An increasing awareness on the cost-effectiveness and convenience of using e-commerce has helped fuel regional interest in this web-based form of marketing, industry specialists said.
The internet as a business platform, according to them, has become even more popular during the current economic slowdown as companies seek marketing options that will not heavily dent their pockets.
“If anything, e-commerce has benefited from the financial crisis. It’s an efficient medium to sell goods and services,” says Ronaldo Mouchawar, CEO of online marketplace
Souq.com.
Mouchawar added that shopping sites are driven by both supply and demand on products. “Clearly today, there is more supply of products due to slow sales in the traditional channels, and we have seen the start of a shift to online,” Mouchawar said.
Souq.com alone has listed over one million items – ranging from brand-name consumer products to cars and properties – on its website.
Husam Al Hmoud, senior project manager of B2B online marketplace Tejari, said awareness has played a key part in encouraging more businesses in the region to move to web-based sales and marketing strategies.
“When Tejari was launched in 2000, there were very few companies venturing into e-commerce. As business professionals get more educated about e-commerce and the benefits that they can get from using the internet as a platform, it has become easier for us to attract companies to register to our portal,” he said.
Tejari, which has re-launched its website (
www.tejari.com) this month, has over 200,000 corporate members worldwide. It has conducted more than 100,000 online transactions worth over $8 billion since it was launched.
GCC consumers seek value-for-money products
According to the latest consumer confidence report published by MasterCard Worldwide, online shopping in most parts of the world continued to pick up in the last quarter of 2008 despite the anaemic global financial climate.
“Although the course of the global economy has been filled with surprises, it hasn't diminished enthusiasm for online shopping,” the credit card giant noted in its survey on Economic Crisis and Preference for Online Shopping in Asia/Pacific, Middle East and Africa.
Average online consumer spending in the UAE, which was recorded at $1,193 (Dh4,390), had been the highest among the 10 countries surveyed.
The survey gives a clear picture of the current market trends in the region, says Mouchawar.
“For consumers who are more price-cautious, online shopping provides a great way to get deals on value brands, and we have seen steady increase in the sales of branded products on Souq.com. Also, our auctions are more active, as people are in search of the best value on products,” the Souq.com executive said.
He mentioned that a recent survey initiated by Souq.com revealed that more than 40 per cent of their 250,000 members said they look to shop online at least once a week.
Businesses expand their online presence
While most companies may see the credit crunch as a challenge, others view it as an opportunity to become innovative, says Tejari’s Al Hmoud.
“With the global crisis, more companies are resorting to cost-cutting measures. They want to get more sales, reach more channels and have a wider exposure both regionally and internationally, but they are not prepared to spend so much money to achieve these goals,” he noted.
“One of the features we are offering on our portal is an extensive list of international suppliers that can give quotations to companies based in the Middle East and anywhere in the world. This will enable them to compare prices and eventually save money.”
Al Hmoud added that Tejari has also been conducting e-Ready certifications and trainings, which promote e-commerce awareness and help executives understand how they can extend their company’s presence online.
Recently, Tejari redesigned its portal to cater to the evolving needs of their subscribers. The revamped website will now feature an online trading, a more comprehensive categorisation system and a new search engine to help viewers find the exact service or products they are looking for.
Keeping online security in check
One of the main concerns of potential e-shoppers is online security, but industry experts are quick to quell consumers’ fear.
“Trust in online payment is [rising], this is mainly due to increased awareness in the benefit of e-commerce to the end users, as well as businesses. On Souq.com we have seen a steady shift to online payments. We have rolled out a new service called Souq SafePay, which protects both buyers and sellers, and helps complete the online transaction, while providing logistics services as well,” says Mouchawar.
This development, he added, is a major shift from the old trend where online users list products that they have researched online, then complete transactions offline. “Even though this system works for few products, it was never the answer as it is difficult to scale since you deal with leads not sales,” he explained.
Al Hmoud admits that some people are still wary of transacting online, which is why e-commerce websites are always on their toes to ensure that consumer privacy and security are guarded.
“The web is very open. Anyone can claim to be someone or hack any website. That’s why we adopt an eVerify service, which proves that a company listed on our website is a legally existing entity,” he said.
Despite the looming economic crisis, the future of e-commerce looks bright, according to Souq.com’s Mouchawar. The shopping website gets over 550,000 unique visitors a month, but he believes the industry has a lot of untapped potential.
“There is a lot of room to capitalise on this sector as industry players improve their services, increase member base and fuel growth in the region,” he said.
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