E-commerce in MENA

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E-commerce in MENA - Bain Report Summary

The e-commerce market in MENA is estimated to be $8.3 billion. By 2022 the market is expected to have grown to $28.5 billion. Advancements in payments, logistics and increased internet penetration is expected to drive growth. E-commerce pure players accounted for 90% of the e-commerce market in MENA in 2017.

United Arab Emirates

  • The United Arab Emirates' e-commerce expected growth rate is 31% by 2022.
  • From 2014 to 2017, the United Arab Emirates' e-commerce has grown 30%.
  • The United Arab Emirates' e-commerce penetration is 4.2%.
  • InstaShop, Trolley and El Grocer are grocery pure players in the UAE.

Saudi Arabia

Egypt

  • Egypt has an e-commerce expected growth rate of 33% by 2022.
  • From 2014 to 2017, Egypt's e-commerce has grown 27%.
  • Egypt's e-commerce penetration is 3%.
  • Jumia is a strong pure player in Egypt.
  • Knockmart and Dakakyn are grocery pure players in Egypt.

Rest of MENA

  • The rest of MENA has an expected e-commerce growth rate of 26% by 2022.
  • From 2014 to 2017, the rest of MENA's e-commerce has grown 13%.
  • The rest of MENA's e-commerce penetration is 1.9%.

E-commerce Pure Players

Omni-Channel Players


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E-Commerce Growth - Kuwait

Kuwait's e-commerce market is expected to grow at a CAGR of at least 6.6% over the next 3-4 years. By 2023, the market is projected to have a market volume of $1.274 billion.


Estimates of the Growth of E-Commerce in Kuwait (Next 3-5 Years)

  • In 2019, the e-commerce market in Kuwait is expected to be worth $986 million.
  • Over the next 3-4 years, the e-commerce market in Kuwait is anticipated to rise at a CAGR of about 6.6%, reaching a market volume of $1.274 billion by the year 2023.
  • The e-commerce market's largest segment, in 2019, is electronics and media, with a market volume of around $315 million.
  • The user penetration in the e-commerce market is 67.3% in 2019, and it is expected to reach 66.9% by 2023.


Useful Findings

Insights on E-commerce's Share of the Total Retail Market in Kuwait

  • The value of non-store retailing in Kuwait is expected to rise by 48% between 2018 and 2023.
  • The retail sector is set to expand due to "a proactive initiative taken by the government in streamlining the retail infrastructure and strengthening the investments and tourism landscape of the region."
  • According to the Oxford Business Group, in Kuwait, the value of the retail market amounted to KD 3.5 billion in 2018, or approximately 9.1% of its non-oil GDP.
  • Nearly half (45%) of the nation's population is between the ages of 20 to 39, who have a notable penchant for buying international brands and retail spending in retail malls.
  • As reported by Euromonitor International, the retail sales of Gulf countries, including the UAE, Oman, Kuwait, and Saudi Arabia, is set to increase due to demographics, population growth, and a solid expansion in per capita income and tourism.
  • According to Alpen Capital, e-commerce makes up 2% of retail sales in Kuwait, while merely 15% of all retailers maintain an online presence.
  • According to global real estate advisory firm CBRE, the retail sector in the nation is experiencing significant development activity due to the demand for shopping malls.
  • In 2017, there was notable growth in Kuwait’s retail sector because both current and newer players attempted to adapt to altering demands and tastes.
  • Rising competition from retailers in the e-commerce sector and innovative shopping centers began modifying the country's local market. Trends such as these have continued into 2019 as government infrastructure programs and reliable macroeconomic fundamentals encourage investment and advance growth.

Additional Insights

  • E-commerce sales in the nation was around $670 million in 2017, while the e-commerce penetration rate was 53%.
  • In Kuwait, mobile operators provide one of the Middle East's most advanced mobile networks. Mobile network covers up to 100% of the population and land area.
  • Electronics, travel tickets and accommodations, and clothing are among the most prevalent online shopping segments.
  • From 2019 to 2025, the "Kuwait express delivery and e-commerce logistics market" is projected to increase at an estimated CAGR of around 22%. [Source 2]
  • Factors indicating the near-term expansion of business-to-consumer (B2C) e-commerce include infrastructure improvements as well as extended Internet connectivity.
  • Key players operating in Kuwait's e-commerce market include Amazon, Groupon, Wysada, MarkaVIP, Etsy, Tradus, and Souq.

Research Strategy:

Our research began by looking at market research reports from sources such as A Market Research Report, Research and Markets, Market Radar, and Euromonitor. These are primary resources for information on the current and future growth of the e-commerce market, and at times, they also provide insights on the estimation of future markets. Most of the reports we came across discussed the broader industry segments that include all Gulf countries such as Kuwait, Oman, Saudi Arabia, and the UAE. However, no specific report on Kuwait’s e-commerce and retail market was available. Another report from Research and Markets also did not furnish any information on Kuwait’s e-commerce and retail market.

Next, we scoured through various media articles from Forbes, Businesswire, Bloomberg, Reuters, Arabian Business, Marmore Mena, and Trade Arabia. We also searched through retail market-specific blogs such as Markaz Asset Management and E-Marmore, along with statistical sources such as Nordea, and Statista. These are all potential sources discussing e-commerce and the retail market. However, this research path yielded information on growth in the e-commerce market, but there was no future projection in terms of growth for the retail market available for the next 3-5 years.

As there was no pre-compiled information available, we attempted to triangulate the data. The idea here was to try to find the percentage share of the retail market from the e-commerce market, and then estimate how the share of e-commerce in Kuwait's retail market will change over the next 3-5 years. However, there was a lack of information on the total retail market, and thus, we could not triangulate figures through this approach.

As an extension of the strategy above, we expanded our search to the Middle East region, which includes Kuwait, to see if any information was available on the area's retail market. We wanted to find Kuwait's share of the market, which in turn, could be used for further calculation. However, information specific to the Middle Eastern market was not available. We discovered that retail e-commerce sales in Middle Eastern countries is projected to increase significantly between 2017 and 2020. Nonetheless, information on the retail market was not available, nor could we calculate Kuwait's percentage share through this approach.

Finally, we broadened the scope of our research beyond our two-year standard. With this approach, we wanted to look for slightly outdated yet useful information on any past surveys or research done around the topic, which we could use as a proxy for future projections of the share of e-commerce in Kuwait's retail market. The idea was to use the past growth rate and calculate the future growth rates with those figures. However, no relevant past surveys or research reports on the topic were available.

Due to the lack of available information, we were unable to determine how e-commerce's share of the total retail market in Kuwait will change over the next 3-5 years.
Sources
Sources