noticeable across developing countries such as Nigeria and Kenya, where a limited number of households have access to PCs and tablets.
COVID-19 is expected to reshape shopping behaviours, as e-commerce is attracting new users seeking to adhere to social distancing measures. This trend will be consolidated by enhanced digital infrastructures and improved safety in payment methods. Nonetheless, the region could still lag compared with developed markets due to the prevalence of traditional retailing.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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