Cash usage in the Middle East and North Africa (MENA) region has halved in the last five years, online retail management company Uplo has revealed in their latest annual report.
Credit/debit card use is still the most prevalent payment method across ecommerce accounting for 42% of transactions while BNPL (buy-now, pay-later) has grown in popularity, now accounting for more than 23% of ecommerce sales. It is anticipated that this will continue to make inroads on cash which now sits at 35% of total transactions.
The survey of more than 100 retail leaders was commissioned through YouGov and is part of Uplo’s MENA Online Retail Report 2023. It found the vast majority of retailers to be positive about the UAE as a place for operating a retail business with 73 percent of the retail leaders expecting to grow revenue and profits this year.
Nearly half suggested that their online retail operations are growing at a rate of 20 percent or more per year. Estimates from Dubai Chamber of Commerce indicate that ecommerce will grow from $4.8billion (in 2021) to $9.2billion in the UAE by 2026, supporting the buoyant attitude of the retail poll.
Nicolas Bruylants, CVO and Co-Founder of Uplo said, “2023 looks set to be a record year for online retail across the region, with this survey indicating retailers are seeing rapid growth that is far outstripping many global markets. Ecommerce across MENA is bucking the global trends of inflation and supply chain disruptions, instead showing remarkable resilience.
“Nations like the United Arab Emirates and the Kingdom of Saudi Arabia are developing world-class ecommerce processes. Through investment in technology, infrastructure and talent, we are at the point where the region is starting to leapfrog other countries around the world in terms of the speed, convenience and efficiency of the ecommerce offering.”
In addition to insight from experts at Checkout.com and SAP, the research paper also highlights some challenges that retailers are facing. 61% said competition from online rivals is fierce, while more than half found it challenging to manage profitability with the fine margins required for success.
Uplo also found that retail is at a tipping point for using artificial intelligence (AI) and machine learning (ML), with a 50-50 split for those businesses that are using such tools and those who aren’t.
Among other findings, Uplo’s research highlights MENA as the fastest growing ecommerce market in the world with double-digit year-on-year growth in all regional countries.
Uplo currently supports brands in navigating the challenges of online retail strategy, supply chain optimization, managing payments and improving marketing and customer experience channels. It also advises businesses on the deployment of effective AI/ML processes to enhance operations.
To read the full report, click here
