Register for our free newsletter

 
 
Latest News

Massive potential for e-commerce to thrive

Ahmed Alkhatib, founder of MarkaVIP, says the Middle East region is not particularly optimised for e-commerce.

June 27, 2013 11:47 by



A lot has been said about the e-commerce industry in the Middle East; it’s the world’s fastest- growing market, internet penetration is incredibly high and online payments are safer and on the rise.

Last year, it was predicted that cash on delivery (COD) – which constituted roughly 70 per cent of online transactions in the region – would begin to die out as customers turn to the comfort and convenience of online payments. And yet, during a panel discussion at ArabNet’s Digital Summit, we were told that, contrary to expert opinions, cash on delivery now represents 75 per cent of online transactions.

How is it that, with an average internet penetration of 40 per cent in the region (compared to a global 34 per cent), customers still prefer an arguably old-fashioned model such as cash on delivery?

“I don’t think it’s necessarily an increase of interest in COD, but an interest in shopping online,” says Ahmed Alkhatib, founder and chief executive of one of the region’s largest e-commerce players, MarkaVIP.

“What you’re seeing is a massive exodus of people who would normally shop offline that are now shopping online.” Alkhatib, who founded the company back in 2010, adds that customers tend to use cash on delivery for the first few purchases, at least until trust can be built.

After the first couple of deliveries, they realise that paying online is much more convenient, he says.

“With online payments, I think it’s going to be a natural progression,” he explains. “As companies like us mature and become household names in the market, people will trust our services. It happened in the United States and Europe, and it’ll happen here.”

Alkhatib says that, when the company was first launched, he quickly realised that the region, particularly from an infrastructure perspective, was not logistically optimised for e-commerce. There were (and still are) many barriers to entry; laws on imports, cross-border transportation and customs laws.

However, given that all the existing major players have managed to overcome these barriers, he believes in the massive potential this region has to offer.

“I think the industry will grow tremendously over the next three to five years,” he says.



Tags: , , ,

Capture

Video: What are the latest automotive trends?

Carmudi reveals all

June 28, 2015 2:54 by
 
Capture

Sharaf DG to attract businesses

If you own – or are part of – an SME, you’re in luck

June 23, 2015 12:45 by
 
Capture

Video: Football legends to come to Dubai?

Marka’s CEO, Nick Peel, reveals all...

June 17, 2015 5:30 by
 
vid

Video: 3 major steps to grow your customer base

Tiffany & Co.’s Stephane De Palmas reveals all at arab luxury world

June 10, 2015 4:00 by
 

TV

Rss More TV  
 
Plane Flying Low Over Rough Water

Video: What would you do if the plane you’re on loses control?

Click to see what Paris Hilton did

June 30, 2015 1:28 by
 
Capture

Video: What are the latest automotive trends?

Carmudi reveals all

June 28, 2015 2:54 by
 
du1

Kipp’s favourite YouTube video of the week

Click here to watch

June 25, 2015 3:00 by
 
phoen 1

Video review: Samsung Galaxy S6 Edge

Thinking of buying it? Watch this first

June 24, 2015 3:27 by
 
Capture

Sharaf DG to attract businesses

If you own – or are part of – an SME, you’re in luck

June 23, 2015 12:45 by
 
Capture

Video: Football legends to come to Dubai?

Marka’s CEO, Nick Peel, reveals all...

June 17, 2015 5:30 by
 
EROS GROUP_Superbrands Brand of the Year 2015

Eros Group wins Brand of the Year

A total of 55 labels were recognised as Superbrands

June 16, 2015 4:22 by
 

Leave a Comment