Ecommerce in the Middle East and North Africa (Mena) is growing at an unprecedented pace, with a recent report showing that 91% of consumers in the region bought products online in the past year.

The report, released by global payments solution provider Checkout.com, shows that one in five consumers across Mena purchased retail products online more frequently than last year, with 33 per cent shopping more frequently for fashion and clothing online.

This points to a rapidly developing digital ecosystem that allows government agencies, established companies and start-ups to flourish, observed Paul Carey, executive vice president of cards & payments, Al-Futtaim Group. “This is particularly evident in payments, where governments have set up regulatory sandbox infrastructure and made it easier for businesses in the region with more flexible visa options and commercial licensing,” he added.

Rapid adoption of fintech has been another pillar of the digital economy. The survey shows that remittance apps remain the most widely utilised form of fintech in Mena, but as other products increase, so does adoption. The report found that 82 per cent of consumers in Mena use some form of fintech app in 2022, up from 76 per cent in 2021. Innovation has been underpinned by solutions such as Visa’s Account Funding Transactions (AFTs) which pull funds from an account and for use on a pre-paid card, top up a wallet, or fund a person-to-person (P2P) money transfer.

“The secure, reliable, and fast movement of digital money between individuals, businesses and governments is the engine powering today’s global economy,” said Dr. Saeeda Jaffar, senior vice-president and group country manager for GCC, Visa.

Meanwhile, half of the consumers in markets such as UAE and Saudi Arabia used Buy-Now-Pay-Later (BNPL) options this year and as many as 67 per cent across Mena indicated they may use it in 2023.

In crypto, 55 per cent of 18–35-year-olds in UAE and Saudi Arabia would like to be able to pay for goods and services in crypto or stablecoins in the next 12 months. “Previously, retailers viewed BNPL as just another payment method and often compared BNPL services to other payment providers, resulting in downward pressure on rates. However, we see retailers increasingly focusing on overall growth, including marketing, customer experience and product maturity. As a result, we see a win-win, sustainable partnership model.,” said Sargun Bawa, VP of growth at Tamara, the homegrown BNPL platform.

“The move to online channels for the purchase of goods and services in Mena has been consistent and very robust over the last three years. Consequently, the Fintech ecosystem is witnessing rapid growth in the region, highlighted by the rising appeal of digital payment trends and solutions such as Buy Now Pay Later (BNPL) and sCommerce (social commerce). Coupled with the increased sophistication of Mena’s eCommerce sector, there is a growing appetite for payment apps and digital wallets among consumers. More people are managing their daily finances using these platforms, and the combination of a digitally savvy population and a mature retail sector will ensure these gains are sustained in the long run. Checkout.com’s Mena report, now in its third year, has found that over 82 per cent of consumers across the region now report to using a fintech app this year to manage their money — that’s up from 76 per cent just last year,” Remo Giovanni Abbondandolo, VP of commercial for Mena at Checkout.com told Khaleej Times.

Food delivery services was one of the biggest beneficiaries of the digital transformation of the Mena economy. “Checkout.com’s data shows that in 2022, local consumers are ordering meals online more frequently than ever. Over half (53 per cent) of Mena consumers purchased food online in the past year, with 42 per cent of Mena consumers saying they are buying food online more frequently this year than in 2021,” the report says.

The online food ordering sector has numerous moving parts that need to come together in each transaction, from the restaurants to drivers and aggregators to payment providers. Close collaboration is therefore vital for the many stakeholders, noted Ramzi Alqrainy, chief technology officer at The Chefz, a leading Saudi-based food delivery app. “Collaboration allows us to innovate effectively and to reach and serve society in its most inclusive sense. These days, one provider doesn’t need to manage all aspects of a consumer experience from A to Z. We all need to work together. This is the death of ownership,” said Alqrainy.

As the world opened up to travel and tourism after the Covid-19 pandemic, ‘revenge tourism’ has spurred a major rebound in the sector. This has nautrally filted to the online space as well. According to Checkout.com’s findings, 20 per cent of consumers in Mena purchased entertainment services online in the past year, with 14 per cent reporting purchasing them more frequently now than in 2021. Moreover, 32 per cent shopped for travel services online in the past year, with 21 per cent of consumers reporting buying them more often now than in 2021

Alexandre Morin, director of payments - risk and fintech, Wego, the region’s biggest travel marketplace, said: “Mena has become a priority market for many of the world’s tourism boards as it’s a reliable source of long-stay visitors with excellent spending power.”

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