E-commerce in the Middle East: Virtual gold rush

Regional online shoppers are shifting their business to indigenous suppliers

Tags: E-commerceUnited Arab Emirates
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E-commerce in the Middle East: Virtual gold rush The value of e-commerce-related transactions is about $11bn a year in the Middle East.
By  Massoud A Derhally Published  October 7, 2012

To help it gain visibility the company launched a TV campaign that aired on satellite channels across the region.

"We started the business in the UAE, then we expanded to the GCC, after which we started to see growth especially in Saudi Arabia, but post our television campaign we've seen the Saudi orders overtake other geographies and we expect that trend to continue," Mekki says.

The company has a dedicated version of its platform for Saudi Arabia, the largest market in the Arab world, and intends to invest in developing its interface with customers.

Saudi Arabia's economy grew 6.8 percent last year, the fourth-fastest growing market in the Middle East and North Africa after Qatar, Iraq and Kuwait, according to the International Monetary Fund. The kingdom's economy is expected to grow by about 6 percent this year, the IMF estimates.

"We expect to invest more to educate the market on e-commerce," Mekki says.

"The value is providing our customers with the broadest selection available with [the] highest level of convenience," he adds. "You can shop simultaneously on our site and view 400 brands and 10,000 styles and compare these to one another instead of going from boutique to boutique in a mall. And we will deliver anything you choose, for free, to your home."

Mekki declined to say whether the business model of the company envisioned an initial public offering.

"Right now, we are committed to building the biggest and best running e-commerce business in the region and what comes of that we are open to all options," he says. "We are focused on building this business and are thrilled by the extra fuel this funding has given us."

The investment in Namshi is a vote of confidence in entrepreneurs and e-commerce businesses in the region, says Fadi Ghandour, CEO of Aramex.

"It's a substantial amount, there are very few companies in the region that have gotten $20m other than Maktoob," says Ghandour who helped back Maktoob with seed funding.

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