Digital services ecosystem in Middle East
Set for growth
The total number of mobile subscriptions in the Middle East increased by 8m in 2018 to reach 304.5m. And in this time, the total number of internet users in the region increased by 18m to 182m. The e-commerce sector, in particular, is on track to register particularly strong growth. Cumulatively, the MENA region accounts for four million unique online shoppers – travel is the most popular e-commerce category followed by electronics and fashion. In only three years, a tenfold growth is expected in this segment – from US$20bn in 2017 to US$200bn in 2020.
Another defining trend for retail businesses in the region is the dominance of m-commerce over e-commerce, which clearly shows the populations’ comfort with apps. Amazon’s acquisition of UAE’s largest multi-commerce website Souq.com for US$580m is testament to the growing importance of m-commerce in the region. The mobile payments platform in the region is also seeing tremendous interest with many companies beginning to offer diverse services. A few examples in the UAE include the Etisalat Wallet (a mobile wallet launched in 2016), NBD Pay (an NFC-based mobile contactless payment service also launched in 2016) and the Emirates Digital Wallet (launched in 2017 by a consortium of 16 UAE banks to provide mobile payment services).
Google Pay was launched in the UAE in November 2018, providing a fillip to contactless payments among Android phone users. The region is also seeing its share of innovative partnerships emanating from macro trends from outside of the region. If the Middle East can establish a unified digital market by 2025 – potentially of 160m digital users – it could contribute 3.8% annually to the region’s GDP.
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