Expanding e-commerce in the Middle East and North Africa

How does the fashion e-commerce market in MENA compare to global markets?

The MENA (Middle East and North Africa) region presents a unique and rapidly growing e-commerce market with distinct characteristics compared to global markets.

Growth and Potential:

• The e-commerce market in MENA has been growing at an average rate of 35% year-over-year since 2019. This growth was accelerated by the COVID-19 pandemic, prompting retailers to focus on this market.
• The e-commerce market figures in 2019 were $28 billion, and were forecasted to reach $55 billion in 2022, indicating a substantial increase in a short period.Revenue in the eCommerce Market is projected to reach US$110.00bn in 2025. Source Statista.
• Revenue is expected to show an annual growth rate (CAGR 2025-2029) of 9.70%, resulting in a projected market volume of US$159.30bn by 2029.
• Luxury retailers online generated over $1.2 billion in 2021 in the MENA region.
• The Gulf Cooperation Countries (GCC) are particularly attractive due to their young, tech-savvy population with high disposable incomes and high internet and smartphone penetration rates.

Nuances and Localization:

• The MENA region consists of 22 countries with different cultures and consumer behaviours, so it cannot be treated as a single, uniform market.
• Country-specific specialisation is needed in terms of language, personalization, and commercial campaigns.
• The region uses Arabic, a right-to-left language, requiring specific adaptations.
• Marketing channel mix is different; for example, Snapchat is a high-performing channel in Kuwait, Saudi Arabia, and Qatar, unlike in many other regions.
• Commercial events include international events like Black Friday (referred to as White Friday) and local events like Saudi National Day and Eid.
• Translation needs to be human-based rather than using simple tools like Google Translate.
• Customer service requires local landlines and Arabic-speaking agents.
• E-commerce platforms need to support right-to-left languages, multiple currencies, and inventory locations.
• Payment methods should include options like KNET (Kuwait), Mada and Sadad (Saudi Arabia), and Benefit Payment (Bahrain).
• It is important to consider what products can pass the border and what is considered forbidden.
• There are also varying fees and taxes depending on the country, such as value added tax, customs clearance duties, and other fees.

Logistics and Customer Expectations:

• The Middle East presents country-specific logistics challenges.
• An undeveloped address system requires specific solutions for delivery.
• Cash on delivery (COD) is still a popular payment method in the region. Approximately 60% of online purchases are completed using COD.
• Offering COD can present challenges such as high cancellation rates.
• Customers are highly dependent on customer care and expect support through various channels.
• 90% of social media communication is in Arabic.
• A smooth and easy return process with full visibility is essential.

Success Factors:

• To succeed in the MENA region, businesses need a partner with local knowledge and expertise.
• Localised marketing, content, and customer service are crucial.
• A deep understanding of cultural nuances and consumer behaviour is essential.

Revton’s Approach:

• Revton builds, develops, and operates e-commerce businesses in the MENA region for global retailers.
• They offer an end-to-end solution for cross-border growth in the MENA region.
• Services include establishing a digital experience, localising the value chain, optimising marketing, and managing logistics.
• They provide all-inclusive localization, country-specific marketing, managed logistics, various payment options, and customer care.
• Revton offers a performance-based working model with commission on revenues generated for the client.

What localization factors impact Middle East e-commerce?

Several localization factors significantly impact e-commerce in the Middle East. These factors encompass marketing, merchandising, translation, customer service, platform considerations, and payment methods. The sources highlight the importance of country-specific specialisation due to the region’s diverse cultures and consumer behaviours.

Key localization factors include:

• تسويق: Marketing messages and channel mix should be localized. For example, while Snapchat may not be a top-performing channel in other regions, it is highly effective in Kuwait, Saudi Arabia, and Qatar.
• Merchandising: Commercial events should include both international events, such as White Friday (the Middle Eastern equivalent of Black Friday), and local events, such as Saudi National Day and Eid.
• Translation: Translation should be human-based and culturally relevant, avoiding literal translations from tools like Google Translate. The Arabic language is used in the Middle East, which is written from right to left.
• خدمة العملاء: Local customer service should include local landlines and Arabic-speaking agents. Customers in the region depend heavily on customer care.
• منصة: E-commerce platforms need to support right-to-left languages, multiple currencies, and multi-warehouse management.
• Payment Methods: Payment options should include local methods such as KNET (Kuwait), Mada and Sadad (Saudi Arabia), and Benefit Payment (Bahrain). Cash on delivery is also a very common payment method.
• الخدمات اللوجستية: Logistics needs to account for country-specific challenges and undeveloped address systems.
• Content: Creatives and content should be tailored to the region, ensuring they resonate with the local audience.
• Legal and cultural: Consider what products can pass the border and what is considered forbidden.
• التسعير: Implement a pricing structure that localizes pricing for each country, incorporating duties and taxes to avoid hidden costs for the customer at checkout.

These localization elements are crucial for brands and retailers aiming to penetrate the Middle Eastern market effectively. Revton offers these services to enable localization at its core.

