E-Commerce in the Middle East
E-commerce – the purchase and sale of services through the internet – is a highly effective, low-cost way to increase revenue, generate employment, and reduce poverty in developing countries.

It was first introduced in the 1960s via an electronic data interchange (EDI) on value-added networks (VANs), then grew in the 1990s and early 2000s thanks to increased access to the internet and popular online sellers, such as Amazon and Ebay.

The internet makes e-commerce possible everywhere. It increases market efficiency, improves resource management and allows sellers to connect with buyers around the world at very low costs. E-commerce also employs maintenance workers, analysts and programmers, as well as opens up opportunities for self-employment. It also allows entrepreneurs to develop new products and expand into the market.

Needless to say, this has done wonders for the global economy; in 2013 worldwide e-commerce sales reached $1.2 trillion.

E-commerce in the Middle East, in particular, has grown by 1,500 percent over the last decade. The Middle East has one of the highest spending potentials in the world due in part to its widespread use of internet mobile technology. In the Middle East and North Africa, there are 110 million internet users, 30 million of which are shopping online already.

Electronic commerce brands often connect with shoppers via search engine optimization and social media. According to Paymill, Facebook drove 85 percent of worldwide social media-originating sales on an e-commerce platform in 2014.

The e-commerce markets in Saudi Arabia, the UAE and Egypt are expected to grow the fastest globally in the next few years. The e-commerce market in the Arab World is currently the biggest, worth $7 billion, while Saudi Arabia, the second-largest market, is estimated to be worth $520 million.

Electronic commerce in the Middle East has generated substantial income and employment opportunities. Digital commerce firms are creating new jobs and major companies are giving opportunities to young people, which boosts the economy and prepares it for stable growth.

The Middle East’s improved logistics and relatively high smartphone and tablet penetration are set to increase substantially in the coming years. This gives it even more economic potential and has opened up a new era for regional e-commerce.

E-commerce in the Middle East reduces poverty by improving the flow of information and communication. It gives the poor access to information and can be used as a way of participating in the global economy. It also provides employment opportunities for young people and independent entrepreneurs alike. As it begins to reach its full potential, e-commerce will transform the entire region and prepare it for powerful integration into the increasingly virtual global economy.

Liliana Rehorn

Photo: Flickr