Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

E-commerce firms make moves on growth opportunities in KSA  Join our daily free Newsletter

MENAFN - Arab News - 20/11/2012

No. of Ratings : 0
Add to Mixx!


 


(MENAFN - Arab News) International investors are setting their sights on the Middle East's young but booming e-commerce industry, and particularly on the promising opportunity in the Saudi market.

Paypal announced the launch of its Middle East operations on Nov. 14, and three of the Middle East's largest online retailers - Namshi, Souq.com and MarkaVIP - have all raised rounds of funding this year for major expansion.
Namshi, a UAE-based online retailer focusing on fashion and footwear, has secured 20 million dollars from JP Morgan Chase and Blakeney Management; Marka VIP, the Middle East's largest flash sales site focusing on luxury goods, raised 10 million from multiple international venture capital firms; and Souq.com, the region's largest online retailer with a customer base of 8 million, secured 45 million end of last month from Naspers, a South African media company, and Tiger Global, a New York hedge fund.

Saudi Arabia is the top destination for these e-commerce businesses. It ranks second in e-commerce sales in the GCC, and more importantly represents the biggest retail sector in the region, with the promise of huge growth in e-commerce in the near future. The challenges and opportunities of building an e-commerce business in Saudi Arabia is one of the central topics that will be explored in depth at ArabNet Riyadh, the largest gathering of digital executives and entrepreneurs in the Kingdom, taking place on Nov.

20-21 at the Four Seasons Hotel. The forum will bring together more than 50 expert speakers and 600 attendees, and is hosted by the Badir Program for Technology Incubators, part of the King Abdulaziz City for Science and Technology, and supported by the Communications and Information Technology Commission of Saudi Arabia.

"Being able to capture the Saudi market is a critical success factor for e-commerce ventures in the Arab region," said Hassan Mikail, regional manager for E-Commerce at Aramex, which is the e-commerce partner for ArabNet Riyadh. "All eyes are on Riyadh, where the next phase of rapid growth will be in this sector."

Some of the main challenges facing e-commerce businesses in Saudi Arabia and the region more broadly are payment and logistics. More than 70 percent of online buyers in the region choose cash on delivery as their preferred mode of payment, straining the cash flow of e-commerce startups.

Cash on delivery purchases are 7 times more likely to be returned, according to Aramex, and this puts e-commerce companies at the risk of incurring extra shipping costs as well. Paypal's recent entrance to the market could help alleviate some of these issues and stimulate rapid growth in the sector.

Paypal's new Managing Director for Middle East and North Africa Elias Ghanem, said: "Paypal has big ambitions to help millions of Internet users to shop conveniently and safely online within the MENA region."

Beyond online retail, there are also tremendous opportunities for companies that can help existing offline businesses transition to the digital realm. Over 85 percent of businesses in the GCC have no online presence, according to Google; these businesses are losing out on the 66 percent of MENA Internet users who use the web to search for products and services.

Companies like Jeeran, a business reviews' site, and Fursaty, a group-buying site, are stepping in to fill the gap and providing merchants with their first glimpse of the benefits of going online and raising consumer awareness, further driving e-commerce in the region. Jeeran and Fursaty will be discussing the ways in which they are doing this at ArabNet Riyadh.

E-commerce markets in the MENA are evolving and the online customer base is rapidly expanding. Co-Founder and Managing Director of Namshi.com Hosam Arab said: "The Middle East region is finally ripe for e-commerce as governments ease restrictions on regional trade, logistics providers scramble to improve their services to e-commerce retailers and their customers, and investment funds pour into the sector after the emergence of a number of exciting regional success stories."

 






  MENA News Headlines


 
Live Currency Rates






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help