The B2C e-commerce market in the Middle East and North Africa region enters a high-growth period

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Over the last few years, the B2C e-commerce market in the Middle East and North Africa region has recorded strong growth. Driven by the global pandemic outbreak, an increasing number of consumers have turned to digital channels for completing their purchases in 2020 and 2021, and this trend is expected to further continue in 2022.

Furthermore, number of consumers are regularly shopping online in 2022 has increased, as compared with 2021. This trend indicates that the region has entered into a period of high growth as consumers continue to shop online even as the pandemic has subsided. With the trend expected to continue further in 2023, PayNXT360 expects the e-commerce market to record strong growth across different product categories.

With the rebound in travel activities, consumers spending money on travel and tourism platforms is expected to increase in the region. Furthermore, the events and entertainment sector are also projected to record strong growth as pandemic restrictions are eased out. Food remains the most popular category among consumers when it comes to spending money online.

The appetite for social commerce has also surged significantly over the last two years, especially in countries such as Saudi Arabia and the United Arab Emirates. Many global players are expanding their presence in the Middle East to capitalize on the growing social commerce sector. With consumers spending more time on social platforms, the trend is expected to further continue over the next three to four years.

As the B2C e-commerce competitive landscape sharpens and consumer expectations continue to grow, players are looking to further strengthen their position in the sector through strategic collaborations and mergers and acquisitions. For instance,

• In August 2022, Noon, one of the leading e-commerce platforms in the region, announced that the firm is buying Namshi, the fashion-focused e-commerce firm, from Emaar Properties. The deal valued at US$335.2 million will allow Noon to further strengthen its position in the Middle East and North Africa e-commerce market. Furthermore, to offer consumers more product choices, Noon entered into a strategic collaboration with Lenskart, the Indian eyewear firm, in July 2022.

Amid the growing addressable e-commerce market in the region, foreign players are also looking to enter the e-commerce market in the United Arab Emirates. For instance,

• In September 2022, Nykaa, an India-based cosmetics e-commerce platform, announced that the firm is taking baby steps to push its product offering into markets such as the Emirates. The firm has already made its product available on the Noon e-commerce platform as well as started an Arab social media account for its brand.

From the short to medium-term perspective, PayNXT360 expects more foreign players to launch their services and operations in the Middle East and North Africa region to capitalize on the high-growth potential of the sector. Apart from the rising penetration rate, the surge in digital payments adoption will also keep supporting the growth in the number of online shoppers.

The arrival of BNPL solutions along with other mobile wallet services is responsible for driving digital payment adoption in the region, and this trend is projected to further grow over the next three to four years. This will subsequently lead to more shoppers turning to online platforms, thereby supporting the growth of the e-commerce industry in the region over the next three to four years.

To know more and gain a deeper understanding of the B2C E-commerce market in Africa and Middle East, click here.