The Middle East and North Africa (MENA) region is a grouping of countries generally including all the countries of the Middle East and North Africa, ranging from Morocco in northwest Africa to Iran in southwest Asia. The region is home to 464 million people according to the World Bank.
The MENA region is ripe for digital disruption
The eCommerce industry in MENA is on the verge of a pivotal shift. As an example, retail eCommerce in UAE grew by 53% year-on-year in 2020 because of the COVID-19 pandemic. And, although not every MENA country is witnessing this type of hypergrowth, COVID has definitely helped accelerate existing trends all over the region, encouraging new players and new customer behaviors, as well as attracting more investment for the eCommerce sector across much of the region. Also, like in many places around the world, one of the fastest-growing pandemic-related sectors has been e-groceries: With new customer behaviors, new investments and new actors followed.
Many new initiatives are now aiming to help businesses, governments and SMEs across the region move from cash to digital, as the region’s banks and digital businesses were lagging behind in terms of online payments capabilities. The latest example of that trend is the partnership between Mastercard and Saudi Arabia’s eCommerce payment services provider HyperPay at the end of May 2022. It is believed that this strategic partnership will boost the adoption of digital payment solutions in the region.
A Go Local strategy is a must if you want to succeed in MENA
If online merchants and digital businesses are willing to Go Local and put some effort into localization, local sales and marketing, they will discover a huge market full of opportunities. The companies that will succeed in MENA will be the ones which understand the local culture and behavior, as an international approach is unlikely to work. Arguably, one of the most important features to have in mind when expanding into MENA is probably the payment methods, so we dedicated a full paragraph on it as follows.
Historically, cash-on-delivery has been the preferred payment method in the region for online shopping, driven by the embedded cash culture. However, things are changing and the large young and technology-savvy population is driving that change. In fact, cash-on-delivery as a payment method has dropped dramatically in the region because of the health crisis, with the majority of MENA consumers now preferring to pay digitally, and every fourth consumer using a Buy Now Pay Later (BNPL) option, enabling them to spread the payment of their purchases interest free. Bank cards on the other hand are used by a majority of online buyers and are used more and more in the region for online transactions, despite a very low amount of people owning a credit card in MENA countries. Allowing the unbanked population to purchase online is seen as a big opportunity in the region, and local actors are now trying to offer alternative ways to pay to those who do not have a credit card, such as local payment methods and e-wallets. Additionally, smartphone penetration being relatively high in the MENA region, mobile payments and mobile wallets are being used more and more by local customers. Finally, BNPL services from the MENA region, such as Postpay, Tabby and Spotii, have all benefitted from recent investment, as this type of payment model continues to grow in popularity around the world.
However, there are many more features you should take into account when drafting your Go-To-Market strategy. For example, the user engagement strategies for MENA can differ from other regions and the preferred channels and the best time slots for user engagement also vary across channels and geographies. For instance, did you know that the best time to send emails in MENA is between 4pm and 8pm, while the best time in Europe is between 8 am and noon? If you want to be successful in the region, you need to have a partner with local expertise that will help you draw a local Sales and Marketing strategy in order to reach out to potential customers effectively, as well as optimize your customer journey and checkout conversion. Softline Ecommerce will help you localize your sales funnel and your interface, will process payments in local currencies, will provide you with the most relevant local payment methods, will assist you with a multilingual customer service support, will make sure you comply with local regulations, will deal with your invoices and taxes and will minimize fraud with an AI-powered tool. As MENA is experiencing an increase in digital literacy, improvements in internet accessibility and a decreasing unbanked population, Softline Ecommerce can help you expand into the region. Softline Ecommerce’s Global Payment Solution for Digital Sales makes cross-border digital sales easy and safe, so that you can reach new customers and grow your business easily around the world. If you want to see what we can do together, don’t hesitate to contact us on our website, via Linkedin or email (firstname.lastname@example.org).