Online shopping in Mena to grow three-fold by 2022 led by Saudi Arabia and UAE

Online shopping in the Middle East and North Africa is expected to grow more than three-fold by 2022, led by Saudi Arabia and the United Arab Emirates, according to a new study.

The e-commerce market in Mena is set to expand 28 per cent to $28.5 billion over five years, up from $8.3bn in 2017, according to the findings of a new study by Google and Bain & Co. released on Monday. Saudi Arabia is forecast to grow by 27 per cent a year to reach about $10bn by 2022, with e-commerce representing an 8 per cent share of total retail sales in the kingdom.
"The expansion of the middle class, the growing role of women in the workforce, improvements in logistics and access to online products in second tier and third tier cities represent key drivers for growth," the report said.

The UAE's e-commerce market is predicted to grow 31 per cent annually to $9bn by 2022 with a share of 13 per cent of the total retail sales.

"We expect broader product selection, the entry of new players and innovation in business models to play key roles in this growth," the report said.

More people are expected to buy their groceries online in the Arabian Gulf and Egypt over the next five years.

The market growth for online grocery shopping is set to jump 89 per cent, topping all other product categories, to $4.5bn.

"A more aggressive expansion strategy by hypermarkets, further transition from the region's drive-through and phone delivery culture to online marketplaces and broader geographic expansion to new cities would help facilitate growth," the report said.

Mena's e-commerce market still needs to make "quantum leaps" in challenging areas such as payment methods and logistics, according to the report findings.

Paying by cash on delivery is still one of the industry's biggest challenges in the region as it leads to higher return rates and failed deliveries.

About 62 per cent of regional online shoppers prefer to pay by cash on delivery compared to less than five per cent in the UK and France.

COMPANY PROFILE

Name: ARDH Collective

Based: Dubai

Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi

Sector: Sustainability

Total funding: Self funded

Number of employees: 4

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Some of Darwish's last words

"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008

His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.

Key facilities

Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills

NBA Finals so far

(Toronto lead 3-1 in best-of-seven series_

Game 1 Raptors 118 Warriors 109

Game 2 Raptors 104 Warriors 109

Game 3 Warriors 109 Raptors 123

Game 4 Warriors 92 Raptors 105

The finalists

Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho

Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson

Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)

Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)

Club of the Year: Bayern Munich, Liverpool, Real Madrid

Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)

Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola

A Dog's Journey

Directed by: Gail Mancuso

Starring: Dennis Quaid, Josh Gad, Marg Helgenberger, Betty Gilpin, Kathryn Prescott

3 out of 5 stars

PRISCILLA

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”