Ramadan 2022: Mena e-commerce spending to hit $6.2bn in online shopping surge

Consumers in the Middle East and North Africa region are expected to spend about $6.2 billion on online purchases during the holy month of Ramadan as their digital activity continues to grow across multiple channels, according to a report by consultancy RedSeer. Average time spent by users online was up by nearly 12 per cent in the region and this had an effect on spending behaviour as consumers discovered brands and products, the report showed. The most widely-used platforms by Mena's online shoppers are social media , messaging and short-form content such as those from YouTube Shorts, Instagram Reels and TikTok. An additional 35 minutes are spent daily on average on social media and short-form content alone during Ramadan , which is expected to begin on April 2 in the UAE. Short-form video, in particular, is the most influential content category as it satisfies product information needs in more engaging ways, Red Seer said. “These channels will be used for entertainment, socialising and product discovery, implying a stronger influence on the purchase decision. Consumers want to be informed about products by relatable people in a more light-hearted and entertaining manner, which maximises engagement and drives up conversion,” Akshay Jayaprakasan, engagement manager at RedSeer, said. The coronavirus pandemic has hastened digital adoption in the Mena region, leading to an increase in online shopping in particular. The UAE's e-commerce market alone is forecast to grow 60 per cent to more than $8bn by 2025 from 2021, a report from EZDubai and Euromonitor International showed this month. Last week, the nation's Economic Integration Committee said it will form a joint technical action group to raise awareness among e-commerce players about the need to licence their activities. Consumers in the UAE, in particular, are open to cross-border shopping during Ramadan and Eid Al Fitr. As a result , the users are increasing their cross-border spending during the holy month, research from Meta Platforms – the company formerly known as Facebook – and London-based research firm YouGov said in a study this month. Smartphones were the most used digital tool to make an online purchase at 82 per cent, followed by desktop or laptop computers at 38 per cent, it said. On a wider scale, Mena economies have the potential to achieve a 46 per cent growth in per capita gross domestic product over the next 30 years, or a long-term gain of at least $1.6 trillion, by fully adopting digital technology in which e-commerce is a component, the World Bank said this month. RedSeer's study said that the grocery category is poised to record the most growth as 87 per cent of respondents said they plan to increase their spending in this segment, which would bring its share to 14 per cent of the overall e-retail sector, from 11 per cent currently. Fashion (70 per cent), home (62 per cent) and electronics (58 per cent) are also likely to register a growth in spending. Red Seer also noted that before Ramadan, spending on groceries and home decor is expected to pick up, while fashion and beauty spending could increase during Eid, when gift giving is common. These variations in sales highlight the necessity of supplier proactivity throughout the holy month, it said. “Ramadan induces consumer behaviour that is very different to normal working times, particularly the peak demand time shifts. Use cases change massively as people work from home, while others return home at a different time of the day,” said Clemence Dutertre, vice-president of demand at Dubai-based multi-service platform Careem. Ramadan has also become a main event in the region's e-retail calendar along with Black Friday – the shopping day after the US Thanksgiving holiday that has spawned versions across the world. These two periods account for about 40 per cent of overall e-commerce spending in the Mena region during the year, RedSeer said. “One of the most nuanced challenges for brands going into this Ramadan season is to match consumer expectations from the past, in the face of the inconsistent global supply across sectors,” said Ankit Sarwahi , managing director of Middle East Venture Partners.

Ramadan 2022: Mena e-commerce spending to hit $6.2bn in online shopping surge

Higher average time spent by users online could lead to more purchases, a new study shows