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).
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.
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