Gulf countries, including the United Arab Emirates, have one of the highest rates of smartphone penetration in the world. Moreover, a large part of Internet users are accessing it via their phones. However, mobile customers in the UAE are still reserved when it comes to mobile payments, which significantly restricts the e-commerce sector. Mobile advertising is also far from being utilized to its full potential.
Industry experts say that the UAE provides a great opportunity for mobile advertising and commerce, considering the increasing use of smartphones and mobile devices. But the sector is still held back by the customers’ reluctance to pay online and the poor development of mobile ads. Investing in mobile advertising could push the e-commerce sector growth, but only if it is done the right way. People are now avoiding ads, as they interrupt their experience, but there’s a better strategy for retailers and advertisers. Ads will be far more attractive, if they offer discounts, sales and individually focused promotions. Customers will be willing to buy online as long as the message (the ad) is clear and the payment methods are easy to use. And here come the challenges before advertisers – mobile advertising is very different from what is used on desktops. In terms of tracking and targeting, companies need to acquire new techniques, something that is still overlooked in the Middle East.
Mobile advertising is the most effective medium for the e-commerce sector in the region, according to experts. And while investing in mobile ads is expected to increase eventually, retailers still suffer from UAE customers’ skepticism about online payments. Abdul Malik Jaber, Chairman of Middle East Payment Services, explains that the biggest challenge for online stores remain the popular cash-on-delivery option. Around 60 percent of all online purchases are paid on delivery, which poses a high risk for retailers – many customers would simply refuse to pay if they are not satisfied with their order. This, as well as the delay in the transactions, results in considerable loss of revenue for retailers.
According to latest statistics, Internet users in the Middle East are approximately 90 million, and some experts are predicting a rise to over 400 million by 2015. All these users are potential customers and considering most of them are regularly accessing the web through their mobile devices, they are also potential target for mobile advertisers and retailers with mobile presence. Moreover, Gary Lyons, Chief Innovation Officer at MasterCard, says that soon, every connected device will be a commerce device. This means that both advertisers and retailers should focus on providing better service and incentives to those shopping online.
E-commerce is estimated to be worth $15 billion in the MENA region. Sales ads, price cuts for paying online and via mobile digital wallets, and other types of incentives will attract customers and boost largely the growth of the sector.
