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E-Commerce Surge In The GCC


The year 2020 proved to be more than just the closing of the decade; it turned out to be the turning point for businesses across the globe. In the wake of the global pandemic, the e-commerce sector also took flight due to various factors. Given the adoption of contactless services, global e-commerce rejuvenated itself and took rapid strides toward growth.

Following the outbreak of the pandemic, both consumers and businesses resorted to e-commerce which naturally led to a rise in the national as well as global e-commerce industries.

COVID-19 and the resultant market condition proved to be a catalyst for e-commerce in the GCC (Gulf Cooperation Council) as well. According to the Kearney report, the GCC e-commerce market value jumped from $5 billion in 2015 to about $24 billion in 2021. The GCC e-commerce market seems to be thriving under the influence of pandemics and lockdown-induced restrictions. Take a look at the driving factors for the e-commerce surge in the GCC.

Let’s first understand how the landscape of the GCC e-commerce market is. 

The e-commerce industry in the GCC was already building up steam and was up for dynamic growth before the dawn of the pandemic. The e-commerce market has since leaped into action with Saudi Arabia and the UAE at the forefront.

The pandemic witnessed a change in the purchasing habits and shopping behavior of the consumers, resulting in the significant rise of e-commerce. The buyer’s dependency on technology and the delivery of essential groceries and food items are considered to be the two critical factors responsible for this rise in e-commerce purchases.

The numbers are predicted to go on a record-breaking high in the coming years, especially in the GCC region. The global e-commerce market is estimated to hit the mark of US$16,215.6 billion at a 22.9% compound annual growth rate (CAGR). On the other hand, GCC e-commerce is expected to rise to US$29 billion in 2021 and US$34 billion in 2022. Furthermore, it is calculated that the market will grow to US$39 billion and US$44 billion, in 2023 and 2024 respectively. By the end of 2025, it is considered to go past the US$50 billion mark.

There are four fundamental factors for e-commerce to succeed in the GCC. They are: 

1. Immunity against failure – Despite being in the driving seat, e-commerce companies haven’t acquired immunity against business failure. Several reasons have been outlined which include high competition and the inability to fetch sustainable investments.   

2. Resilience test – The e-commerce industry will be meant to undergo a resilience test to prove its competency in adapting to the digital transformation and serving buyers online.

3. Best mix of channels – Implementing the use of both online and offline channels only will fetch profits for e-commerce businesses. 

4. Winning the last mile – Going out of the way to provide top-notch customer service and delivery by incorporating efficient strategies will prove beneficial for e-commerce growth. 

E-commerce is undoubtedly the driving factor for growth in the GCC with the pandemic providing an enormous boost to it. Several key players have emerged on the e-commerce landscape and have transformed the economy in the GCC. The list features names of multi-national companies and regional companies alike. Amazon tops the list, followed by the likes of Apple, FedEx Express, Noon, Barakat, Fodel, Sharaf DG, Namshi, Micro less, Danube Home, Ounass, Tryano, Hi Dubai, Dubai Shoppers, Dubai CommerCity, and OpenKart.    

For more insights on the e-commerce growth in the GCC, head to our Whitepaper

If you are a business looking for a trustworthy 3PL logistics service, you can seek help from Qafila. Write to us at hello@qafila.com or contact us at +971 4 523 3933. 

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