Industry experts at the recent Visa MENA eCommerce Summit agreed that the sudden online boom during the pandemic was no temporary trend, but instead it indicated that the region has embraced the digital marketplace. The high-profile speakers also warned that businesses that do not get on board are doomed to fail.
Andrew Torre, Regional President, CEMEA, Visa, gave an overview of a pivotal 12 months for business in his opening address, revealing that a survey had shown 97 per cent of companies “tried something different during the pandemic to best serve consumers, such as selling online, introducing contactless payments or offering home delivery”. In explaining how businesses of all sizes responded to the crisis and changing consumer behavior, he said that small micro-businesses were able to adapt quickly and remain resilient because of their entrepreneurial mindset, while large eCommerce players and retailers recognized the need to deliver omni-channel experiences.
The third edition of the Visa MENA eCommerce Summit was held under the theme “Thriving in the New Normal” and brought together government representatives from the Dubai Department of Economic Development (DED) and Saudi Ministry of Finance, local banks such as Commercial Bank of Qatar, a range of leading eCommerce players and payment platform providers to explore opportunities to further drive digital commerce and help businesses thrive in the post-Covid era.
Even before Covid-19 hit, the MENA region’s eCommerce sector was witnessing significant growth of 15-20 per cent annually, outpacing other regions on the back of higher smartphone and internet usage.
The summit emphasized that small businesses now have the chance to expand their digital presence and extend their reach and sales – not just to recover sooner but also to capture future growth by investing in new digital technologies.
If an incentive were needed, studies show that merchants who adopted eCommerce in 2020 or invested in digital payment solutions were able to better survive the impact of the crisis than those that did not.
The UAE and MENA landscape
The summit took in a broad view of the regional landscape for eCommerce, highlighting the fact that the sudden consumer shift to online due to the pandemic has hugely accelerated growth, with the sector accomplishing almost six years of digital advancement in just six months.
Supporting this was significant recent regional data. For example, a survey published by the Dubai Economy, Dubai Police and Visa in June 2020 showed that since the outbreak, the majority (61 per cent) of UAE consumers preferred online payments with cards or digital wallets over cash on delivery (COD).
A similar survey by Saudi Payment and Visa found that 62 per cent of Saudi consumers opted for cards and digital wallets to pay instead of COD. Meanwhile, the Kuwait Banking Association and Visa survey revealed 51 per cent of Kuwaiti consumers used cards and digital wallets over COD.
A key speaker discussing the state of play was Mohammed Ali Rashid Lootah, Chief Executive Officer of the Commercial Compliance and Consumer Protection Sector DED. Its role is focused on protecting consumer rights and ensuring proper commercial compliance of all businesses in Dubai.
Lootah said that DED has established a public-private partnership with Visa to work closely with the private sector in increasing consumer awareness, driving them towards the right approach in eCommerce.
“We are also working to understand what the threats and challenges for eCommerce in the UAE are, how the government can take advantage of the opportunities, and how Dubai can be the right place for eCommerce start-ups in the region,” added the CEO.
He also revealed that a significant component of the shift in Dubai consumer behaviour is a growing trust in cashless payments and buying online. Though driven largely by Covid-19, he said this shift was one of the many opportunities Dubai predicted its transition to a smart city would bring.
Key UAE industry trends
Several important UAE trends were flagged though the summit, including the increase in e-commerce penetration, a rise in digital-on-demand services, further digitisation of F&B delivery services (restaurants and groceries), more businesses on social media linking to e-commerce stores – a trend that grew exponentially last year – and greater consumer awareness of blockchain and digital wallets.
The success of public awareness initiatives was highlighted too, notably the launch of DED’s Dubai Consumer app that provides services such as the ability to register complaints or comments regarding any commercial violation of consumer rights in Dubai.
Another trend is Dubai’s rise as a hub for international eCommerce players such as Amazon and Uber, creating an infrastructure highly appealing to start-ups and accelerators in the region.
Summit takeaways
Among many insights, the summit’s panel discussions highlighted the mainstream emergence of integrated commerce and the critical balance retailers will need to find between eCommerce and commerce IRL (in real life) to deliver the ultimate customer experience. “If eCommerce is to truly thrive, it must match the physical experience. 54% of consumers who have had a failed transaction when shopping online do not return. So, we need to ensure that the eCommerce experience is seamless and error free, and although we are making progress – there is still a lot to do,” said Andrew Torre.
Interestingly, Visa’s Back to Business Holiday Study in 2020 found that 45 per cent of consumers polled in the UAE plan to do more than half of their shopping online while 34 per cent plan to shop mostly in store or IRL. Panelists shared their experiences on new frictionless integrations merchants can introduce as part of their offerings such as curbside pickup and alternative contactless delivery options.
The consensus was that point-of-sale payments and financing platforms will undergo major transformation to ensure digital-first options become a preferred option, and the use of digital wallets will increase significantly in 2021, with the different modes representing tremendous potential across sectors that typically relied on in-person transactions.
What key players say
The virtual event also heard from several eCommerce company leaders offering their insights into how the market has shifted in the past 12 months and how they responded individually.
“During the pandemic, many customers were left with little choice but to turn to digital forms of payment to maintain distance,” said Marco Incalcaterra, Head of Technology at Noon payments. “We’re proud we could offer a 100 per cent contactless service with Noon, with everything from online payments to doorstep drop delivery taken care of swiftly, safely and efficiently.” He added that Noon is not only helping its merchants and other SMEs, but all customers to go digital. “Noon generated payment links that sellers could share via Whatsapp or SMS for customers to make payment, and for customers, Noon offered installment options.”
Mohammad Sajjad Bhojani, VP eCommerce and Digital at fashion platform Azadea commented: “Looking back internally and across the market, clearly those businesses that were prepared and already had digital, eCommerce and omnichannel capabilities were clearly far more resistant with the onset of Covid.
“These businesses including Azadea have of course found it much easier to scale and meet customers’ needs at this challenging time. Many businesses like ourselves and others looked to SAAS solutions (Software as a Service) to quickly provide customers with eCommerce solutions, and I believe the options available in the market now are so plentiful and often are SAAS – which provides agility, redundancy and results quickly.”
