What’s that you say? So you don’t want to pay…alright we get the picture! Although there may be slow growth within the Arabian e-commerce market, it’s yet another interesting puzzle waiting to be cracked. <!–more–>Here are some figures to set the stage for you:
For a developing market such as ours, these numbers sound pretty promising, but are not exclusive to online consumer purchasing as they include things such as bills and payments for services. Theoretically, this would probably mean that a good chunk of that $192M spent over the last 12 months in Jordan came from its booming tech sector as a product of all the transactions going out to vendors through the web.Now let’s weigh matters against some global facts:
According to reports, global e-commerce spending is expected to top some <a href=”http://tranloi.com/e-commerce-in-uae-to-hit-36bn-by-2010/”>$13 Trillion by the year 2012</a>, meaning that the MENA region’s online spending footprint accounts for less than 1% of global e-commerce spending – suddenly things don’t look as sexy as they used to. The challenges we face in our corner of the world are many, but are we working hard enough to address them? Let’s take a look:<ul> <li>Culture of Paying Online:Do you remember the very first time you paid for something online? Do you remember the jitters and doubts you had as you punched in your credit card number? I surely do…but that was over ten years ago and time healed all the hesitations I had. It’s important to govern and promote e-commerce sites and make sure they comply with industry security standards. That would probably be the first step towards a heartening tipping point, but in our markets it only takes a few incidents to ruin everything for everyone (for a while). People tend to overreact to incidents as such, especially in emerging areas that don’t understand this space very well. Personally, I believe time can only mend this and users will reach a level of comfort with purchasing online sooner or later – when the time comes it’ll be sweet. Whether they will grow to also feel safer buying items online, that is a bit less likely (even on a global level).</li> <li>Payment Methods: Hmm… Allow me to count the ways; Credit Card, Money Transfer, pre-paid card, Paypal and more. There is no shortage of channels to get your money to whatever vendor you are buying from and payment gateways are all over the place, but did you know that one of the top reasons why online merchants lose business today is because they do not provide a wide enough range of payment methods to their users? Moreover, 50% of all online shoppers said that if their “preferred” payment method was not available on a site they would be inclined to cancel their purchase. 40% of shoppers also added that they were far more comfortable buying from a site with a wide range of payment methods versus just one.</li></ul>This is true for the U.S. as well, 67% of online shoppers use credit cards, while 36% use debit cards for their transactions. In parts of Europe, pre-paid cards have a major market share, but in Germany we find that Males use credit for over 40% of online purchases, whereas females use direct debit with an overwhelming majority. In a place like Shanghai, 43% of users preferred to use money transfers over anything else online.
Despite the fact that a significant portion of the population does not deal with plastic money in MENA, it’s probably the most obvious way for people to pay online. If you have one, then it’s just in your pocket – make the payment and move along. Money transfers take longer, pre-paid cards have added security benefits but involve having to buy the card itself, and PayPal is nowhere to be found. WHERE ARE YOU PAYPAL?!? Come to Arabia, it’s nice and warm here.<ul> <li>Convenience: Let’s face it, things in the Arab world are rather convenient. Cities and communities are smaller, close knit, and everything is right around the corner or just a few minutes away. Unlike the United States where miles are involved in getting to the mall or grocery store (even then you’ll probably cover a few miles on foot walking down the aisles of their colossal depots), everything is within reach in the Arab world – at least for the most part.</li> <li>Lack of Incentive:Would you like FREE Shipping with that? How about a discount? I really wonder if e-commerce sites in the Arab world are providing anything other than just a delivery service. Maybe some of us are a bit lazy and enjoy the luxury of making purchases through the internet, there’s nothing wrong with that, but it won’t bring a critical mass to your online business anytime soon. More needs to be done on a number of fronts, from customer service to preferred customer treatment. Take Zappos.com for example, they covered all these areas extremely well but became the champions of customer service. That’s what brought people back to them.  How about GoNabit.com (or any other of the million group buying clones around the world), it’s doing great because people see the incentive behind their heavily discounted deals. The bottom line is that most online businesses can afford to experiment in the short-term and gain in the long run or over volume purchases.</li></ul>There are many points worth mentioning and opinions vary widely but in conclusion, I believe that there is far more that we could do as entrepreneurs, business people and governments to “relatively” shoot things through the roof for commerce in general. Having grown up and lived in the United States, I noticed how the American calendar was full of holidays and celebrations – even some were completely made up! There was something to look forward to every month of the year whether it was Halloween, Thanksgiving, President’s day, Christmas…and the list goes on. I was astonished by the way they made such commotion, noise and excitement around those occasions, even to the extent that made the fake ones part of their culture. Most of all, I was dumbfounded to see how they tied and molded them into nationwide sales extravaganzas that lived on and off-line. Let Amazon tell you about their server load over the holiday season or on Black Friday (the Friday following thanksgiving). The exhilaration will get you into the store or on the site, and then you’re hit with impulse discounts and additional savings as well. On both sides of the equation it’s like being in heaven, the consumers are saving and the merchants are turning over their inventory – it’s a super incentive that requires investment and collaboration. We have a bunch of exciting events in our part of the world, but perhaps all we need is a little….”Fuss”.