The e-commerce and digital payment industries in the Middle East & North Africa, Pakistan (MENAP) region are set for major growth in 2021, with nearly half of consumers likely to increase their online shopping over the next year, according to a report released today by Checkout.com, a leading global payment solution provider. The Connected Payments in MENAP report also reveals that the region, which has historically been dominated by cash payments, presents a significant growth opportunity for the digital payments industry as the region’s online shoppers now prefer using digital payments rather than paying by cash on delivery.
The report draws insights from a regional survey, which polled more than 5,000 consumers in September 2020 in the UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain, and Pakistan.
Across the eight countries, 47 per cent of consumers say they expect to shop online more frequently over the next year. Only 15 per cent expect their online shopping frequency to decline, while the remaining 38 per cent expect it to remain about the same as now. The likely surge in e-commerce and digital payments in 2021 is consistent across the countries surveyed, from 49 per cent of the GCC consumers saying they will shop online more frequently, to 48 per cent in Jordan, 47 per cent in Egypt, and 39 per cent in Pakistan.
Online merchants can expect certain demographic groups to drive growth more than others, particularly the most affluent consumers (56 per cent), those already shopping online at least on a monthly basis (55 per cent), men ages 35 and older (55 per cent), and those using digital payments rather than cash or bank transfers to pay for their online purchases (54 per cent).
“While there has been a sudden surge in e-commerce and digital payments this year due to the impact of COVID-19, our report suggests what we are seeing today is more than a temporary change in consumer behavior. Our internal data shows an 86% increase in digital payment transactions on our platform since the start of the pandemic in the region,” said Sebastian Reis, EVP of Global E-commerce at Checkout.com. “This presents a major opportunity for businesses across the MENAP region. However, to leverage this shift in consumer behavior and to succeed in what’s already a highly competitive space, businesses will need to offer not only the products and services consumers look for, but also the best online shopping experience, including payment processes that are safe, secure, and convenient for consumers.”
The Checkout.com report also shows that the region’s consumers have embraced e-commerce nearly universally, with 90 per cent saying they shop online, including nearly half (44 per cent) doing so at least on a monthly basis. According to the report, COVID-19 is driving a significant share of the current e-commerce and digital payment transactions in the region, as 40 per cent of online shoppers say they are buying and paying online because of the pandemic. Moreover, 45 per cent say they are now purchasing products and services online more frequently than they did before the start of the COVID-19 outbreak.
The pandemic is accelerating growth particularly in the online purchases of prepared meals (41 per cent report higher online purchasing frequency since COVID-19), clothing (37 per cent), groceries (33 per cent), and electronics (30 per cent). While online orders of prepared meals and groceries appear to have surged evenly among males and females, men seem to be driving most of the e-commerce growth in electronics, and women account for a stronger increase in online clothing purchases.
