Are you looking to target audiences in the GCC? With exponential growth rates in ecommerce in these countries, there are several opportunities for businesses to expand within the region. Here’s a look at what you need to know about the GCC, as well as the stats and facts to consider when developing your targeting strategy.
Getting to know the GCC
The GCC (Gulf Cooperation Council) is the economic and political union of six Arab states established in 1981. These states border the Gulf, namely: the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait and Oman. These countries are all connected via air and sea routes and share a location that fits ideally between the East and West. The GCC is thriving thanks to transformations that followed the discovery of oil in the region.
Growth in the GCC is diversified across several sectors, including aviation, communications, finance, healthcare, logistics and tourism. These countries have fast growing economies and present some opportunities that welcome foreign investment. This makes it ideal for business opportunities, along with the fact that online shopping is growing rapidly in emerging markets such as these.
The region has a high population of digital natives. This is complemented by the fact that rates showing internet usage and mobile devices in the Middle East are far above the world averages. However, just four years ago in 2016, only 15% of businesses in the Middle East had an online presence, with 90% of that belonging to foreign businesses. The Middle East also has a strong mall culture, so moving online needs to ensure that needs are met efficiently, with quick delivery times and high service levels. This shift is inevitably occurring due to mall closures in 2020 during lockdown periods related to the COVID-19 pandemic.
Targeting GCC customers online
Now that we’ve set the stage for understanding the GCC in general, we’re going to fill you in on the specifics of the region that can help you to target customers online:
- Where to target: The two front runner countries in the GCC for growth and business opportunity are the UAE and Kingdom of Saudi Arabia (KSA) closely followed by Qatar. The other countries have smaller growth potential, which is linked to their smaller population rates and disposable income. Your targeting strategy should take this into account when it comes to geographic targeting. In order to introduce your brand to the market, businesses should consider developing their presence on existing online marketplaces and in doing so, understand the potential demand for their products in the region. This will increase visibility and customer bases. Popular marketplace sites include Souq, Noon, Namshi, AliExpress and eBay.
- Who to target: UAE shoppers are among the top online spenders, with the annual spend per shopper estimated at over $1,600. The region has high spending potential, making it an attractive market for businesses to target. Online shopping is most preferred by the younger population and women. One of the biggest factors which draws them to purchase goods online is cheaper products being sold online, so businesses need to work lower prices into their marketing strategies. While many consumers prefer to shop online for convenience sake, Middle Eastern customers prefer it because it saves them time. This is therefore the main factor of appeal and one businesses should cater to.
- How to target: With the majority of the population in GCC countries using mobile phones, businesses should note that it is the preferred device to use when shopping online. Your ecommerce site therefore needs to be developed with a mobile-first approach, as this is where the majority of your sales will be coming from.
- Popular online purchases: Some of the most popular items to purchase online include fashion, electriconcs, beauty and healthcare products and homeware, as well as travel related bookings. E-groceries, though, are the fastest growing market in the Middle East estimated to be worth $200 million in the GCC and Egypt. It makes up 5% of e-commerce in the UAE.
- Money matters: While many people now use credit cards with trusted brands, the preferred methods of payment are money wallets and cash on delivery. There are 445 million mobile money wallets in the Middle East and Africa, compared to 286 million bank accounts. Credit cards are often used for purposes of budget management options and rewards offered. Your business therefore needs to cater to these payment methods in seamless online experiences and work on building trust in order to increase the rate of credit card payments.
- Challenges: Online shopping in the Middle East is forecasted to grow by 29% in the Middle East in 2020, though ecommerce is still very much in the developing stages. The lack of postal codes in some regions and lack of trust in payment methods have slowed down early adoption of this shopping method. Businesses need to take these two challenges into consideration before entering the market to ensure that it does not interfere with their operations.
There you have it - the need to know facts about the GCC and will help you to make informed decisions when it comes to targeting the region's population. With so much room for development, there is no better time to develop your business’s online presence in the area if you haven’t already.
Need help with online targeting in the GCC?
Work with us at Nexa, a leading digital marketing agency based in Dubai. Book a one-on-one meeting with us today to get started with your e-store and targeting strategy.