PayPal to set up shop in Dubai with view to double Mideast market share
It is the fourth US internet giant this year to boost its activities in the Middle East and North Africa (Mena), following moves by Facebook and LinkedIn to open offices at Dubai Internet City, and Twitter's appointment of a local sales representative.
"We are currently looking for offices and will open one in the next few months. It will be the hub for the region," said Elias Ghanem, general manger of PayPal Mena, at today's launch of its Middle East operations.
PayPal currently claims a 5 per cent share of the Mena e-commerce market. It says it aims to double this to 10 per cent within the next three years, by building up its merchant base and encouraging users to choose its service over cash on delivery, which accounts for 80 per cent of the market.
PayPal has partnered with local logistics company Aramex to support its Shop and Ship service, enabling customers in the region to receive goods purchased abroad.
Last year around $9bn worth of e-commerce transactions were completed in the region, PayPal said. The GCC e-commerce market is worth $8bn alone, making up 0.75 per cent of Saudi Arabia's GDP and 0.7 per cent of the UAE's GDP, according to figures by the entrepreneurs' website Wamda.
According to Mr Ghanem "an extremely high majority" of the e-commerce transactions completed in the region last year were cross-border, with most customers purchasing goods and services from merchants based outside of the region.
"Only 15 per cent of [the small and medium sized businesses] in the region have an online presence; this does not mean online payment presence. This is a fantastic opportunity for everyone. People will always shift to local marketplaces if the offer exists," said Mr Ghanem.
PayPal says its regional merchant base is currently in the hundreds, and expects it to reach the thousands over the coming few years. It is also working with the local regulatory and banking systems to introduce local currency support in the Middle East.
Paypal is present in 190 markets with 117 million active users. Last year it processed more than $115bn worth of transactions.
Updated: November 14, 2012 04:00 AM