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  October 27th, 2015 | Written by

Online Retail Growth Expected in Middle East Markets

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  • The UAE has led the growth of B2C ecommerce in the Middle East in the past several years by several measures.
  • Mobile commerce has an especially high potential in Saudi Arabia, says a new report.
  • Israel is a promising B2C ecommerce market, where price is an important factor attracting shoppers.

Amidst a booming retail environment, business-to-consumer (B2C) ecommerce is just evolving in the Middle East and has much room for growth. While the sales values differ across the region, a common trend is growing internet and online shopper penetration.

So concludes a recently-released report from the Hamburg-based business intelligence company

The UAE has led the growth of B2C ecommerce in the Middle East in the past several years by several measures, according to the report. Apart from being the largest online market in terms of sales, it also has the best infrastructure for B2C ecommerce, with the highest mobile, smartphone, internet and payment card penetration. With more consumers shopping online every year, the share of B2C ecommerce on total retail sales of goods in the UAE is forecasted to triple between 2014 and 2019.

Saudi Arabia is the second largest B2C ecommerce market in the region. Mobile commerce has an especially high potential there, with more than two-thirds of online shoppers making their latest online purchase via smartphones according to a survey done last year.

Israel is another promising market. Price is an important factor in B2C ecommerce in Israel, both in terms of attracting online shoppers and in competition among the merchants. With both internet and online shopper penetration growing, Israel shows high potential for online retail growth.

In Qatar, the country with the third highest per capita GDP worldwide, less than 20 percent of internet users made purchases online, despite the fact that the majority of residents already have internet access. Consumer surveys indicate that better prices than in in-store retail could motivate consumers to shop online more.

Among other Middle Eastern countries, Bahrain stood out as the fastest growing B2C ecommerce market. In Iran, the environment of online retail development has been improving over the recent years, with a number of ecommerce startups emerging. In Oman and Jordan, internet penetration is growing rapidly, but only a small percentage of internet users have grasped the benefits of online shopping.

UAE-based online merchant Souq is one of the most prominent players on the B2C ecommerce market in the Middle East. Souq is the leader in its home country and has received over $100 million in investments. International players, such as, eBay, and Aliexpress are also among the most popular destinations for online shopping across the markets in the region.