Businesses trying to break into the e-commerce space should use a combination of online and cash payment systems to win an initial customer base.
Cash still king for online retailers, at least to begin with
Businesses trying to break into the e-commerce space should use a combination of online and cash payment systems to win an initial customer base, Middle East retailers have said.
Tejuri.com, the online mall, hopes to create a popular virtual shopping experience with all the choice and none of the parking problems and launched with an even split between cash and online payment options before shifting towards the latter.
“This is multiple retailers co-existing in one place online, you can pay through credit card or cash on delivery,” said Ayaz Maqbool, Tejuri’s Managing Director.
“We have only been open five months. We have over 100 stores signed up, including Sharaf DG and Jumbo. We aspire to convert 25 per cent of the regional retail industry to e-commerce which is a big task but we are confident that we will deliver. It took us three years to build the IT infrastructure, the payment gateway and the hosting. We have the support of the Dubai Economic Department and we can build the trust of the consumers in the region.”
Visa saw the shift toward e-tailing early and three years ago bought CyberSource which processes online credit card payments.
“E-commerce is the fastest growing channel for Visa,” said Gups Jutla, Head of Business Development - CyberSource. “The growth in the MENA region is 30 per cent to 40 per cent but that is from a low base. One needs credit card penetration, and then credit card usage which means we have to get merchants to accept more cards without adding surcharges.”
The pace of growth of the industry across the region is attributed to more customers having the ability to pay electronically and the increasing trust in paying online for such things as air travel and concert tickets. However, vendors must keep IT and payment systems as up to date as possible.
“We have a web site and a subscription based newsletter,” said Peter Cooper, Editor & Publisher of arabianmoney.net. “We have been running for 42 months but there is a difference to a factor of five by the amount of people that sign up and the amount that pay, so only 20 per cent of the people that try to make the transaction actually go through with it. I think because our payment system is slow it scares people and they cancel before it finishes.”