x Abu Dhabi, UAETuesday 23 January 2018

Transactions have accelerated for the logistics firm as the Mena region embraces mobile transactions and credit card use grows.

Aramex's e-commerce grew 300 per cent last year compared to the year before. Silvia Razgova/The National
Aramex's e-commerce grew 300 per cent last year compared to the year before. Silvia Razgova/The National

The logistics firm Aramex said yesterday that its e-commerce business had quadrupled in the past two years, driven by growing mobile transactions and higher levels of credit card use in the Middle East and North Africa.

“For us e-commerce grew by 300 per cent in 2012 compared to 2011 spurred by new websites coming online, more consumer adoption of online purchasing, people having fewer security concerns,” said Hassan Mikail, the global director of e-commerce at Aramex.

“Also credit card penetration plays a huge part. Over 50 per cent of the traffic on our portal is mobile now and people are paying from their mobiles. We are changing our entire platform to responsive design to accommodate mobile because the old websites are flat, the new websites shrink and fits a mobile to meet consumers’ needs.”

According to Elias Ghanem, the managing director of PayPal Mena, the region’s online commerce market grew 29 per cent to US$9 billion last year from $7bn in 2011 and it is forecast to grow to $15bn by 2015.

Travel, including flights, electronics and IT are the most active sectors for online transactions. However, with an estimated 65 per cent of the region’s population aged under 30 that is expected to change, according to PayPal’s Insights report.

In 2012, there were more than 30 million people shopping online from a potential pool of 110 million internet users in the region, a 65 per cent increase on 2011, the report said. Consumers are more confident buying online, especially as more international retailers establish Mena e-commerce strategies and with the exponential growth of mobile phones.

However, the region’s preference for paying with cash on delivery (COD) has hampered the e-commerce bandwagon up until now, with 80 per cent of all online purchases made via COD, which is costly and time-consuming for retailers and customers alike, according to the report.

“We began three years ago when there was no e-commerce in the region,” said Sohrab Jahanbani, the founder of the group deals site Go Nab It and now the chief operating officer of the online retailer MarkaVIP.

“I think we are seeing that change very rapidly now. As PayPal comes into the market and online payment becomes more established, all the key facets are in place with regard to bandwidth, amount of devices etc, we just need the supply side to kick in and that’s is what is happening right now.”

PayPal’s Mr Ghanem added: “The mobile commerce train is leaving. If you haven’t got a ticket yet, it just may be too late”.