Your online business has already won the local market. Congratulations! Now you probably wonder how to bring your business to a new level. An excellent opportunity to expand is to enter foreign markets. Which foreign markets are promising enough for e-commerce businesses now? Choosing the right market is the first thing you should do.
This article will guide you along the way to expanding to the Middle East market. We set out only the necessary information without bogging you down into tedious details.
The Middle East region overview
Let’s be honest, scaling an e-commerce business is a challenge. But if you have a clear plan and understanding of how to do it, the chances you’ll succeed with a new audience are much higher. Planning to expand to new markets requires considering their relevance to your products or services. So, the first important step is to choose the most lucrative market for your product or service.
Let’s say you opt for the Middle East region. It comprises the following territories: Iraq, Iran, Israel, Lebanon, Turkey, Egypt, Cyprus, Syria, the West Bank, the Gaza Strip, Jordan, Sudan, Libya, and the various states and territories of Arabia proper (including Saudi Arabia, Kuwait, Yemen, Oman, Bahrain, Qatar, United Arab Emirates). The centre of the region under consideration was formerly called the Near East.
The Middle East market presents new opportunities with growing populations, improving infrastructure, and numerous growing industries. The region is a major oil-producing area, helping to fuel growth in the region. Despite the diversity in the Middle East market, it isn’t easy to draw broad conclusions and forecasts. Several common factors influence all economies in the region to various extents, including the COVID-19 pandemic. There still is plenty of opportunities for investment and profitable business ventures in the Middle East.
Middle Eastern markets are characterised by high population growth rates, leading to consumer markets growth.
Major drivers of international investment reside in the real estate, hospitality, and construction industries. Egypt is thought to be stabilising, while Morocco has improved export and tourism revenues. Kuwait and Qatar have weathered the oil price drop with little or no visible downturn. There is no ground to believe that the Middle Eastern market will not continue to present excellent business opportunities in the future.
Middle East market opportunities
The Middle East market is another underrated region for developing e-commerce businesses. It is projected to be valued at $49 billion by the end of 2021. This market is excellent for foreign online stores because the competition there is not as strong as, for example, in China.
By the way, did you know that overseas companies account for about 50% of all e-commerce revenues in the Middle East? Local brands tend to be less developed and therefore cannot meet all customer needs. Therefore, sites such as Asos, Net-a-Porter, and Chinese SheIn have easily found their place in the Middle East e-commerce market. So, here are the lists of current and future opportunities of the Middle Eastern market for businesses:
- food security, aquaculture;
- major events (including FIFA 2022 World Cup in Qatar);
- environmental solutions.
- processed foods and supply chains;
- innovation in life sciences and biotechnology;
- healthcare (especially research);
- renewable energy.
Economy & trade
While political stability in the region is an issue, the region is expected to grow significantly on the back of its young and ambitious workforce in the long term. The diversification of the Middle East economies will also see growing investments and influence in these regional areas. Сompanies with innovative offerings in the food and agriculture, education and training, and infrastructure sectors will be in high demand, especially those willing to consider market-entry strategies such as joint venturing and partnerships.
Exporting to the region can provide the ideal launchpad for expansion into the greater Middle East and Northern African region. The key states are:
- United Arab Emirates (UAE)
- Saudi Arabia
The Gulf states are expected to become a regional hub for several industries, extending to include Eastern Africa, Turkey, Iran, Central Asia, South Asia and Europe. The diversification of these states is a long-term trend and will be the consistent thread driving new industries’ development in the region.
The Middle East market is complex. It consists of countries with vastly different rates of internet and banking penetration. Internet and banking penetration levels vary from above 90% in Bahrain, Qatar, and UAE to less than 40% in Syria, Yemen, and Iraq.
Altogether, this region contains 145+ million internet users, and most of them prefer to pay cash-on-delivery. But due to the high return rate, some retailers might neglect to include this payment method in their payment options portfolio. Still, to settle efficiently in the region, online businesses must offer cash-on-delivery.
Credit and debit cards, especially Visa and Mastercard, are the second most widespread payment option in the Middle East. Alternative payment methods also maintain a presence in the region (PayPal, CashU, and bank transfers account for the largest market shares).
The most common way to pay for online purchases in the Middle East is cash. As a whole, card payments (44% market share) are the next most popular online payment method. Bank transfers take up about 14%, and various other methods, including e-wallets, have an 11% and 8% share, respectively.
The most popular payment methods of the Middle East region are:
- Bank transfers
- Apple Pay
Ready to scale up?
Do you think the Middle East market is a good value for your product or services? Corefy is ready to assist you with the necessary payment providers and more. Our payment orchestration platform allows you to connect hundreds of payment providers worldwide through a single integration with our platform. Contact us to get the information you need and professional assistance.