With increasingly tech-savvy consumers, loyalty has become a two-way street, demanding a higher level of engagement between brands and customers across multiple interaction points.
With increasingly tech-savvy consumers, loyalty has become a two-way street, demanding a higher level of engagement between brands and customers across multiple interaction points.

E-commerce to keep clicking in UAE

Dubai - Online retail solutions create value for customers, leading to continued investment in sector


Sandhya D'Mello

Published: Thu 3 Dec 2020, 10:05 PM

Last updated: Thu 3 Dec 2020, 10:06 PM

E-commerce has certainly proved to be a winner in 2020, defying all the odds as the Covid-19 outbreak accelerated a surge in online sales and as masses across the globe demanded goods with a seamless online experience. This, in turn, has certainly increased the pressure on the retail industry to raise their business strategy both online and offline to remain afloat in challenging circumstances.

And its future is not only getting brighter but also competitive for existing players. The sector has received a boost as digital transformation also help evolved demanding consumer behaviour. The Covid-19 pandemic has disrupted the retail sector and transformed consumers as it is rapidly changing the $25 trillion global retail landscape, so much so that global e-commerce sales are set to consistently grow from $4.21 trillion in 2020 to $4.93 trillion next year, $5.7 trillion in 2022 and $6.54 trillion in 2023, according to Statista.

“E-commerce has been one of the fastest-growing sectors in the past and has only accelerated during the pandemic we have faced since the beginning of 2020. The sector will continue to grow in strength in 2021 and beyond, particularly in the UAE,” said Muhammad Chbib, CEO of Tradeling.

“There are a number of indicators supporting this hypothesis. First, the necessity, and second, the challenges that came with Covid-19, which hyper-accelerated the adoption rate. Many companies have been slow to embrace digital technologies, but now more than ever they are fast-tracking to digital solutions for their business to capitalise on new trends emerging and to meet increased customer demands on digital channels.”

In the GCC, mass Internet adoption has resulted from a combination of digital infrastructure and eager consumer adoption of technology-driven solutions, such as social media and smartphones. The wider Mena region has taken its own route to digital adoption, leap-frogging traditional channels of evolution, according to a research by Visa International.

Chbib added: “The UAE has early on invested in an infrastructure to enable a vibrant startup ecosystem... e-commerce solutions create value for customers, which is why we will continue to see investment in the sector.”

Today, Middle East nations are ahead of more mature e-commerce markets such as the United States and China in terms of internet penetration, which stood at 64.5 per cent, above the global average of 54.5 per cent. Delayed adoption, followed by high digital and social penetration, has meant that GCC consumers have jumped straight to mobile commerce, or m-commerce, and operate across digital platforms with ease. The total market size, including all categories, has been estimated to be worth $48.6 billion in 2022, up from $26.9 billion in 2018.

“E-commerce in the UAE and the region is one of the most-growing aspects of the e-payment business and varying in growth since 2015 from five per cent to 20 per cent depending on each country. With the pandemic of Covid-19, we started seeing a big shift from physical POS purchases to online due to many factors, and therefore the growth started sloping upwards to reach 20 per cent in the UAE in 2020 compared to 2019, and is expected to surpass 30 per cent in future years,” said Ramzi Saboury, chief commercial officer of areeba, an electronic payment technology company licensed by Visa and MasterCard.

“I don’t expect any return back to previous volumes of e-commerce when we are done with coronavirus. This is a change of mindset that we are seeing nowadays: We used to wait years for it to happen, it has been accelerated in 2020.”

A new study conducted by customer support automation platform Verloop.io indicates that bots have been satisfactorily answering 62 per cent of customer queries in the e-commerce industry.

“Consumers will no longer tolerate sub-par digital support experiences as they may have before the crisis. Retailers have to ensure their brand is ready to provide consistent, instant, and accurate support experiences across devices and channels. Automation is providing customer support teams with the ability to handle large numbers of queries in accelerated time,” Verloop.io founder and CEO Gaurav Singh said.

The research paper by Verloop.io also points out that the average handling time of queries has also come down across the e-commerce industry; however the most drastic change is observed in the fashion and beauty industry where the average handling time came down to 26 minutes after the pandemic, as compared to 131 minutes earlier. As a result of improved time and efforts spent on responding to customer queries, another benchmark referred to as the customer satisfaction score has gone up in the post-Covid world.

“Most e-commerce companies have been shifting to bots to complete orders and handle the myriad customer queries they receive. E-commerce companies are dealing with impatient customers who demand service response as soon as possible,” Singh added.

“Digitisation is closely tied with customer experiences in the modern retail ecosystem,” said Sajid Azmi, CEO of Dubai-based brand engagement and customer loyalty solutions provider Yegertek. “With increasingly tech-savvy consumers, loyalty has become a two-way street, demanding a higher level of engagement between brands and customers across multiple interaction points.”

— sandhya@khaleejtimes.com

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