The Obstacles Of E-Commerce In MENA Region
The Arab World is very slow in discovering e-commerce and its secrets. Although it has become an essential feature and a formal sponsor of most of its activities. According to Shopify, Arab countries are in the eleventh place in terms of e-markets, while Asia and North America lead the list. Arab countries are also absent from the list of The top 10 countries in the field of e-commerce.
With the top three leading, China, United States, and France, while Japan and South Africa are at the bottom of the list.
These statistics prove that Arab countries suffer many problems that prevent them from getting a leading position in e-commerce market. These problems must be solved as soon as possible.
In this article we are going to discuss the obstacles to the development of e-commerce in the Arab world, and what prevents its spread. First of all, we will have a brief overview of the concept of e-commerce itself, and what happens under this concept of activities.
The term “e-commerce” is a modern term. It is originated as a result of the development of modern technology and the emergence of the Internet world. There is no specific timing for the beginning of its appearance. Some are likely to have originated with the launching of e-stores such as Amazon.com and Pets.Com. Others go back to the 1970s, when the factories used e-data interchange technology with each other.
In both cases, the term is a revolution in the whole trade and in the human lifestyle and way of living as well.
There are many definitions of e-commerce, some define it:
“Doing business between business partners using sophisticated information technology to increase efficiency and effectiveness of performance”
Others define it as:
“A term that refers to the entire range of business services dealt with by groups (institutions, companies or individuals) that rely on e-data processing (text, audio and video)”
A general concept of e-commerce can be derived from these definitions. A business activity for the purpose of making deals and related sales and purchases through the use of modern technology such as the Internet to carry out the following activities:
- Deliver business deals remotely
- Buy products at any time and from anywhere
- Negotiate and interact directly with the client
- Sale and delivery of products
- View and promote products
- Establishing trade relations on a wide geographical scale
- Display detailed information on goods and services
- Offering technical support services to consumers as well as sales and after sales services
- Perform remote money transfers and secure financial transactions
- Conducting automated correspondence on purchases and sales
- Query prices and services
- Payment of invoices and establishment of e-stores
So, you can conclude that e-commerce is centered on its core resistance around 3 key elements:
- Strong and fast Internet presence
- There are customers who are able to use this technology and harness it to their demands
- There are companies or institutions offering these services to consumers
Now, we will highlight the most important obstacles that hinder the progress of e-commerce in the Arab world, as follows:
1.Laws And Legislation
Of the 23 countries, only a handful number already have a law regulating e-work. Some are still in the construction phase. Others have not planned yet. Commercial transactions made on websites are largely unregulated and are not governed by legislative laws, causing many crises and deception to shoppers and traders alike.
2.Lack Of Confidence In E-Transactions
Many Arab citizens are afraid to end financial transactions electronically. A large percentage believe it is unsafe. Another larger one do not know how to work. This distrust is lower among the younger generations of the latter with modern technological methods. But among older people distrust remains widespread.
3.Lack Of Traders Culture About Its Importance
Many traditional traders are unaware of the importance of setting up an e-platform and engaging their audience. Some people wrongly think that relying on retail stores on the ground would distract them from e-presence, which they see as an addition and unnecessary cost.
These traders do not know the official statistics that tell us that by 2040, 95% of conventional purchasing deals will have no effect and will become fully electronic. If these traders persist in their convictions, their trade will soon be lost.
4.Lack Of Arab Banks Presence On The Internet
This is where the banks have begun to pay close attention, but they have not been there enough. Although some Arab banks offer services that help traders and shoppers to practice e-commerce. These services are either too expensive to create a merchant account in some banks, or the procedures are very complex and require a lot of time and waiting. So we cannot say that the banks have fully served their services in favor of the development of e-purchasing deals.
5.Lack Of Qualified Persons
Some of traders in Arab world are eager to enter e-commerce market quickly. They start without sufficient knowledge of the field. And as they started quickly, they failed and stopped quickly.
This happened as a result of not understanding e-commerce well, and their risking entry without an in-depth study of their target audience or competitors, as well as the labor market itself. This has a significant impact on the image of e-commerce generally. When some see that there are a lot of people losing in this area, he will not want to enter it.
They do not know that the problem is not the trade itself, but the entry of people who are not qualified enough to deal with this market.
6.High Cost Of Duties And Tariffs
Due to the global nature of e-commerce, it is natural that Arab shoppers deal with many international business in e-commerce. This deal makes them subject to many transaction fees for exchanging the local currency to foreign currencies, or have to pay a heavy tariff for delivery.
Therefore, the emergence of some apps for payment solutions such as SADAD, has contributed to solve this problem. It gives customers very low fees – the cheapest globally for this type of apps – and gives customers the advantage of dealing with Qatari Ryals unlike other e-gates that forces customers to deal in dollars.
7.Lack Of Community Culture
Community culture prevents the progress of e-commerce in the Arab world. If we want to develop this trade, we must take the Qatari experience in the field of educating citizens (individuals and businessmen) through its awareness platform, the Qatari E-Commerce Portal. The platform has contributed significantly to spreading cultural and community awareness of the importance of e-business, and has helped both shoppers and merchants understand e-work mechanisms, rights and duties for each party.
All of the above are obstacles that stand in the way of e-commerce progress in the Arab world and its development. If we wish to occupy the top positions in the global e-commerce market, the first step begins to overcome these obstacles and work to solve them.
SADAD has already begun to address these obstacles. It has supported e-commerce in the Arab world by providing shoppers and businessmen with easy, secure, and free solutions for their deals. By applying SADAD Payment Solutions, you have helped both individuals and companies manage their bills, organize their financial transactions, create and manage their e-stores smoothly.