Lack of business input sees slow digital commerce growth in ME; Gartner
Gartner reveals that the likes of Souq.com, Namshi and MarkaVIP has led the business to consumer (B2C) market growth
Gartner has called for more business participation in digital commerce to maintain growth in digital commerce in the region.
Whilst the Middle East has experienced double-digit growth, limited online product ranges and lack of awareness from business are key obstacles for future growth.
Gene Alvarez, managing vice president at Gartner, said: "Close to half of the population in some leading Middle Eastern countries are shopping online, and the region has some of the world's highest levels of GDP per capita, yet digital commerce accounted for less than 1% of the region's GDP in 2016. This is much lower compared to other countries, such as the US, the UK and China.
"Today only 15% of the businesses in the region have an online presence, and 90% of the online purchases are bought from outside the region," he added.
Gartner reveals that the likes of Souq.com, Namshi and MarkaVIP has led the business to consumer (B2C) market growth. Plus Government initiatives in the region are making public services available online and setting up universal digital payment methods crucial to digital commerce growth.
However Sandy Shen, research director at Gartner, stresses that this is not enough.
The research house advises that for B2C businesses, digital commerce offers a new channel to reach customers, on top of the traditional brick-and-mortar stores. The insight businesses gain from direct customer interactions helps them better understand customer needs and design the engagement programs for target customers.
Whilst B2C businesses are on the right path, the business-to-business sector lags behind. However digital commerce offers them a channel to better serve their customers by making information more transparent, improving process efficiency and the purchasing experience for procurement managers. SMBs are usually the early adopters and active participants of digital commerce due to their lack of resources in discovering and selling to targeted customers.