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The Future of Ecommerce in Middle East and Asia

Electronic commerce is still in its early stages in the Middle Eastern and Asian countries but we can say that the countries in this region have a bright future provided the circumstances are favorable in coming years. The issues that ecommerce is facing in Middle East are no different than what we see in other regions of the world i.e. privacy concerns, poor infrastructure, lack of payment and delivery options, payment security, high costs of logistics and overall environmental factors that don’t support e-services. According to eMarketer, e-shoppers will spend around USD20bn this year on buying online in MEA region making it the smallest ecommerce market in the world but the growth is faster more than twice as compared with the rest of the world.

mea-internet-penetration

The graph shown above demonstrates that the highest number of internet users in MEA region is found to be in Saudi Arabia. But you’ll see the highest internet access in UAE and Qatar. The most prominent factor that led to the progress of ecommerce in MEA is the websites offering group buying. The top selling products in the region include: clothing, accessories, books, airline tickets, software, hotel reservations, games, and computer hardware.

internet-population-mea

Internet access and usage is one of the major hurdles that hinder the growth of ecommerce in Middle East and Asia. The graph shown above is the result of a study conducted by Internetworldstats and it very well demonstrates that the number of internet users has almost doubled over the years ranging from 1.15bn to 2.27bn.

mobile-penetration-mea

The use of mobile phones has also increased in Middle East and Asia and according to a research for households; broadband access levels will reach 38.5% by the end of 2014. The internet penetration levels for the same will increase to 60% by 2015. Undoubtedly, this much increase in broadband penetration will lead to more techno savvy customer base within Middle East and Asia domestic ecommerce market and the connected infrastructure movement will be at full force in near future.

When it comes to payment issues, Middle East and Asia are the regions that are coming from cash oriented society so it will take some time to become an electronic payment society. One of the major factors of e-payment adoption is security when paying online. There has been a number of card payment frauds reported in UAE. Considering these insecurities, the ECC-Net advises customers to pay through Master Card or Visa. Another successful payment method recently introduced by the government of Qatar is Hukoomi and this method has been awarded the best government electronic payment in the Arab region.

When we specifically focus on India and Pakistan in the Asia region, we come to know that ecommerce is growing at a slow pace in these countries but in India the progress is speedier. The reason is that Indian government supports the online infrastructure and foreign funding maintains the availability of low cost resources so we can hope to see a better future in online retail sales.

Although the current status of ecommerce is not exceptional as compared with Europe and USA but domestic and international retailers are investing more in Middle East and Asia. Mostly multi designer online malls like Ezhopz are created that offer multiple brands on one place and this is necessary to support the small business owners in the region who don’t have a huge investment to create their own mall separately.

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