In conclusion, while the MENA region offers significant e-commerce growth opportunities, its unique characteristics require a tailored approach that considers cultural nuances, local preferences, and logistical challenges. Partnering with local experts and adapting strategies to the specific needs of the MENA market are crucial for success.

What benefits does cash-on-delivery payment provide?

Cash-on-delivery (COD) is a popular payment method in the Middle East and North Africa (MENA) region, and it offers specific benefits in that market.

Key benefits of cash-on-delivery:

• Market Relevance: COD is a widely used payment method in the MENA region, with as much as 60% of online purchases being paid for in cash upon delivery.
• Building Trust: COD can help build trust with customers who may be hesitant to use other payment methods initially. By allowing customers to pay only when they receive the order, it reduces perceived risk and encourages first-time purchases.
• Customer Preference: Many customers in the MENA region prefer COD due to cultural norms and a preference for tangible transactions.
• إمكانية الوصول: COD provides access to e-commerce for individuals who may not have credit cards or bank accounts, thus expanding the potential customer base.
• Increased Conversion Rates: Offering COD can lead to higher conversion rates as it caters to the payment preferences of a significant portion of the population.

While COD presents opportunities, it also has challenges, including potential for higher cancellation rates and the need for efficient logistics to manage cash collection and returns.

Social Commerce in the Mena

Social Commerce is also gaining increasing shares of the total e-commerce market in the MENA region, contributing to the further growth of the ecommerce market. Social Media users and platforms aim a keeping the users on-platform as much as possible.

How does Revton’s localisation process benefit businesses?

Revton’s localisation process offers several benefits to businesses aiming to expand into the MENA (Middle East and North Africa) region, addressing the specific challenges and nuances of this diverse market.

Key benefits of Revton’s localisation process:

• Comprehensive Localisation Revton provides an all-inclusive localisation that goes beyond simple language translation. This includes adapting the entire catalogue to suit the region, running relevant holiday sales, and observing nuanced cultural differences.
• Cultural Relevance The localisation process ensures that the business resonates with local customs and traditions, which helps to build trust and credibility with customers.
• Marketing Effectiveness Revton’s localisation process includes country-specific marketing strategies. This ensures that marketing campaigns are effective and add to the bottom line by understanding how to drive MENA customers from the top of the demand funnel to increasing conversion rates in the shopping cart.
• Optimised Customer Experience By offering a seamless digital experience that looks, feels, and behaves like local sites do, Revton helps businesses to connect their inventory with a new customer base.
• Effective Customer Service Revton’s customer care policies and guidelines are executed by local customer service representatives who speak the language and provide superior brand experience that drives loyalty and repeat purchases.
• Payment Solutions Revton provides payment options relevant to the region, such as cash-on-delivery, buy now pay later, and debit card payments, ensuring that customers can transact using their preferred methods.
• Logistics Management Revton manages logistics, including last-mile delivery, returns, customs, and fulfilment, to navigate country-specific challenges.
• Specialised Expertise Revton has dedicated team members across various functions to deliver localisation. They offer services such as digital marketing, tech and platform customisation, branded customer service, localised merchandising, localised logistics, operations consulting, data analytics and reporting, and localised payment methods.
• Performance-Based Model Revton offers a performance-based working model, taking a commission on revenues generated for the client, which aligns their interests with the business’s success in the region.
• Addressing Censorship Issues Revton helps businesses overcome censorship issues related to imagery by creating elevated lifestyle imagery and adapting store layouts.
• Knowledge of consumer behaviour: Revton understands different consumer behaviours and cultures within the 20+ countries of the MENA region.

By leveraging Revton’s localisation process, businesses can effectively penetrate the MENA market, overcome cultural and logistical challenges, and achieve sustainable growth. The insights and expertise provided by Revton ensure that businesses can create meaningful connections with local customers and maximise their potential in this rapidly growing e-commerce region.

What is Revton

Revton is a company that builds, develops, and operates e-commerce businesses in the MENA (Middle East and North Africa) region for global retailers. It offers an end-to-end solution for cross-border growth in the MENA region.

Key aspects of Revton include:

• Comprehensive Localisation: Revton provides an all-inclusive localisation that goes beyond simple language translation, adapting the entire catalogue to suit the region, running relevant holiday sales, and observing nuanced cultural differences.
• Expertise: They have dedicated team members across various functions to deliver localisation, including digital marketing, tech and platform customisation, branded customer service, localised merchandising, localised logistics, operations consulting, data analytics and reporting, and localised payment methods.
• Marketing: Revton offers country-specific marketing strategies to drive MENA customers from the top of the demand funnel to increasing conversion rates.
• Customer Experience: Revton helps businesses connect their inventory with a new customer base by offering a seamless digital experience that looks, feels, and behaves like local sites do. Their customer care policies and guidelines are executed by local customer service representatives who speak the language.
• Payment Solutions: They provide payment options relevant to the region, such as cash-on-delivery, buy now pay later, and debit card payments.
• Logistics Management: Revton manages logistics, including last-mile delivery, returns, customs, and fulfilment, to navigate country-specific challenges