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What the rise of E-Commerce in the Middle-East really means for retailers and brands

9 September 2019

Too many Brands, retailers, and businesses in general, looked at overall market performances and saw what we all did: the market share of E-commerce is still low in the GCC (3% of the total retail sales in the GCC / 4.2% of the total retail sales in the UAE, the most developed E-commerce market) so there is room for growth and one day it might reach the ≃15% retail sales penetration observed in China, US or UK. 1

We looked as well at:

  • Growth Figures (35% CAGR 2 – Period 2015-2020),
  • Internet Penetration Rate (90% of the GCC population is an internet user 3 ),
  • Smartphone Penetration (79% of Saudi’s population uses smartphone, it rises up to 91% in the UAE, Kuwait saw its smartphone penetration double in 2 years to reach 86% 4 )
  • Time spent online daily, social media penetration, etc.

So brands launched their own local E-commerce websites, or looked for distribution on 3rd party platforms, while retailers invested millions in developing their own market places. Don’t’ get me wrong, I am not judging on the relevancy of those strategies or doubting about the commercial successes of those decisions.

We simply often overlooked that E-commerce is most and foremost transformative, not just to business but to culture and society as well. It will force classic retailers and brands to rethink their narratives, to create bridges between their traditional distribution network and their online presence, by reaching differently to their customers, online and offline, and by adapting their messages to each platforms, demographics and users.

Those transformations will affect the businesses by creating new models, offering new growth opportunities for brands & retailers, in new market spaces.


1 https://www.bain.com/insights/ecommerce-in-MENA-opportunity-beyond-the-hype/

2 http://www.alpencapital.com/downloads/reports/2019/GCC-Retail-Industry-Reports-April-2019.pdf

3 https://labs.ripe.net/Members/chrisb/ripencc-saudiarabia-report-jan2019.pdf

4 https://www.advansoft.ae/blog/smartphones

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VEM CONSULTING acknowledges that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented in this article. The information represented is based on information researched from various sources on the internet. We are not liable for any errors, financial loss, or damages of any kind that may result from the use of, or reliance on, the information herein.