A rise in the number of GCC start-ups encouraging mobile commerce

In the region, the share of e-commerce compared to the overall retail market is small, at about 1 to 2 per cent, but mobile is expected to spur its growth.

Mobile commerce requires a dedicated approach according to Ulugbek Yuldashev, chief executive of awok.com. Pawan Singh / The National
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The rising number of start-ups in the region is supporting the growth of commerce via smartphones.

The GCC was in the global top five for purchases via mobile devices last year with a 43 per cent share of digital transactions, according to Criteo, a targeted digital advertising company. The global average is almost four in 10.

In the region, the share of e-commerce compared to the overall retail market is small, at about 1 to 2 per cent, but mobile is expected to spur its growth.

While higher smartphone penetration in the UAE and a young population are factors behind the relatively high proportion of m-commerce transactions, a more recent driver has been the rise in the number of start-ups.

“Mobile phones are increasingly becoming the first screen of choice in both mature and emerging markets and this is creating a perfect environment for e-commerce to thrive,” said Saurabh Verma, a senior research manager in services at IDC MEA. “The last decade has witnessed an exponential boom in the number of start-ups and the first port of call for many of these is to leverage e-commerce platforms in order to sell their products and services.”

The promotion of entrepreneurship and innovation has become a key aim for policymakers. Last year, for example, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, launched the Dubai Future Accelerators programme, including a Dh1 billion investment over five years to support research and development in education, health, sustainability and mobility. It is part of efforts to attract more entrepreneurs to the country.

But mobile commerce requires a dedicated approach according to the electronics retailer Awok.com, which says that the majority of its business comes through mobile.

“M-commerce comes with its own set of challenges with screen space being a main constraint and customers finding it difficult to find the right product,” said Ulugbek Yuldashev, the chief executive of awok.com.

Omar Kassim, the founder of JadoPado.com, believes that mobile experiences have become a lot better.

“We’ve started to move towards thinking of mobile first rather than ‘and mobile’. I think there is a growing trust in the use of mobile devices for transactions,” he said.

In the second half of 2016, JadoPado.com’s mobile transactions jumped 27.97 per cent year-on-year and its revenues from mobile increased by 47.9 per cent over the same period.

At Souq.com, the biggest e-commerce platform in the region, 55 per cent of all purchases come through its mobile app.

“We think mobile first in everything,” said Ronaldo Mouchawar, the chief executive of Souq.com

Basket sizes are 20 per cent higher in transactions via a mobile app compared to desktop purchases, yet fall 10 per cent compared to desktop when it is through mobile Web pages, according to Criteo.

“Several of our clients in the GCC are considering stopping their desktop activities and dedicate their full focus to mobile,” said Gregory Gazagne, the executive vice president Emea, Criteo.


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