The Middle East has the fastest growing e-commerce sector in the world, providing opportunities for foreign investors, according to a report by Payfort.
In 2004, 20m people in the Arab world were connected to the internet. Over the past ten years this has increased over seven-fold to 140m.
As people go online, they have started to buy online, too. Last year the Middle East and North Africa's e-commerce sector increased by 45 per cent: more than anywhere else in the world. Asia Pacific was the second highest, with a growth of 35 per cent.
Set for more growth
While cash-on-delivery payments still dominate the Arab world, constituting 80 per cent of internet purchases, this is starting to change and will continue to do so, allowing the e-commerce sector to flourish. According to the report, card issuance in the region is growing by 40 per cent each year.
Of the countries in the Middle East, Kuwait currently has the most credit card spending power for e-commerce investors to tap into, followed by the UAE.
The shift is providing opportunities for inward investment, according to Faisal AlKhalidi, one of the authors of the report. “It is a high growth sector not just at a local but an international level, with a lot of e-commerce sites coming into the region and making use of the growth,” he says.
“There are certain areas like fashion, entertainment and events where there is no dominant force in the market right now and someone foreign could come and position themselves to benefit from it. We predict that the market will grow from $9bn to $15bn by 2015.”