Business opportunities have abounded in the Middle East, especially in e-commerce. Dubai, Saudi Arabia, and the e-commerce growth in GCC areas are clearly notable. The reason these areas have become global hotspots is due to the Middle East’s economic climate. Global Intelligence Alliance experts estimate the Middle East’s GDP at $1.4 trillion. The Middle East has a population of 315 million, making it a good location for new businesses. Let’s take a deeper look at different factors associated with e-commerce in Middle East.

Scope of E-Commerce Business in the Middle East Region

The e-commerce industry has come a long way in a very short period of time, especially following the COVID-19 pandemic, as more and more people started shopping online. Delivery options, product reviews, and free returns are a few of the parameters that add value to e-commerce. As a result, e-commerce is becoming an integral part of a variety of age groups be it millennials or gen Z. As e-commerce becomes more mainstream, it redefines the customer’s path to purchase, fosters better customer experiences, and creates growth opportunities for both large and small retailers. 

The Middle East Region and the GCC e-commerce market have surely become a big growth market. Customers in the Middle East are seeking digital experiences, which is why they are driving towards e-commerce. Getting the same “real-life” experience online as in stores is certainly easier and less time-consuming for customers. Nevertheless, it is not only consumers who are buying products online; it is also companies themselves who are realizing the potential and necessity of attracting and engaging consumers. 

A large portion of the Middle East’s population is younger, and since the younger generation is more inclined to use e-commerce and smartphones, they can be an ideal demographic. The Middle East region also has some of the highest per capita wealth in the world, so e-commerce is undeniably booming in this region. It is also quite incredible and overwhelming to see how much internet use there is in the Middle East, even more than in the U.S. and France. Therefore, expanding your e-commerce business into the Middle East Region can be a win-win idea.

Step-by-Step Guide To Start An Ecommerce Business in the Middle East

According to Builderfly, about 80% of eCommerce businesses fail. It is a lack of understanding of the market and the requirements of the target audience that determines the success or failure of an eCommerce business. Here are some of the key steps that you need to pay attention to while starting an eCommerce business.

1. Research about current market 

Conducting the necessary research is the first step toward starting an eCommerce business in the Middle East. Based on market research, an e-commerce startup should decide which products it will offer. The Bureau of Labor Statistics reports that almost half of businesses fail within five years due to a lack of market research. If you want to make sure that you run a successful eCommerce business in the Middle East, you need to prioritize market research. E-commerce businesses need market research to have a strong and solid foundation.

2. Business Plan 

Your business plan describes your company’s goals, what you’ll sell, and how you’ll run it. Writing a business plan is one of the most important things a person looking to start a business in the Middle East needs to do. By creating a comprehensive business plan, you will be able to determine what will work and what needs to be changed. Increasing sales and customer satisfaction should be the main goals of your business. Your business plan and strategy should be able to define these goals and should also have information related to which markets to target, how to attract customers, when to launch new products, and how to deal with competitors. 

3. Business Strategy

Consider a variety of business strategies you can implement, for example, a company’s IT strategy specifies which types of software will be used, how the payment gateway will be integrated, etc. By developing a human resource strategy, you can determine which activities you should outsource and which ones you should do in-house. It is in the operations strategy that decisions are made about how inventory, customer service, and marketing are managed.

Then comes the location strategy, for instance, it is possible to create your company in either the mainland or the free zone, but each has its advantages and disadvantages. The pros and cons of each location should be considered when making a decision based on your long-term business needs. For example, if you intend to invest heavily in inventory, you should opt for a free zone as you can enjoy tax liberties. If you take the long-term benefits of a location into account rather than the immediate benefits, you won’t regret your decision. In the past few years, the MENA region has also observed significant growth in the e-sector and the MENA retail market is flourishing.

4.  Finding a 3PL partner:

An excellent third-party logistics provider (3PL) can improve your customer service and efficiency in the Middle East. Hence, choose a 3PL with proven processes and the right resources, as well as the capability to integrate with your internal systems. The third-party logistics provider you choose must also have a culture and values that are compatible with your own since modern logistics solutions require a high level of communication and data sharing. Go for a partner who understands your supply chain priorities and provides advanced technology solutions is crucial. You should be able to get assistance from your 3PL partner regarding integrating your WMS with your website, storing and dispatching stock in accordance with orders, checking quality during supplier inwards, following packaging standards, and partnering with courier companies. Although you may not need such sophisticated systems right now, things are always changing in the business.

5. A Top-Notch Website

A business that sells online has to set up a website, create a marketplace seller account, list the products, manage inventory, fill orders, and deliver packages. A successful web presence involves purchasing a domain name in advance, hosting and designing an attractive website, and setting up payment methods. You should focus on creating a clean, customer-focused design with an excellent user experience if you want to generate both traffic and sales. It is pointless to have an attractive website if it is not mobile-friendly. Also, a clean website with a fast loading time has lesser bounce rates. The design of UX and UI is perhaps the most interesting part. It involves designing the website, including the customer journey map, navigation features, cross-selling features, checkout cart features, catalog management, and the features required in the website.

About YRC Consultants

Are you wondering how to run an eCommerce business in the Middle East? Want to know more about the Middle East retail trends? At YRC (Your Retail Coach), we assist our clients in all aspects of starting and managing an e-commerce business through our strategy-based consulting services. Consequently, our business consultants can assist you in almost all aspects of e-commerce business, including concepts, strategies, operations, process automation, software recommendation, SOPs, etc. You can contact us if you would like to have more information about how to start an eCommerce business in the Middle East and what factors affect online shopping in GCC.