In particular, the UAE and Saudi Arabia will remain the largest and fastest-growing e-commerce markets in the region, says BMI Reseach report
E-commerce in the region set to be worth $48bn by 2022
The Middle East e-commerce market is hotting up as competition accelerates and, driven primarily by the UAE and Saudi Arabia, the market will grow by 16.4 per cent over the next three and a half years, according to a report by BMI Research.
"We forecast the e-commerce market in the region ... to be worth $48.6 billion in 2022, up from an estimated $26.9bn in 2018," the report's authors said.
"In particular, the UAE and Saudi Arabia will remain the largest and fastest-growing e-commerce markets in the region."
The projected growth of the regional market supports the decision by the online retailer Noon.com, launched in October by UAE conglomerate Emaar Malls, "to focus initially on these two countries for expansion", BMI said.
The National reported last week that according to a poll of 600 UAE residents by global payments company Visa, 66 per cent of shoppers are now happy to buy online - a figure as high as 81 per cent for Emiratis - while 70 per cent are at ease paying utility or government bills using digital platforms.
Noon.com signed an agreement with eBay this month to enable its customers to purchase products listed on eBay in the US and other countries globally.
From the second half of 2018, Noon will fulﬁl eBay orders and deliver the products directly to consumers throughout the UAE and Saudi Arabia, through a dedicated app, as well as via mobile and desktop.
This comes on the back of Amazon's purchase of Souq.com, a leading online player in the Mena region, for $586 million last year.
"The Middle East e-commerce sector has signiﬁcant room for growth as the region's economies continue to diversify economically, female empowerment and labour force participation picks up, and the number of 3G/4G subscribers grows, broadening the pool of consumers for e-commerce players to target, the report said.
Furthermore, opportunities in the region are signiﬁcant due to the young adult population that are keen to make purchases online due to the ease of convenience, BMI said.
"On average, more than 40 per cent of the total population in the Middle East is made up of young adults (20-39 years old) in 2018. Our top ecommerce markets in the region by sales, the UAE and Saudi Arabia, will have 50 per cent and 36 per cent of the total population falling into this age segment in the same period."
Millennials are more easily inﬂuenced by social media and are more likely to adopt modern shopping patterns including the use on online platforms for shopping, BMI added.