Middle East, Africa and South Asia's e-commerce market to reach $148.5bn by 2022

Young population, deep internet penetration, government policies and ease of doing business are helping the industry grow

The Gulf region witnessed a 214 per cent year-on-year increase in cross-border online sales by June last year. Getty

The e-commerce market in the Middle East, Africa and South Asia will grow at an annual rate of 18.4 per cent to $148.5 billion by next year, according to a new report.

This compares with an average growth of 16.6 per cent globally, a report by Dubai CommerCity, the first dedicated e-commerce free zone in MEASA, showed.

The regional e-commerce sector is witnessing “significant growth, which is driven by the confidence of its business community and ecosystem”, Amna Lootah, assistant director general of Dubai Airport Freezone Authority and a board member at CommerCity, said.

“This has also been led by the continuously changing consumer behaviour and the adaptation of advanced technologies that played a key role in easing the overall consumer shopping experience.”

E-commerce transactions have boomed amid the coronavirus outbreak as movement restrictions to contain the pandemic prompted people to shop online.

The Gulf region alone registered a 214 per cent annual increase in cross-border online sales by June last year, CommerCity said.

The MEASA business-to-consumer products e-commerce market equates to about 2.5 per cent of the global B2C e-commerce market, it added.

South Asia represents the largest sub-regional e-commerce market, with India accounting for the bulk of sales in the MEASA region. The GCC is expected to register the highest growth between 2019 and 2022, with Saudi Arabia and the UAE – the Arab world’s largest economies – taking the lead at 39 per cent and 38 per cent annual growth, respectively.

“This report shows the potential growth expected to take place in the e-commerce sector. It will help local, regional and multinational companies to better understand the B2C product market in the MEASA region,” DeVere Forster, chief operating officer of Dubai CommerCity, said.

“It will also guide the regional government entities and industry bodies to explore potential developments that can better facilitate the e-commerce sector at a regional and global level.”

The findings of the report suggest that the affluent, young population and cross-border e-commerce platforms are the two strongest growth drivers of the e-commerce industry in the MEASA region.

Other factors include high levels of internet penetration and smartphone and social media adoption, government policies and ease of doing business.

However, for the MEASA region to become a competitive global player, the report suggests that there are key structural barriers that must be addressed by the public and private sectors.

It provides five broad strategic considerations to overcome key e-commerce barriers. These include a robust policy framework, consumer awareness and trust building, improved logistics and postal services, digital infrastructure and global collaboration.