What do GCC retailers feel about the digital commerce transition?


January 31, 2021 | By RetailME Bureau

E-commerce

While the MENA region’s e-commerce sector was witnessing significant growth of 15-20% per annum even before COVID-19 – outpacing other regions on the back of higher smartphone and internet usage – consumers’ shift to online almost overnight because of the pandemic has accelerated that growth with the sector accomplishing almost six years of digital advancement in just six months. A survey published by the Dubai Economy, Dubai Police and Visa in June 2020, showed that since the outbreak, the majority (61%) 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% of Saudi consumers opted for cards and digital wallets to pay instead of COD. The Kuwait Banking Association and Visa survey revealed 51% of Kuwait consumers used cards and digital wallets over COD.

Madhur Mehra, MENA Head of Merchant Sales and Acquiring at Visa, said: “While most of 2020 was spent in reactive mode, the resulting preference for e-commerce is lasting. eCommerce leaders from the merchant community and financial institutions are in the driving seat in 2021 to capitalize on the momentum and continue to explore new technologies and innovations to support their customers. Small businesses in particular now have the chance to expand digital presence of their business and expand the reach and sales not just to recover sooner but also capture future growth by investing in new digital technologies. Our 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. We work closely with the industry, leveraging Visa’s expertise, innovative digital solutions and analytics, to support them in understanding consumer behaviors and expectations. By collaborating with our panel of experts we continue to foster a supportive ecosystem for businesses to unlock new commerce opportunities and develop low-touch commerce solutions.”

Mohammed Ali Rashed Lootah, CEO of Commercial Compliance & Consumer Protection (CCCP) sector, Dubai Economy, said: “A significant component of the shift in consumer behaviour we have been witnessing in Dubai over the past few months is a growing trust in cashless payments and buying online. Though driven largely by COVID-19 this shift has also proven to be one of the infinite and innovative opportunities Dubai estimated its transition to a Smart City to bring forth. As the pandemic struck Dubai Economy spared no effort in encouraging consumers to shop safe, and in enhancing their confidence in the purchasing process, while also protecting businesses and enabling them to stay connected with their customers. In fact, everyone in Dubai and across the UAE, including the government and the local as well as global private sector, collaborated to present a successful and evolving digital solution to an unprecedented crisis, and the outcome is an accelerated transition towards a digital economy. Dubai Economy is delighted to have Visa as our partners in promoting eCommerce as a competitive and convenient alternative, and we look forward to co-creating solutions that would empower Dubai and its community of residents and shoppers to thrive in the new normal.”

Yousef Al Harqan, Assistant Deputy Minister at National Systems, Ministry of Finance said: “The government of Saudi Arabia has invested heavily in the last 10 years in digital commerce and during the pandemic this investment has proven that it was worth it.

Government agencies were functioning well in terms of the supply chain, thanks to Etimad portal where government agencies can float RFP and receive proposals on line.

If you look at the spending versus the approved budget, we can see clear indication that the government agencies did overcome the pandemic and continued to achieve Vision 2030.” He also added: “I am a very optimistic person and like to look at the opportunities rather than the challenges, I think we have a very good opportunity with Vision 2030 to localize the technology and embrace the shift towards cashless communities. The government has done a lot in the last 4 years in the regulation and legal part of the fintech area (SAMA/Sandbox) and the investors have to make use of this thrilling environment.”

Karim Beidas, Founder of Kidzapp said“Historically, this region has been a little more reluctant to shift to online payments, and we’ve seen that at Kidzapp in how parents respond to paying for kids activities through the app vs. booking for the same experience but preferring to pay at the venue. Prior to the lockdown, around 20% of our parent users had some form of reluctance in paying online / through our app for an activity – even with all the advantages of convenience and savings they get from doing so.  We’ve found this has shifted since the lockdown, as more and more parents have gotten used to online payments that were necessitated during the lockdown. There is still a little reluctance but we estimate that as many as 50% of those who would historically have been reluctant are now, if not 100% comfortable, at least transact online habitually now.”

Marco Incalcaterra, Head of Technology, noon payments, said: “Noon.com was created to serve and support people and businesses in the Middle East, this is our mission. We have rapidly built deep native capabilities in our marketplace, fulfillment, logistics, and payment platforms, growing to become a digital ecosystem of products and services, all developed to enhance the everyday lives of customers and give producers access to wider audiences and tool to help their businesses thrive. During the pandemic, many customers were left with little choice but to turn to digital forms of payment in order to maintain distance. We’re proud we could offer a 100% contactless service with noon, with everything from online payments to doorstep drop delivery taken care of swiftly, safely and efficiently.”

“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 to quickly provide customers with eCommerce solutions, and I believe the options available in the market now are so plentiful and more often than not are SAAS – which provides agility, redundancy and results quickly,” said Mohammad Sajjad Bhojani, VP eCommerce and Digital – Azadea.

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